Requisite Organisation

1 Comment Posted on Prime legacy blogs, Requisite Enterprise, Uncategorized

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.

 

Leave a comment Posted on Uncategorized

Diving Deeper into Deep Work

Introduction.

Jacki Johnson recommended my business partner, Verena MacLean read a copy of ‘Deep Work’[1], a book by Cal Newport.  Having just returned from a three-month sabbatical I snaffled it, intending to skim read, but ended up absorbed.  Cal offers a solid contribution in Part 1.  I enjoyed his fresh approach and perspective, much of what we in the Working Journey and our affiliates[2] have longed believed critical to individual, organisational and societal well-being.

For example, the opposite of deep work is ‘shallow work’; which is a product of dysfunctional and ineffective work systems governed by a tyranny posing as collaboration.  In our leadership workshops, which are challenging and require deep work, you can see which teams are dysfunctional by observing their learned behaviours.  As Cal says, the principle of the ‘easiest path’ is on display, manifested in how delegates disengage from the learning process to meet shallow work demands, to appease their leaders and produce busyness. This is dangerous behaviour when amplified company and society wide.

This short article attempts to summarize and amplify the key points of Part I and I do this to reinforce the need that deep work is now more necessary now than at any other time in history.

Key Points from Deep Work;

  • His Deep Work hypothesis is; The ability to perform deep work is becoming increasingly rare at the same time it is becoming increasingly valuable in our economy. Consequently, he says, the few who cultivate this skill and make it a core of their working life, will thrive.  Deep Work takes place within the context of a ‘Great Restructuring’ of our economy that sees our technologies racing ahead, while he argues, our organisations and skills are lagging.  As we have heard from many sources we are told to expect up to 40% of our current jobs will disappear, falling victim to automation and AI. Organisation will hire ‘new machines’ rather than ‘new people’.
  • Deep Work is defined as; “Professional activities performed in a state of distraction-free concentration that push your cognitive capabilities to their limit. These efforts create new value, improve your skill and are hard to replicate.”[3]    He gives examples of how famous people used to (and do) lock themselves away to work, to focus deeply and avoid the shallow distractions.
  • Shallow Work, defined thus; ‘Non-cognitively demanding, logistical-style tasks, often performed while distracted. These efforts tend to not create much new value in the world and are easy to replicate’[4] He links the growth of shallow work to the age of network tools, the need for constant connectivity, instant messaging and response demand, to social media presence and the distractions of open space offices.  He argues that knowledge workers are forced to replace deep work with increasingly shallow work to satisfy demands and ‘productivity’.
  • He also argues that there is increasing evidence that the shift towards shallow work is not a choice that can be easily reversed, and it is possible he says, that you can permanently reduce your capacity to perform deep work.[5]
  • One of the factors you need for deep work is myelin, the layer of fatty tissue that grows around neurons, which allows cells to work faster and more effectively. The science says that you get better at a skill as you develop more myelin around the relevant neurons.  This he argues, provides the neurological foundation for why deliberate practice work are so important.
  • Deliberate practices are needed to cultivate more quality, undistracted time to focus our attention on adding value. This means being able to focus on difficult work or challenges for long, uninterrupted stretches.  Cal uses the following formulae for productivity; High-quality Work Produced = (time Spent) x (Intensity of Focus).

This ability to focus and produce is constantly undermined by shallow work; e.g. – incoming emails that distract you, web browsing, back to back meetings, moving from one thing to another, your time being managed by others and ongoing interruptions through constant connectivity and a required social media presence. I will add another factor acting against deep work; poorly trained and incompetent managerial leadership practices and ineffective organisational design.  The bottom line; Shallow engagements end up permanently damaging your ability to focus, because sufficient myelin is not produced.

Cal argues (supported with examples and research), that the type of work that optimizes your performance is deep work.  He makes the point that not everyone can do deep work and cites examples of some CEOs such as Jack Dorsey who founded Twitter, who does not do deep work, but then gives example of Bill Gates who was a deep work maniac. He points out that to ask a CEO of a huge company to spend four hours thinking deeply about a single problem is a waste of what makes him or her valuable, but rather to hire smart people to think deeply and ask him or her for a final decision.  Cal also makes the point that there are some parts of the economy where deep work is not valued nor necessary.[6]    

He argues that the big trends in business today are working against people’s ability to perform deep work and many other ideas are being prioritized over the need for employees to do deep work.  I often tell delegates attending our leadership courses to hang a sign outside their cubicle or go home and leave a note which says, ‘Manager Thinking’ or just ‘Thinking’.    It’s part of the job, it’s not some extraneous extra or time out.  True that Agile and scrum project management frees people from attention breaking connectivity, but only to a point and not at the more complex work themes of an enterprise.  The tyranny of busy does not equates with productivity.

Cal looks critically at the internet tools released by for profit companies, funded by investors who want returns and design by twenty-somethings who are often making things up as they go along.  He says we are quick to idolize these digital doodads to signify progress and outliers of a brave new world without any deep work about them or their consequences.  Deep work in contrast is not sexy, is old fashioned and often non-technological, but it is and can be deeply satisfying.

The addictive behaviour of shallow work is even more dangerous then we suspected.  Spiritual leaders have long argued that we need to still our minds, to stop continuous thinking and to let go our ego and just ‘be’.  Our addictive monkey brain embraces ‘shallow work’ as it feeds our ego, robbing us of the ability ‘to be’, demanding ‘we do’.[7]  This creates ongoing stress, worry, psychosomatic illness and loss of ‘well-being’.

Deep work Cal says is a rare commodity which produces significant value.  Unfortunately, deep work is increasingly rare, and the requisite activity is not valued.  Distraction inducing behaviours are valued and rewarded (instant replies, availability) yet at the same time these values destroying behaviours are difficult to measure and even more difficult to detect.  He calls this the metric black hole.  As knowledge work and complexity increases, it is becoming harder to measure individual (and team?) contributions to a business output.  A study by a French economist showed this to be true, especially the irrational extreme growth in executive salaries[8].  Cal argues that if these behaviours could be shown to be clearly hurting the bottom line, they would not survive. Our own work shows deep work is almost absent in our studies of CEO.  A CEO has their own value to add, and this is not something that can be delegated. Unfortunately, many CEOs are not clear on how they add value and where they should focus their own unique deep work.

The head of the list of distracting behaviours is what he refers to as the culture of connectivity. He provides research examples to show this culture of connectivity and the need for instant responses is a myth in terms of improving productivity or as a demand to client need.[9]   This culture of connectivity hurts employee well-being, destroys deep work and probably does not help the bottom line.  Why then is it so pervasive? He feels the answer lies in the principle of ‘least resistance’ which is in not being clear on the impact of various behaviours to the bottom line, so that we will tend towards behaviours that are easiest in the moment.[10]

It’s here he talks about time management that sees people managing their day from their inbox or having their work managed by others. This makes planning difficult, encourages shallow work and adds to the metric black hole. In our terms people want to earn their keep, but for many knowledge workers they are not clear on what that means.  Cal argues that because of poor leadership people substitute clear goals and clear value adding work for the industrial age proxy, namely being busy.  This is a fractal of Taylorism and he defines it thus; In the absence of clear indicators of what it means to be productive and valuable in their jobs, many knowledge workers turn back towards and industrial indicator of productivity; doing lots of stuff in a visible manner.[11]

This resonates because it reinforces that not only is clear unique value adding lost or misunderstood, but so is well-being through poorly designed and lead enterprises.  Job ambiguity, role confusion, meetings, lack of metrics and disruptive behaviours thrive in an increasingly complex business landscape.

A Deeper Understanding of Deep Work

While Cal has made a significant contribution to the importance of deep work, his real contribution is in raising this issue and highlighting that it requires urgent attention. I would like to add some amplifying thoughts to his work. First, let us define ‘work’ and what does ‘hard or difficult work’ mean. In our world of Requisite (as required by the nature of things) we define work complexity or ‘hard work’ as;

  • the number of variables operating in a situation, the clarity and precision with which they can be identified, and their rate of change,
  • ‘Work’ we define as; ‘The exercise of judgement and discretion in decision making to produce a specified output within a targeted completion time, with allocated resources and methods and within identified limits.’

There are three spirals in our work.  The first is that of Structure.  Adding Value is a fundamental design principle.  We use a nested hierarchy where each work theme adds a unique value.  Strategy defines structure and therefore the number of work themes required is derived by understanding how value is proposed to be added. Structure is the framework on which muscle is added.  All work is based on dealing with increasing ambiguity and complexity in decision making and therefor the need to exercise appropriate judgement.  The complexity of exercising judgement rises exponentially with the complexity of the work theme.  All the required work themes must be present for organisational coherence and effectiveness.  Now here is what is missed;

Each work theme requires the associated deep work to take place to enable clarity of work and the contribution of each theme and roles to emerge. This ‘deep work’ is essential for each CEO, each executive and every managerial leader; individually and as a team.  This DOES improve the bottom line and it does not happen without commitment to deep work.[12]

Flow.

Cal’s focuses strongly on Mihaly Csikszentmihalyi’s concept of Flow[13]  which is a core principle of Requisite[14] teachings.  The basic idea is people are happier at work when they are deeply engaged with some work which they find challenging, interesting and in which they feel valued, are contributing and appropriately rewarded.   He believes the connection between deep work and flow is clear.[15]

Our second spiral focuses directly on the individual and the concept of flow. Our professional work[16] helps people understand their personal growth trajectories and how they prefer to work and value.  We help them understand how this has emerged in the Work Journey to date and how it will evolve in the future.  There is now a significant body of work collected from enterprises globally that describe what, how, when flow is experienced.  And it is the ‘deep work’ as Cal describes it.  People describe it as a ‘golden period’ and remember deep work as tough, rewarding, fun, challenging, ground breaking and recognised as adding value.  We have used the concept of flow for decades, linking it to how an individual will want to add value and how leaders need to create the conditions for his or her team to flourish with people in roles who can deliver at the requisite complexity of their role.[17]

Leadership is our third strand. Cal suggests that craftsmanship, part of deep work, is a link to what was lost in meaning when enlightenment and the autonomous individual which saw the world of sacred, shining things die.  We have been searching for meaning ever since. Cultivating craftsmanship is a requirement of deep work.[18]

Our daily leadership practices require a rigorous commitment to a shared set of common sense managerial leadership practices.  Often sadly it is just too hard for shallow work addicts.   When the context for ‘deep work’ is created by those executives entrusted to do so, the scene is set for ‘flow’.   Shallow work can be limited, while deep work should be part of the managerial leader discussions and expectations. This will change daily behaviors changed from shallow to deep.  Our practice of asking managerial leaders to look at how their work is allocated in the daily cycle is a powerful tool for achieving this.[19]

Our work over the last two years with Australia’s biggest general insurer in a top to bottom intervention that has seen the company turn itself around.  Astute leaders saw the value in deep work and while challenging, some of them made the call.  We had similar results were had with an South Australian organisation[20] with whom we have partnered now for almost a decade.  This is not new, all successful companies practice it in pockets. What we want is to make it the preferred and agreed way to design, operate and lead.

In the Great Restructure many will lose jobs, but others will survive, because of their skills and those capable of doing deep work, will thrive.  To join these winners, he argues the two core abilities are being able to quickly master hard things and secondly, the ability to produce and perform at a high level consistently, both in quality and speed.  These two abilities he argues, depends on you being able to do deep work and if you don’t have this fundamental skill, you are stuffed.

The remaining question which he does not attempt to answer (nor play in that space)  is what do we do about five billion people being marginalized in the Great Restructure?  What about the huge challenges we are facing?  He fails to draw that all important macro link. Of course, we are making progress but it is patchy and uneven and billions are missing out an invite to play in the new Game.  Here’s what you can do; look at the UN Sustainable Development Goals then ask how are you supporting them or even bringing them into your intent?  And closer at home, how many of our political leaders encourage deep work or do any themselves?

We need some real deep work here, I think you would agree!

 

References

[1] Newport, Cal.  Deep Work.  Rules for focused success in a distracted world. Piatkus.  2016

[2] The Working Journey is an Australian based consultancy and operates in association with a global network of affiliates and strategic partners with similar core practices.

[3] Newport, Cal.  Deep Work.  Rules for focused success in a distracted world. Piatkus.  2016. Page 3

[4] Ibid. Page 6

[5] Ibid. Page 7

[6] Ibid. Page 46, 47.

[7] Tolle, Eckhard.  The Power Of Now.  A guide to spiritual enlightenment. 1999. Hodder and Stroughton.  Reissued 2016.

[8] Ibid. Page 55

[9] The caveat is where the function of the work system is to be directly customer facing.

[10] Newport, Cal.  Deep Work.  Rules for focused success in a distracted world. Piatkus.  2016. Page 58.

[11] Ibid. Page 64.

[12] Barton, D, Manyika, J and Williamson, SK., Finally, Evidence That Managing for the Long Term Pays Off.  Harvard Business Review. Feb 2017.

[13] Csikszentmihalyi. M.  Flow:  The Psychology of Optimal Experience.  Harper and Row.  1990.

[14] Requisite Organisation is a body of knowledge formulated by Dr Elliott Jaques and which forms the bedrock of our management approach. His work, plus many others have seen this body of work continue to evolve globally.

[15] Page 87

[16] Primarily through appreciative interviews such as the Modified Career Path Appreciation (MCPA).

[17] Olivier, A.  The Magic of Stress.  Originally published by Australian Human Resources Institute but available here online and Shepard, K (ed) et al.  A. Organization Design, Levels of Work and Human Capability. An Executive Guide. 2007.  See Olivier, A,. Chapter 2 . Individual Capability and Our Working Journey.

[18] I do urge interested readers to read the book because I have only covered key points of his understanding of ‘deep work’ and highlighted that which is relevance to our work.

[19] Work is broken up into two major areas of where we spend our time; our Unique Value Adds and People.

3 Comments Posted on Requisite Enterprise

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

Leave a comment Posted on Requisite Enterprise

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
Leave a comment Posted on Requisite Enterprise

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.