Requisite Enterprise

Leave a comment Posted on Accountability, Boards, Building Communities, Requisite Enterprise, sustainability, Uncategorized

Feet of Cement in a New Corporate Age. PPC – a case of Green wash.

The rural, peaceful villages of Riebeek Kasteel and Riebeek West may soon see heavy duty trucks rumbling through our streets every eight minutes.  We may also experience waves of job hunters descending on the community in the forlorn hope of finding work as this mega new project kicks off.  Do we need a similar experience to the Saldanha Labour Bureau experience, which created a problem that did not exist before?  This unaccountable corporate mining company is  also extracting local limestone deposits, sending profits to distant shareholders without improving the community or the infrastructure within which it is embedded.

How is that?

Pretoria Portland Cement ( PPC) plans to build a new R3-billion integrated cement plant in the Western Cape in our valley.  This state-of-the-art plant will replace and increase existing capacity.  The new plant will enable PPC to supply the lowest carbon cement in the country, resulting in substantial improvements in energy efficiency, reduced coal consumption, and lower emissions per ton of cement produced. This PPC say, will contribute to meaningfully lowering production costs, thereby making PPC significantly more competitive and profitable.

That’s great.  For shareholders, no so much for stakeholders.  Despite requests,  there has been no stakeholder consultations with the local ratepayers association, the Riebeek Valley Ratepayers Association.  The Deputy Chairperson, Mr Basil Friedlander, was not even allowed access to their office but had to meet in the car park.

PPC have shown a complete lack of interest and disrespect in meeting with the group.

After pressure they organised a meeting on the start of the long weekend, with an RSVP email that did not work and with no public broadcast systems.  The minutes from that meeting are still outstanding. On inquiry, The Ratepayers Association were told that the person accountable was overseas. On their website PPC say;

We play an active social role in the upliftment of communities in which we operate to create and maximise shared value for all.

 Really ?

The feasibility studies for the plant have reached an advanced stage, with construction rumoured to start next month.    Most alarming is that PPC has not shown ratepayers an approved Environmental Impact Assessment (EIA). They had one under the under the previous scope for the plant.  This 2019 EIA was flawed, the transport report was done in in-house, which is a bit like marking your own homework!  It said the roads were sufficient for the traffic, but no comments were made on environmental impacts. Ultimately it was accepted.

This EIA needs to be reviewed and updated to reflect any changes in the project plans and scope.  The construction and operation of the cement plant may lead to environmental concerns, such as air and water pollution. The increased industrial activity could also disrupt the daily lives of residents and impact the infrastructure. PPC will need to address these concerns through a required updated Environmental Impact Assessment, plus ongoing stakeholder consultations, to ensure that the benefits outweigh the downsides. This has not been done.

PPC claim the new R3-billion cement plant is expected to create job opportunities, both during the construction phase and once the plant is operational, but this limited in scope and may at most be 100 -200 menial roles, with many of the skills coming from China. PPC says they are committed to using local suppliers and services which will help circulate money within the community.  THey say this will  boost the local economy, but is this so?  Where are the studies?

Time for the CEO of PPC in South Africa, Matias Cardarelli, and Chairman Linhe Zhu to move into the modern world of accountability, sustainability and stakeholder engagement and not rip out minerals without any thought of the future of the communities. ripping out minerals without thought to the consequences to local communities is not acceptable.

We understand this will go ahead, but let’s use best practices. Operating in good faith, through genuine collaboration is in everyone’s interest.

References

1:  The Saldanha Bay labour bureau experience is often cited as a cautionary tale in labor management and employment services. It highlights the challenges and pitfalls that can arise when systems are not effectively implemented or managed. The bureau faced criticism for inefficiencies in registering work-seekers, matching them with job opportunities, and ensuring compliance with labor regulations. Minister Engages Saldanha Bay Stakeholders in Labour Summit – Labour Guide South Africa

2.PPC to build a new R3-billion integrated cement plant in the Western Cape – Quarrying Africa January 17, 2025.  https://quarryingafrica.com/ppc-to-build-a-new-r3-billion-integrated-cement-plant-in-the-western-cape/

3: MEDIA RELEASE – ppc.co.za https://ppc.co.za/media/z2vp22mw/ppc-announces-new-r3bn-cement-plant.pdf

  1. PPC plans Western Cape mega plant. https://www.iol.co.za/business-report/companies/ppc-plans-western-cape-mega-plant-12190136

5: Local economic development (LED), challenges and solutions – https://www.sun.ac.za/english/faculty/economy/spl/SPL%20Library/BER%202021%20SAs%20Municipal%20Challenges_Final.pdf

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Time Span and Time Horizon? Logical Extensions – Elliott Jaques revisited.

Just to keep this simple,  the original concept of Levels (then called Strata) came from the work of Dr Elliott Jaques (EJ),  originally conceived  in the heyday of the factory and mass production.  This meta model has continued evolving over more then 70 years and now, it is more relevant than ever. Why?

Volatility, uncertainty, complexity and ambiguity is the answer, plus climate change.  Not only corporate and governments MUST be accountable for long term planning and decision making, but all enterprises.  That means all prosumers (consumers and producers. (1)  It is not a luxury.  The 2.5 degree temperature rise is now the best scenario. As Harari says(2), ‘yet with all this information circulating at breathtaking speed, humanity is closer than ever to annihilating itself.’  Despoliation is unchecked.

Work Themes or Levels of Work (LoW), deals with increasing world in decision making.  It uses Time and Unique Value Adding as a differentiator between levels;.  This natural hierarchy is not about rigidity, power, control or prestige, the normal associated bullsh*t. 

Hand in hand with the Themes/Levels of Work, EJ used Time Span to sharpen the mind in order to estimate the work complexity involved.  He defined this to be the time to completion of the most complex task in a role… or the time that elapses before the Managerial Leader at the level above can see the completion of the task.  Thus work with similar time spans to completion belong in the same work theme/level of work complexity.

Very few people are able to think in long time –  we find making long term decisions really challenging and secondly, the market rewards short termism, measured by growth. Assistance is useful. Time span is a tool to help one think longer term.  It is  still a relevant measure as it’s about the complexity of work being undertaken in specific tasks. Consider it takes a few years to build a bridge, or to transform an enterprise using a new platform, or build an aircraft; yet it takes only a few months to sell real estate or half an hour for a dentist to fill a tooth. Yet it does not address consequences or impact.

What must be addressed for all goal directed work systems, is the issue of consequence or accountability for decision making. 

Not only internally, but to the broader community with which the enterprise impacts – directly or indirectly. That is tough.  How?  Returning to structure,  Time Span is a serious tool for gauging work complexity, but it is no dashboard of consequence once the task is complete. Technology has definitely impacted the relevance of Time Span in the first three operational work themes, while those at executive levels argue that it is impossible to plan longer term.  The best one can do is to build  organisational resilience.  This is a leadership fail, equivalent to fence sitting. 

While challenging, the impact of technology or short term market demands does not release us from accountability for thinking long term of consequences. 

 Time Span needs to be made more relevant to the current discourse of accountability. In practice, Time Span works well for operational roles, but becomes less relevant at the work themes of Corporate Citizenship (Level VI) and Corporate Prescience (Level VII).  In  Organisation Design (3)  I argued then that Time Span is no longer a fitting measure for work at the executive levels of enterprises or for state functions. 

Time Span is not about trying to envision the future.

Envisioning the impacts is referred to as the Time Horizon(4).

 A more suitable measure for these work themes is that of impact, namely Time Horizon.  I defined this in 2013 as;

“the amount of elapsed time before the outcome(s)  of the most complex decision can be confirmed.”

This by definition implies applying the mind systemically to envision all possible outcomes of the decision.  Time horizon may also be defined as: that distance into the future to which a decision-maker looks when evaluating the consequences of a proposed action.(4) This extends the functionality of the Time Span concept.  It allows for risk assessment by multiple stakeholders.  We should not do is confuse the terms. (5)  Jaques used Time Horizon to describe the individual future thinking capability. I have co-opted the term to use in planning and future envisaging, as a necessary extension to Time Span, as the onus now shifts to people, going beyond task completion.

 

What I struggle with is accountability.  How do you hold a board and CEO accountable for outcomes in a ten, twenty or thirty of forty year or more Time Horizon?  As we know, boards, CEOs and executive teams of large companies are not built for the long haul. How can they be accountable when we know with a 100% certainty they will not be there to answer for their decisions in as short a time as five to seven years?(5)

It is widely acknowledged that complexity of board work has grown.  A recent survey by Mckinsey & Company (6) of board members reported board members felt strategic activities require more active and regular board involvement. Examples were in the fields of linking strategy to purpose, assessing managements understanding of the drivers of value creation. The article was silent on long term consequences.

Accountability should be to stakeholders on the quality of thinking that made up the Time Horizon analysis.  Problem is of course, rewards are thin for long term thinking or planning.  So that leaves us in an uncomfortable place. Damned if we do, and damned if we don’t.

A practical answer is we need to assume responsibility for longer term thinking in our own Life;  how we work, how we consume, how we influence, our activism, how we vote. Secondly, if you are leader think longer, work in longer time, its a duty of human care. Its not a luxury any longer.  Governance needs to evolve to a point where Time Horizons become part of the boards compliance duty and requires stakeholder approval and shared accountability for the future.

Time Horizons are part of board governance.

 

Reference.

1. Tofler, Alvin., (1999).,  Third Wave.  refers to producers/consumers.

2 Harari, YN (2024)  Nexus.  page xx.  Prologue.

3. Olivier, Andrew.  Organisational Design. What your University Forgot to Teach You.  (2013)

4. I could not find this specific quote as the site was updated 21/07/24.  https://en.wikipedia.org/wiki/Time_horizon

5.  Confusing Time Horizons and  Time Span is fairly common, see Elliot Jaques’ Concept of Time-Horizon | xraydelta 

5. Harvard Law School Forum on Corporate Governance.  Average C suite tenure is 4.9 years and CEO 5- 7.2 years   August 4, 2023.

6.  Huber, C., Lund, Fritjhof., Spielman, N.,  Better together; Three ways to boost board-CEO collaboration.  Sept 25, 2024. Survey.

 

 

Leave a comment Posted on Global Ecovillage Network (GEN), Requisite Enterprise, Systems Leadership, UN SDGs

Scaled Systems Leadership

Gaia Asleep. Gouache on Paper. 30×27. 2020. Andrew Olivier

Network and Ecosystem Leadership

Is it possible to organise complex ecosystems to achieve a shared purpose?  Indeed is it possible to organise something which by nature is emergent, uncertain and comprised up of autonomous and semi-autonomous parts? Often with powerful agents? Are there clear guidelines that might help?

The questions this chapter seeks to answer.

  • What are the general principles of large systems design? For example – does a shared sense of purpose exist or is latent and requires articulation? What are the  activities taking place in the system and are they broadly understood?  
  • What are the characteristics of large systems leadership?  Achieving progress among diverse,  often conflicting part of a large scale systems requires different skills from those running an enterprise.

This chapter focuses on answering these questions using two specific examples; the global response to COVID 19, the other, an emergent, thriving global ecosystem of volunteers, committed to sustainable living.

Networks operate at different scales of complexity serving all manner of purpose.   For example, businesses operate a range of commercial networks serving diverse needs.  Behind networks sit organisational structures. Evolutionary trends now see  Agile, Platform and the multi dimensional enterprises emulating the principles of Systems Leadership.

Other networks exist for special interests, we know about terrorist networks and hear of the dark net.  Social media connect relationship networks, promote and organise specific causes (e.g #MeTo, Extinction Rebellion, BLM, Arab Spring, Occupy Wall Street).  The internet has enabled the mushrooming of this online phenomena, while COVID 19 has enforced dependency. 

As networks scale in size, stakeholders, functionality and diverse purpose, ecosystems emerge around shared interests.  Accompanying scale, comes complexity, uncertainty, disruption, ambiguity, surprise and hyper-connectivity.  

Complexity. pencil on paper. A Olivier. 2020

Before addressing the two case studies of a pandemic and a voluntary global movement, the following observations are pertinent to the analysis;  

  • Shared purpose – the need to identify key players / stakeholders, activities, and nodes of development within the associated networks or larger ecosystem. Engaging stakeholders in creating common ground, shared purposes and domains of authority and accountability is necessary. This is a first step, accomplished through a helicopter view of mapping and collective learning. 
  • Leadership of scaled, social networks and ecosystems is different to leading an accountable goal directed business. Large scale systems leadership requires a different set of meta competencies to galvanize and orchestrate diverse stakeholders. 
  • Different tools for building collaborative leadership are required to build trust, advocacy and communication flows.  Top down command and control is not optimal because of systems complexities.   Tools which connect, engage and empower are critical. Understanding there is no master neuron, no one is in control or has complete authority is a fundamental mindset. Therefore leadership maturity and wisdom is fundamental.
  • Leveraging complimentary capacities to advance progress is essential and that is done by having clarity of vision and understanding it’s all up to us.
  • What’s going on in the System – Understanding the activities and developments within the ecosystem’s different networks is important.  By understanding stakeholder’s involvement and contributions, one can create empowering and autonomous conditions.  It is important for leadership to know what is going on rather than giving instructions. This is the requisite leadership at scale.
  • Leadership can cluster ‘what is going on or needs to be going on’ into one or more existing or emergent domains of work. This  allows the ‘chunking’ of activities into semi-autonomous parts. Through understanding the semi-autonomous nature of the parts, empowerment of local decision making, relevant information flows and distributed accountability and authority takes place.
  • Complex adaptive systems operate at different speeds and scales of complexity and thus have different design requirements. Activities (work) within the parts of the whole ecosystem can be grouped into Domains, regardless of purpose.
  • Understanding the nature of existing or emergent Domains of activities within large complex systems (think COVID 19, UNSDGS, global emergencies) allows for recognizing relevant accountabilities and authorities, information requirements and flow, empowerment and decision-making rights at all the different network levels, from local to strategic.

We call this Scaled Systems Leadership. This chapter seeks to explore network activation, activity chunking and systems leadership competencies.

Let us now turn to COVID19 and The Global Ecovillage Network…

Notes to this Extract

1. An ecosystem refers to multiple networks within an umbrella of shared interests.  Networks are regarded  as bilateral cooperation while ecosystems are multilateral – ie will work with anyone in the ecosystem. 

2. Andrew will be presenting a series of Masterclass sessions with the Singapore Institute of Management in 2021 and Requisite (as required by the nature of things) Leadership of Scaled Systems will be on the topics.

3. My thanks to Reos Partners for the invitation to their workshop in Geneva at the UN Innovation Lab in 2018, to David Nabarro and Peter Atkinson, for their input at the 4SD lab in France in 2018. Thanks to the GEN ecosystem (fellow trustees and network members), for gently showing me the real complexities/ challenges of consensus leadership. Also thanks to Gillian Stamp for taking EJ’s work from hard physics of design into the nuanced and messy world, now just being discovered in OD. All this has really formative in thinking about fractals of work activity at scale.

Leave a comment Posted on Careers, Requisite Enterprise, Uncategorized

Observations for High Potentials from Career Path Feedback

Read the article below first, then watch this abbreviated Career Path Appreciation feedback given to a high potential. You may want to watch as a refresher (if you have done a MCPA or CPA with me over the years) or are interested in how a practical example of the generic insights shared in this article.

During my career I have been privileged to listen to over one thousand people talk to me in depth about their Working Journey. I have heard how their journeys have unfolded; the wonderful times of flow and those times of stress and hardship. And of course, their hopes for the future.

My interviews have been over a diverse range of individuals, from the illiterate to those in high profile public leadership roles (even a Nobel Prize Winner). Here are some of my observations;

People GROW their Working Journey to fit their LEVEL of comfort.

By and large most people strive to actualise their potential as best they can. That is, until they reach a place where they become ‘comfortable’; a position that is then defended. Being ‘comfortable’ represents the known; where uncertainty becomes ‘manageable’; the known knowns and the known unknowns. ‘Comfortable’ is a complex idea, maybe its when we find balance and harmony in our different Journeys(1), or as Gillian Stamp says, ‘we become whole’. I also suspect it is when someone reaches their point of mature value adding (no further cognitive transitions) or they are adding value in a particular work theme over a long period of time. Balance, mastery and growth of knowledge, skills and experience become important, as is defending that ‘wholeness’ or sense of ‘comfort’

This ‘comfort’, or acceptance of a status quo is part of what I think defines a mid-life crises, although what constitutes mid-life in chronological age can vary considerably, but for most, its between 35 and 55 years of age. Trade-offs across the different Journeys is of course a pre-requisite for ‘comfort’.

For high potentials(2) the situation is usually very different, because they are driven by a deep need to add value (however defined) in increasingly complex ecosystems. This accelerates as they mature. Their level of comfort (and flow) is in almost continual flux for the bulk of their Working Journey. Stability quickly becomes stifling. Many follow unconventional and uncertain career paths, with rapid promotions, successes and sometimes crushing failures in the process.

Almost always, individuals with high capability (potential) find the feedback from this process really meaningful, because it provides a navigational aid to Life.

Why? It gives us predictive dates with destiny, it gives us symptoms of change to be on the alert for, it offers solutions or pathways to consider in our planing, it provides hope for the future and importantly, a light into the darkness of the future.

The process provides a rare insight into the Order that exists beneath everyone’s Journeys and specifically our unique Journey of the Self (1), (i.e. how our capability will unfold) that in turn, dictates the broad pathway of our Working Journey and the challenges we will need to actualise, to find flow. For high potentials, this is gold.

Don’t underestimate the power of your subconscious desires, they can often manifest, in real time, so spend the time being clear on what you actually want. Its a great investment.

The emergence of next steps during a transition period for many have direct connections to their background, experiences and what they value, passionately. Ideas and thoughts acts as attractors for desired opportunities. What was wished for strongly enough, often manifested. People reported clarity, consistency of thoughts and actions did manifested their hopes.

Conversely, if you have no vision, no passion, then what we manifest is a jumble, a confusion and increased uncertainty. The greater the clarity and hunger to achieve it, the clearer and more certain the outcomes.

We are in charge of our own Journeys. Mentors, a good HR function and an effective board can add immense value, but the truth of the matter is; your Working Journey is in your hands. High potentials realise this early on and embrace the fact.

A very useful tool is a journal. Those who adopt the use of making personal notes regularly say it allows for reflection, reminders and in hindsight, come to realise that putting thoughts into words, clarifies thinking. Some talked about defining moments, when they decided to take on risk to follow their passion(3).

Remember risk is the first step, without risk, nothing happens.

risk the ride…

Another observation is options are thin at the top end…life is challenging, especially for truly high potential individuals.

A significant percentage of those with capability to work in the Values Domain(4) tend to end up with work portfolios. For corporate individuals this may translate as finishing stints as CEOs (5) or as executive teams members. The next step is joining boards, as well as lending their support to one or more causes, campaigns and sometimes deferred pursuits (e.g academia, hobbies).

For others who have chosen different paths, the road for the majority seems more rocky and underutilisation becomes a real issue. Like those from the corporate world they manage a patchy portfolio of activities, but finding flow may be more of a struggle then those with a more conventional career ladder.

The evidence is actualisation depends on one’s desire to embrace Life. You MUST live your best life. Below is a summary I put together some years ago based on these interviews.(6)

In closing remember the words of Abraham Lincoln, “It is not the years of your life, but the life in your years” that counts. Remember and harken those words from Dylan Thomas poem“Do Not Go Gentle into That Good Night’

————————————————————

Notes:

(1)Gillian Stamp. The Four Journeys.

(2) Definition of High Potential; ‘People with capability to grow cognitively and be in flow with the complexity of the work theme of Strategic Intent and beyond.’

(3) See Adizes, I. (1996) In Search of Prime, especially the sections on infants and go-go for understanding this Risk of setting up your own venture.

(4) Values Domain – Work themes of Corporate Citizenship and Corporate Prescience – work levels VI and VII.

(5) By CEO I refer to entrepreneurs, corporate leaders of profit and for purpose. They may be state based, national, multinationals or international.

(6) Sadly , I think this wonderful tool is in danger of vanishing.Why? Models not understood and complex, HR professionals unaware, not quick fix or bling, victim of high priests and poor management over decades; rigorous, expensive and time-consuming training.

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Commonwealth Bank of Australia and the APRA report – a Requisite Failing

APRA, Australia’s prudential regulator, recently released a scathing report on the Commonwealth Bank of Australia.  Coming in the midst of a Royal Commission into the Financial Sector, that has seen many in the financial services industry stumble, after the spotlight has been shone into their internal workings. The Australian Financial Review commenting on this report, said:

“The senior management were highly intelligent and collaborative (1) while the institution itself delivered financial success. By most measures, from return on equity to customer satisfaction it outscored its peers. Yet somehow this complex, but high-performing institution, has found itself the subject of one of the most scathing assessments of a corporation ever compiled.”

I want to dwell on the CBA and this report, as there are some important lessons to be learnt from an organisational design, operating model and leadership perspective. In the mid nineties CBA introduced Requisite Organisation – a meta model for structuring, organising and leading goal directed enterprises.  Requisite (as required by the nature of things) is the name given by Dr Elliott Jaques to a powerful set of models, constructs and practices for creating sustainable, transparent, goal directed (and felt fair) organisations.  This body of work has been supported by sound research and the work of many eminent scholars and public and private leaders.

Requisite has evolved over more then a half century, developing through theoretical changes and best practices usage globally.   That said, application is a different matter, and one needs to consider the culture into which it is being applied. If the principles become perceived as inflexible rules, and the practices and principles the domain of select specialists (when it is aimed at empowering managerial leaders),  the basics of felt fair and transparent leadership quickly become subverted into power politics and personal goals.  This has led to a poor image and damaged reputation, noticeable by publicized failures.  CBA was one of them(2).

In the mid 1990’s CBA introduced Requisite and this was used for a number of years, before being discarded.  I recall being on a plane to New Zealand with a senior executive from CBA who spoke about the autocratic, hierarchical style of management Requisite had created in the bank, while another person, could not bring themselves to mention the name because of the pain it has caused.  In contrast another employee at the time complained how the good work they had been doing had been curtailed, because it was seen as dismantling power fiefdoms.  Whatever the reasons, Requisite was dropped and its legacy was sadly tarnished.

Back to the APRA report and its findings; key issues identified at the CBA were the very issues that Requisite is designed to address. Requisite (or what we in WJ refer to as Requisite Enterprise) is about designing effective structure.  Firstly it needs the working spine – a vertical hierarchy of unique value adding work themes (or levels).  Consider this from APRA –

“Within CBA, the vertical lines of accountability that travel down business lines are generally well understood.”

Understanding a vertical reporting structure is very different from one that adds value in a unique way. Most vertical structure do not do this and this is validated by APRA’s comments re;

” a federated organisational structure that required but did not have clear roles and responsibilities for issues that spanned business units and a lack of collective and end- to-end accountability (Senior Leadership Oversight chapter)”

In Requisite, intent informs strategy which leads to structure. The complexity of the intent determines the number of work themes.  A quick glance at the graphic on proportion of staff in seniority in the AFR report, shows immediately one level too many.  This increases risk, blurs accountability, creates confusion, builds bureaucracy and results in a non value adding hierarchy.
Once structure and function is clear, role clarity becomes paramount; its what makes work fun, challenging, allows for ‘flow’ and delivers the intent. Coupled with role clarity is the commensurate authority to deliver on accountability and to make decisions.  This is where Requisite excels, it has the tools to do it well, individually or collaboratively. Consider the following from the APRA report:
“In the panel’s view, the focus on empowerment of individuals was not balanced with a corresponding focus on collective accountability”

If the vertical spine represents the skeleton, then the muscles, tendons and organs represent the functions, projects, teams and the systems of work.  They provide the ability to operate cross functionality, allowing coordinated goal directed actions, thus enabling value chains to work effectively.  Understanding how to make cross functionality work is well understood in the Requisite tool-set. Nowadays all organisation’s work cross functionally in flat agile structures, which require more then ever, for clear decision making authority and accountability to be spelt out. This is clearly a major fault at CBA as the APRA report makes clear;

“The Panel’s assessment, however, is that collective accountability across business lines has been poor. As a result, accountability in CBA has been, at best, opaque….The desire to move away from a past combative culture has led to some over-compensation in pursuit of collaboration. The result has been pockets of excessive consultation or consensus- driven activity, leading to slower decision making, lengthier processes and slippage of focus on outcomes. Referred to multiple times particularly by risk function staff, this type of behaviour has been at the expense of constructive challenge and cross-examination across the three lines of defence.”

Doing cross functional work correctly means risk management is build into the process.

Pendulums don’t stop midpoint.  Collaboration is necessary, as is the funding of purpose (via profit in private institutions) and these social memes of culture need to be understood and balanced.  Financial institutions appear by and large according to the Royal Commission of having done an appalling job in this regard.  CBA jumped from the blue and orange memes of culture(3) to those of internal green, (no one want to make a decision, everyone has to be consulted, collaboration on everything, trust in good intentions) while other parts of the business were low orange (unscrupulous profit drive). Healthy blue memes are needed for risk management (clarity around process, decision making rights, structure, accountability etc), while the yellow meme allows for discernment, balance and selecting what works with integrity.

” a cultural ‘mentality of trust’ and ‘over- consulting’, manifested in a lack of constructive challenge throughout the senior management levels and at the Board, and in bureaucracy diluting accountability” (highlighted in the Culture and Leadership chapter – a perfect example of the green meme);

Finally I see that leadership represents both the neural network and the brain, activating structure and function. It creates the culture and drives goal directed work.  Requisite offers an effective language to give meaning, leadership tools and practices that ensure a structure is fit for purpose and inhabited by people in flow. In other words, a healthy organisation.

In conclusion, I would like to leave you with the question, what might have been the outcome of this review if CBA had remained requisite? Perhaps by now it would be evolved into Requisite 3.0?  Evidence shows that once embedded, this operating model has supported companies for four or more decades, with regular refreshers and updates.  Like any sustainable operating system.(4)

Notes

(1) Requisite has three integrated strands; structure, leadership and people. Being highly intelligent and collaborative  is no recipe for success, but certainly an essential building block. What is also needed is understanding how to be an effective leader, being competent in the tools of the trade and  clear on what works needs to be done.

(2) Recently, when an executive team in an ASX top 100 was considering introducing Requisite for its 15,000 strong workforce, some of the team members cited the CBA failure as a reason not to do so.  Luckily this view did not prevail and this organisation, three years later, has hit many records, including employee engagement, market perception and share price performance.

(3) Memes are packets of culture, like genes. Memes represent dominant societal values and these are reflected in organisational cultures.  First articulated by Dr Clare Graves and called Spiral Dynamics by Dr Don Beck, they have recently been made popular by Frederick Laloux in this book ‘Teal Organisations’

(4) The fact that the CBA had a Group CEO leadership change during implementation may also have been problematic. Research has shown that for Requisite to deliver long term benefits, it needs to survive the first CEO transition successfully. This happens through culture, systems of work and daily practices.

 

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The mind once enlightened, cannot again become dark

During our lifetime we may be fortunate enough to receive lenses that provide deep understandings of how things work. Those insights provide models of continuous learning that inform, nourish and sustain us. As a Noble Peace Prize winner said, “It felt like god had revealed a small part of how the universe worked’ adding he was not a religious man.

The point is what has been seen cannot be unseen.  Such meta understandings help us on our pathway towards enlightenment.  Of course, humility and openness are key ingredients to ensure ongoing learning, otherwise we run the risk of becoming dogmatic zealots.

The meta model of understanding human capability, work and the evolution of human value systems were such lenses. What a fantastic journey that has proven to be –  it led me to interview and analyse the most interesting people, and allowed me to assist many and diverse enterprises.  These lenses have stood me instead over multiple decades.

I also know that those lenses have been shared when I hear others encouraging their teams saying these lenses will alter their worldview and help their careers.  Mark Milliner, Ian Stone and Jacki Johnson were the most recent. Thank you for the affirmation in understanding.  Now as Billy Boyd says, I must bid you farewell and in closing I would like to offer you the following insights;

  • Work is a treadmill, but with different and exciting carrots on offer. Fast, fun and challenging.  Our work journey is driven by our deep need to actualize.

    Our need to be of value is enduring.

  • Work can be very satisfying, but while our capability is the driver, our current mode of transport is an old outdated dinosaur called capitalism. There are no free rides, and no one is exempt from travel. It is not a felt fair system and is a value detractor. As Muhammad Yunus says, future business will need a social license to operate.
  • A consultant is a role with accountability and no authority.
  • Work that detracts from planetary, regional and local sustainability cannot be tolerated or supported.  Irreversible damage is caused by companies and governments that have lost their ability to regulate for the common good of all -we need right work.
  • Consulting has allowed me to travel and work in many different and exotic places.
  • As a road warrior I have been equipped with the latest tools of the trade as they evolved… but the problem is my e-wastage mound grows. Full value chain accountability is needed.
  • Consulting has given me time to lead a personally rich lifestyle and get to know my kids – a real blessing… there was a financial sacrifice, but it was worth it.

    “My partner (also a consultant) and I agreed that one parent would always be fully present for the kids (we now have three beautiful adults).  We took it in turns.”

  • It has allowed me to write and publish two books, the third an adventure which sits on the cusp of the new journey and provides a segue to the new future.
  • The right mentors come when the pupil is ready for them.  Gillian Stamp, Don Beck, Malcolm Hollick, Robin Mills – thank you for believing in me.
  • It has led me to renounce the “short-termism” of the free market system, especially greed.

     The word ENOUGH does not exist in business vocabulary.  There can never be ENOUGH!

  • I have lost faith in accountability. I see too many overwhelmed, overpaid and incompetent leaders escaping censure.
  • I am grateful to all my clients who believe in us and were willing to experiment with us.
  • Relationships are frail and need constant tending, trusting and sometimes clear tasking.
  • Look after your networks, friends and family.  Also members of the same family are often not born under the same roof.
  • Thank you to my current team, I am privileged to work with Adam Thompson, Tim Levett, Verena MacLean, Bruce Whitby, Samantha MacDonald, Tanya Brockmeier, Amanda Johnson , Brent Sheridan and Sam Wilkinson.
  • In retrospect, although it did not feel like it at the time, I have learnt more when I have failed or been in conflict.
  • My corporate consulting journey has driven my need to understand other ways we could better organise, for fairer and more just outcomes for all, not just a select few.

 The transition beckons.

I have seen a different world, running on a different operating system and that is now my Call to Adventure. What is seen, cannot be unseen.

Aluta Continua!!

 

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So you want to be an Agile Organisation? Some things to keep in mind…

So you want to be Agile.  The common criteria I have found to define an ‘Agile’ organisation are: –

  1. Fast moving, flexible, quick and responsive to changes, challenges, events and opportunities from anywhere, anytime.
  2. Built on policies and processes that facilitate speed and change, it aims to achieve continuous competitive advantage in serving its customers.
  3. Agile enterprises use diffused authority and flat, non hierarchical organizational structure with no single point of control.
  4. Short loop information flows among different departments, and develop close, trust-based relationships with their customers and suppliers.
  5. The connected and aware entrepreneurial organisation, with leaders as catalysts.

So, what to do to achieve these five points?  Firstly, all five points are connected; none stand alone. Lets unpack these five points;

1. Fast moving, flexible, quick and responsive to changes, challenges, events and opportunities from anywhere, anytime – In my last blog I mentioned how social genetics or memes evolve with society  and organisational design reflect both dominant and emergent memes.  Pathfinders/early adopters are expressions of the exciting and emergent value systems. That is why their value propositions are so powerful and there is a mad rush to emulate the few that are successful. Your ability to become Agile depends on your dominant meme system (culture).

Point 1 is about quick and effective exercise of judgment – i.e. decision making. And it is not short term ONLY; it needs to be long term as well (future focused work is a function of organisation complexity).  A recent article in the HBR illustrates how important long term thinking is and how it has worked well for companies taking the long view.

An ‘agile’ organisation must be both short and long term to be sustainable and as well as resilient. The necessary minimal conditions for this are;

  • an effective structure reflecting the company’s complexity and one that can delivers its intent;
  • authorised and flexible role relationships that allow decisions making to be done quickly and effectively,  at the right time and place;
  • A flexible structure with home-based roles accountable for ensuring different unique value adds – (ie accountable for long and short term).
  • Leaders with the cognitive capability and skilled knowledge to handle the complexity of differing types of decision making in all teams, functional areas.

2. Built on policies and processes that facilitate speed and change, it aims to achieve continuous competitive advantage in serving its customers. Organisation intent is delivered through systems of work which are both customer centric and whole of systems thinking.  This is where the speed and innovation of digital revolution has driven the need for agility.

Systems of Work (policies and processes) in the Value Added Domain of work (known customers, known products, known services, known markets) need to be so much faster, seamless and integrated – to delight and anticipate the customer.  Leading through the rear-view mirror in short time spans is to ensure captivity, opportunities and changing circumstances.  Many companies are locked into battle with adding new value through customer rear-view data analytics, aimed at short term gains (1-3 years).

However true agility requires a future focused customer windscreen as well.  Elon Musk commented that the customer (and governments) have no idea what the future is bringing and looking to the past is no guide in our fast moving, disruptive world.

Thus Strategic Intent at the longer, more complex work themes level requires different speed systems of work; mutiple ecosystems awareness; as well as the slower, deeper building of organisational DNA.  Thus a two speed system of policies and processes, where the shorter time spans are for decision making to adapt, change, innovate; while the longer time spans, stablise, integrate, learn and invest.

3. Agile enterprises use diffused authority and flat, non hierarchical organizational structure with no single point of control.

This is where I differ from the definition. I know of no long term successful company (survived and thrived for 15 years+) where there are no points of control.  Diffused authority in principle allows for effective, rapid and relevant decision making.  No accountability is a recipe for an organisational stuff up and failure.  Sorry, unpalatable I know, but there is it.  The naked truth.

If you do this, history will eat you and history has a magnificently illustrated cookery book.

Nature uses hierarchy for creating unique value add; no part is better then another, each part is accountable for different stuff.  We talk about hierarchy not as power based or centralised command and control of the red, blue or orange memes, but as yellow (or teal); themes of work, each with unique value adding based on increasing uncertainty and ambiguity, hence complexity.

Here we integrate structure with rear view mirror and the future focused windscreen. The ANZ CEO did not even know how many levels there were in his company, but ANZ ‘levels’ seem to be traditional hierarchy,  not complexity base work themes.

4. Short loop information flows among different departments, and develop close, trust-based relationships with their customers and suppliers.

Yes, yes, yes!!!!  Unfortunately so often a wish list. Organisations have a Bank of Trust in which deposits and withdrawals are made.  Sadly many operate in overdraft. Trust comes from building strong trusting two way relationships over time.  It happens when point 1 to 3 are in place and emerges from saying what you plan on doing and doing what you say, and by leading in a consistent, collaborative way.  Trust has a corollary, it needs to be felt fair.

An agile organisation is not the sum of a specific technique or team based approach; it is the entire way we design, operate and lead the enterprise. It is a culture of how we do things here.

5. The connected and aware entrepreneurial organisation – Organisations go through cycles of growth, equilibrium and growth, as their complexity increases. Failure or death exist at any-point, especially at points of transition and emergence. Different memes may become dominant drivers.

Agile is also a term that can apply to an organisation’s ability to move rapidly into and remain in Prime;  I refer readers to Izchak Adizes pioneering work in regard to corporate life cycles

Many references are made to hiring ‘smart people’ but smart is left vague, up to general interpretation. Each phase requires different leadership skills;  so I have avoided ‘the list’ and rather say characteristics are adaptability, skilled managerial leadership and ability to work at the theme of complexity they are leading.

Therefore a key operating principle is one of individual cognitive capability being matched to work challenge – and consistent studies show people grow or shrink work according to their ability to exercise judgement (when they do not know and cannot know what to do).  Success comes from stocking high potential individuals into the organisation envelopes of change, with a clear mandate to lead major initiatives, turn things around or head up successful startups. Fact.

So in conclusion – An Agile Organisation is many integrated things, with no silver bullets.  It is the Yellow Meme, doing what works and doing what is requisite…

References

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Org Design Evolution – (Hierarchy, Teal, Agile, Sociocracy, Matrix and Requisite) shaped by Memes (culture)

As my company works in the field of organisation design and navigate through the milieu of Agile, Lean, Matrix, Sociocracy and Requisite, I thought a blog on the evolution of structure might be a good idea for providing a balanced view on this topic.

Before starting an evolutionary journey I just want to say organising to get stuff done is a very old human past time.  Structures have evolved over time and mirror our culture.  Culture itself is shaped by human memes, the social equivalent of genes.  The first person to understand this was Dr Clare Graves and his ideas were picked up Dr Don Beck who clearly enunciated in the work Spiral Dynamics. Ken Wilbur later also climbed onto this band wagon.

Culture evolves over time and memes are packages of cultural information (containing templates of fashion, social etiquette, art, design, laws, work, customs, beliefs etc) – our social DNA. We as individuals all carry our social meme package. We can shift between our meme package, but normally have a dominant operating set of values. Not unexpectedly, this has a major impact in business.

The ideas of memes shaping organisational design have reemerged thanks to  Laloux’s book and the so called ‘Teal’ Organisations. While sadly a gross over simplification of the actual evolution of design, it is a step towards understanding how memes shape structure. So here is our journey (thanks Don)

Millions of year to present…

1 – Band – beige. Maslow’s base of his pyramid – survival – food, water, shelter – Maslow and Graves were contemporaries who argued bitterly about what actualisation meant.  – Organisation here was protection and duties assigned by stronger members to ensure food, safety, warmth, procreation. Hunter-gathering – band moved with seasons and food availability.Technology evolved slowly and bands were primary form of structure to get work done and survive.

Transition to next value system took place over millions of years, as we evolved culturally and technologically, but arrived with domestication of plants and animals and first permanent settlements.

2 – Tribe – Purple.  oldest of values systems – organising for safety. Circular around clan, tribe.  Decision making guided by elders, shaman or chief.  Seen as distinct group or tribe – best to deal with threats and focus on survival of tribe / group. Roles determined by age, gender, kinship and power.  Ritual important for coherence and protection. This meme is still very active and has evolved into sport. nationalism etc .

3. Empire – Red.  power gods – leader is all powerful, organised on favour, fear, domination.  emergence of strong egos, self more powerful then group, confront dangers and conquers, struggles over niches, exploitative systems.  Big boss rules through other bosses; communication downwards only, relationships governed by ‘how can I gain?” Modern glimpse – mafia, motorcycles gangs, warlords, despots/dictators.

18th Century to present…. Transition to next value system took place with arrival of industrialsation;   People needed in cities and development rapid as we evolved culturally and technologically. Huge conflict as memes battle for dominance – eg US Civil War, Russian Revolution, Anglo – Boer War, China.  Agricultural Waves vs Industrial Ages.

4.  Authority Structure – Blue, order and progress.  First memes of the Industrial Age. Arrival of the hierarchy – ability to organise on huge scale and assemble resources for mass  production.  Hierarchy brings scalability  – communication downwards and across, people in role – occupy rightful place, wait turn and obey orders.  Person with appropriate positional power makes decisions.  Efficiency and production, but rigid rules for structures, roles and rank.

Figure I: The older but still very active memes and their structures for getting stuff done

 

4. Strategic Enterprise – Orange – Materialistic/Achiever – Strive Drive.  Bureaucratic and status / power  orientated; delegated authorities, communication up, down and across, but evolves… drives results and outcomes, highly competitive. Seeks best solutions, but resource intensive and wasteful. Hierarchy evolves into adaptable and flexible structures.  Status orientated – allows for quick upward mobility and creativity. Durable and powerful Org design structure, gains global popularity for getting stuff done.

1960’s to Present…

5. Social Networks – Green – Sociocentric –  Human Bond – this meme burst onto the stage with the failure/successes  and excesses of consumerism and materialism (Orange meme).  Excesses of hierarchy gives rise to experimentation with this new egalitarian meme which values community, sharing, inner harmony, the team, well-being, balance and collaboration.  New  org models, concerned with equals working for mutual benefit; deny concerns with status and benefits; matrix, sociocracy, holocracy, self managed teams;  ‘the people’.   Leadership and hierarchy not in favour;  group consensus, flat structure and the team are in.

1980’s to Present…

  (TEAL of Laloux’s organisation sits between Green and Yellow.)

6.  Systemic Flow – Yellow – integrative – Flex Flow – this new meme arises due to Green’s inability to resolve and deal with complexity.  Org seen through systems lenses.  Structure as needed; according to task at hand;  Project based; changing functional leadership with decision making.  Connected, fluid, adaptable, intensely pragmatic, technological savvy, does what works – including partnerships, alliances;  walk away from what does not.  Agile and Requisite evolve, now based on natural organic hierarchy of complexity. Shared values sought with ecosystems.

7.  Holistic Organism – searches for holistic solutions (ecosystem) and guiding principles, the order underneath apparent chaos. blends consensus, competency in global perspective, focus information for insights and greater good.  Able to move quickly, each entity is microcosm of larger system.  Shared values require no harm, zero waste, circular, share.  Social businesses with global thinking and collective actions. Structure as required by the nature of things…

Figure 2 : Active and Emergent Memes and their structures for getting stuff done…

 

Lessons

  1. All org designs have aspects that work; some are robust, principles understood and do work; spot the evolutionary growth of each and don’t discard the good stuff.
  2. Ascertain your culture by looking at what memes are dominant (easy, check the CEO and executive; that’s the windsock to your structure).
  3. Digital transformation depends on yellow, orange and green memes, but mostly yellow.
  4. Oh and of course; people choose products and services according to their dominant memes, but how many marketers know this instinctively? Sort your products and marketing to meme segments
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HBR – providing proof that managing for the long term pays off, but displays Requisite ignorance

A recent Harvard Business Review (HBR) indicates researchers have finally proven a critical Requisite concept – that complexity, work and time are linked. Good piece of work. The article claims:

* Companies deliver superior results when executives manage for long term wealth creation and resist focusing on market quarterly earnings (eg Unilever, AT&T, Amazon)
The article talks about a long term mindset – in Requisite terms the companies they describe are all operating in Work Themes of Corporate Citizenship (Work Level VI) that requires a mindset of up to 10 – 15 years. The leadership themes for these types of companies is wealth creation and tolerance (we need value creating outcomes.
*Executive feel balance between short term accountability and long term success are out of whack– The world needs long term thinking because long term thinking is by definition connected up thinking and this drives out short term gains to please the market. Requisite is clear – the more comlex the work, the longer the time required to judge the outcomes.
*Resilience – during the 2008-2009 GFC, these companies not only saw smaller declines in revenue, but also continued to increase investment in R&D- on average 8.5% – compared to 3.7% for others. Economic profit increased by 64% in comparison to peers over 15 years. Long term companies added 12,000 jobs on average from 2001 – 2015.
*Unable to measure the cost of short-termism – the article believes an additional 1$1 trillion has been lost in the US economy – but this is a bargain at the prize. Think of the true picture of short term gains and long term losses – think biodiversity, limits of growth, poverty and climate change!

Thinking long term is not ONLY good for business, its good for the entire PLANET.

This graphic, from my 2003 book, shows how Work, Civilisation and and Nature interact -the linking factors are time and decision making and how few companies work in the long time.