Tag Archives: Organisational Systems

Yet another perspective on POSIWID and complexity

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I recently reflected on Stafford Beer’s concept of POSIWID – “The Purpose Of a System Is What It Does,” explored in Harish Jose‘s insightful article, available here A Constructivist’s View of POSIWID.

While I find substantial agreement with the principles of POSIWID as put in the article, it also reignited a question that I’ve been grappling with that intertwines with my ongoing exploration of complexity theory:

Is complexity primarily rooted in our limited knowledge (epistemic), or is it an inherent characteristic of systems themselves (ontological)?

As I read it, POSIWID seems to favour the epistemic lens over the ontological.

Does constructivism have limits in organisational contexts?

While constructivism posits that the observer defines the system’s purpose, I wonder if this perspective can be both limiting at times yet also essential. When each individual’s perception potentially redefines a system’s purpose, aligning these diverse views towards a unified organisational goal can become a formidable challenge. This multiplicity of perspectives, though innovative, risks operational inertia without a structured framework for integration, something that perhaps becomes more important for organisations that favour more decentralised decision making approaches. However, the capacity to view systems differently seems crucial as it prevents organisational ignorance to weak signals, essential for strategic pivots and ongoing viability.

Navigating purpose and adaptability in systems design

Consider a teacup used as a penholder. This simple reimagination by an individual might highlight the flexibility of POSIWID. Similarly, the repurposing of a luxury ocean liner to a floating hospital during wartime exemplifies POSIWID’s adaptability—shifting from leisure to utilitarian roles under external pressures, not individual whims. These different uses or new purposes for something that was originally designed and produced with a different intent in mind also raises questions about POSIWIDs broader impact on organisational coherence.

If there is no shared understanding or agreement of the boundaries and purposes of our organisational systems, is there not the potential for utter chaos? Granted that the boundaries and purposes also have a temporal aspect to them and are (and should be) subject to change. But right now, would we not need agreement on the basics? Are we designing and producing containers for hot beverages, pen holders, or paperweights or as in the other example, are we building a floating hospital or a luxury ocean liner?

Man-made systems like the ones we have in commercial organisations are clearly designed with some intent (which at a high level is to produce goods and/or services). The boundaries of these systems must be agreed at least enough, with the stakeholders involved to corral a level of coherence in the actions these people take in the pursuit of delivering on that purpose.

Some stakeholders are tasked with the responsibility and granted the authority to ensure that systems achieve their intended purposes. However, it’s not uncommon for these systems to remain static despite significant changes in their operational environment that should prompt revisions and updates. Often, instead of a redesign that realigns with the evolving landscape, organisational systems undergo piecemeal disconnected adjustments, no doubt with good intent but often creating local optimisation at the expense of the whole. This incremental approach can result in a patchwork of functions and features—akin to a Frankenstein’s monster—that no one would intentionally design from scratch if the system’s purpose were kept in focus. Such scenarios underscore the need for a more strategic approach to system design and evolution, ensuring that adaptations are thoughtful and cohesive rather than reactive and disjointed.

There will of course be challenges to this and to address these, the boundaries may need to be adjusted to better deal with these, hence why the boundaries can’t be completely fixed or rigid.

You may of course argue (and I for one often do) that the stated purpose of an organisational system hardly does anything remotely close to what’s on the tin. In fact more often then than, not it’s seemingly doing the complete opposite and system owners/custodians are blind to it (or choose to ignore it). Systems for collaboration and teamwork reinforces silo behaviours and reward systems entrench local optimisation efforts by focusing on individual bonuses.

Whilst Beer may have advocated for a Constructivist view, he also developed the Viable System Model which contains systems with defined purposes for organisational viability. System 2’s purpose is to coordinate the operations of system 1 for example. A school using a timetable to coordinate teachers and classes with its scares resources like rooms and equipment could not work if some teachers saw the timetable as a too limiting and decided to operate outside of it. They would of course be allowed to think this and have views on it, but they would have to accept it as an official coordinating system and work within those boundaries or try and engage in a process of redesigning it make it work better.

It seems to me that while individual interpretations of a system’s purpose can and will vary, not all can dictate its operational use. Someone (group or individual) must be able to have a final say on this, at least to lock something in at a point in time to enable people to converge on an agreed purpose. And maybe it’s time we stop relying on single individuals to do this and embrace the collective wisdom available to us already.

This tension between fluidity and fixity in organisational systems leads us into the internal debate about complexity that I’ve been grappling with. As we navigate these challenging waters, we confront the dual nature of complexity. It is in these scenarios where I wonder if POSIWID, viewed through a purely constructivist lens, always prevails.

Epistemic vs. ontological complexity: A dual perspective

This brings us to the core of my internal debate about the nature of complexity. Viewing complexity as epistemic suggests it arises from a lack of knowledge about a system. This form implies that acquiring more information or increasing capability could reduce the perceived complexity. What one person perceives as complex, another might not, owing to differing levels of knowledge or cognitive capability.

In contrast, viewing complexity as ontological means that it is embedded in the very fabric of the situation, independent of our understanding. Recognising whether the challenges we face are due to unknown variables or the inherent nature of systems can significantly influence our management strategies. I’m here reminded of Boulding’s observation that “few errors are more costly than treating systems that possess a high level of complexity with models and methodologies that lack the appropriate sophistication” which I interpret as speaking to the ontological perspective. And is this not exactly what Cynefin set out to help with, make sense of the situation to hopefully avoid or at least minimise this costly error? Risk management also speak about this in terms of the distinction it makes between epistemic risk and aleatory risk which seems to speak to the same two perspectives being present.

Integrating two systems concepts: The Darkness Principle and The Complementarity Law

There are two other systems concepts that come to mind where I think both an epistemic and ontological lens could be applied, at least in my interpretation of them (happy to stand corrected as always).

The Darkness Principle posits that no system can ever be fully known, aligning traditionally with epistemic complexity, where the complexity arises due to what we do not or cannot know. However, this principle also underscores ontological complexity by suggesting some aspects of systems are inherently unknowable—not merely due to current knowledge gaps but because they are intrinsically beyond complete comprehension.

The Complementarity Law underscores the importance of integrating multiple perspectives to achieve a more comprehensive understanding of a system. It highlights that different viewpoints, stemming from varying levels of knowledge and different worldviews among observers, may reveal truths about the system that are neither entirely independent nor entirely compatible. This synthesis of conflicting or complementary models helps appreciate the inherent complexity of a system, not as a limitation of our understanding but as a fundamental characteristic.

Operationalising systems thinking

To manage these complexities, organisations can employ methods like Critical Systems Heuristics (CSH) and Soft Systems Methodology (SSM) to foster an inclusive dialogue that accounts for both epistemic and ontological dimensions. These are of course not the only ones by any means, just two examples that I picked as they tend to deal with the politics of organisations quite well. By incorporating diverse, often marginalised perspectives, CSH and SSM can helps define clear system boundaries and purposes, integrating different worldviews, to arrive at organisational systems that are both effective and have a positive impact on stakeholders, or at last minimise the potential negative impacts.

Embracing dynamic consensus in complex systems

My ongoing reflection draws me closer to a view that we need to view complexity from both an epistemic AND ontological perspective and that whilst POSIWID can be extremely useful it can also detract unless the organisation has good mechanisms in place to explore, test and either embed or reject the infinite POSIWIDs that exist. This underscores the need for a dynamic consensus approach in organisations, one that embraces the dual nature of complexity.

Bayer is a recent example but it’s interesting to see that they need to face collapse before finding the courage to explore this. It will be intriguing to see how the parts of Bayer may reinvent themselves if they now have increased autonomy to embrace and integrate multiple interpretations of POSIWID across its new decentralised shared ownership structure. Will they be allowed to take it into new directions that better align with the sentiments of the new team and how they decide to interpret and agree on their shared purpose?

BetaCodex Network have several other examples and Corporate Rebels are building up quite the library of progressive organisations embracing new ways to thinking and acting in this space.

Organisations must continuously review and adapt their systems to remain relevant and effective, ensuring these adjustments reflect a comprehensive understanding of complexity that bridges theoretical insights with practical realities. An individual’s viewpoint, through the lens of POSIWID, may be the spark that ignites a critical pivot, but it needs to be embraced organisationally through inclusive methods like Critical Systems Heuristics (CSH) and Soft Systems Methodology (SSM) to have a lasting effect. These approaches foster dialogue that accounts for both the epistemic complexities of diverse perspectives and the ontological complexities inherent in organisational systems.

By investing in decentralised decision-making models that leverage the distributed capabilities within the organisation, companies can better match their internal complexity with the variety present in their external environment. This dynamic consensus approach integrates theoretical principles with a pragmatic understanding of the multi-faceted nature of complexity, enabling sustainable decision-making and strategic coherence in an ever-evolving landscape.

What’s your experience?

The concept of POSIWID—The Purpose Of a System Is What It Does—compels us to reflect on our own organisational roles and the systems we interact with daily. It challenges us to question whether we’re merely accepting systems as they are presented or engaging with them to reveal and even redefine their purpose. As we conclude this exploration, consider how POSIWID has influenced your approach to systems in your workplace. Have you leveraged this concept to gain deeper insights into the systems you’re a part of, or have you noticed instances where the stated purpose diverges from the actual functionality?

Moreover, complexity in our organisational systems can be both a knowledge gap to bridge and an inherent aspect of the systems we navigate. It’s a dual challenge that tests our adaptability and demands a nuanced approach. Think about how you confront complexity in your environment. Do you tackle it by seeking more information and increasing your understanding, or do you accept some of its mystery as a feature of the landscape you operate within? Or perhaps you blend these strategies, recognising that some complexities can be unraveled while others must be managed through insight and experience.

Share your experiences, strategies, and the methodologies that have empowered you to navigate this terrain.

From the back office corner to the spotlight: elevating process to enhance customer experience

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Think ‘process work’ is stodgy and bureaucratic? I’ll challenge you to see it as the secret cornerstone of exceptional customer experiences.

Let’s talk about a term that’s become almost taboo in some circles: process. Yes, that “dirty word” that, mention it in the wrong company, and you might as well have confessed to hating puppies. In my two decades of navigating the corporate seas, I’ve seen firsthand how the mere mention of process work can send a shiver down the spine of even the most stoic operations team. It’s a peculiar phenomenon, considering that processes are the skeleton upon which businesses hang their promises to customers.

Take a moment to consider the irony here. In our quest for division and specialisation, we’ve segmented our organisations into silos that often lose sight of the overarching goal: delivering stellar customer experiences. I once worked for a global organisation where, in a moment of what I assume was bureaucratic madness (or par for the course depending on how you see it), CX and process work were cleaved apart like some ill-fated Shakespearean romance.

The reasoning? Process work was deemed too “back office” or too technical with applications being integrated and not sufficiently customer-centric—a perspective as fascinating as it is flawed. Having sailed the oceans of process, service design, and CX, I’ve yet to meet anyone in the process domain who isn’t deeply committed to customer satisfaction. After all, if a process doesn’t ultimately serve the customer, what’s the point?

My musings on this topic were sparked over coffee with a friend, so it felt appropriate to use a restaurant analogy to depict the folly of what was happening. Through organisation design decisions we’d separated menu design (read: CX) from the ability to actually deliver the dishes (process work). What’s the use of a redesigned menu if the kitchen lacks the means to bring these culinary visions to life? This disconnect is detrimental to value creation.

And don’t get me started on the trend of digitalisation for its own sake. Being nudged towards an app to order a simple coffee, entering details more suited to a medical exam than a caffeine fix, feels less like progress and more like an obstacle course between the customer and their desired experience.

I can see a situation where, let’s call it CX is a separate function but it would only be if they were obsessed and specialised in research, analysis and hypotheses testing to feed these insights to the “process folks”. Like an essential connection to the ever changing operating environment to enable the process folks to make better decisions about how to enhance the customer experience

Organisations balance exploration and exploitation. The money today is usually in exploitation which for most places hinges on being able to deliver on a promise again and again to the same level of quality. For most organisation this is through process, one way or another Depending on the context the granularity of required process specification and level of step by step adherence will differ and that must of course the accounted for.

Yet, it’s not all doom and gloom. The evolution from rigid to adaptive process design, embracing flexibility and acknowledging the vast grey areas of operation, offers a beacon of hope. Adaptive case management has been around for a long time and we can take a less myopic focus on defining processes to the nth degree to show a path forward where a balance between efficiency and customer-centricity can coexist.

Here’s where we circle back to the crux of the matter: value. Whether a process impacts the customer directly or operates in the realm of compliance, its ultimate measure is the value it delivers—both to the customer and to the business. This brings us to the strategic principle of the “critical few,” where not all processes are created equal in their impact on customer satisfaction. Identifying and prioritising these key processes is where the true art of business strategy lies.

As we stand at the crossroads of tradition and innovation in process design, the mandate is clear. We must champion a holistic approach that recognises the intrinsic link between effective process management and unparalleled customer experiences. It’s time for businesses to take a hard look at their processes, asking not just how they can be more efficient and effective, but how they can more dynamically serve the beating heart of any business—the customer.

Innovative products like Apromore and Capsifi will no doubt tap into ways to utilise AI combined with some human ingenuity and creativity to reshape how we approach process management and business architecture in general in different ways, no doubt with a speeds that we now will think are impossible.

In the end, the message is simple yet profound: the future belongs to those who can reimagine process work as an integral, vibrant part of delivering exceptional customer experiences. Nobody should put process in the corner thinking it’s not integral to CX outcomes, lift her out and up in the air.

What’s your experience? Is process a dirty word in your organisation? Is it relegated to the corner or out on the dance floor?

How this frustrated enthusiast drowned in the sea of organisational stupidity

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Recently, I found myself reflecting on my challenges in navigating the turbulent sea of politics within a large organisation, when prompted about the specific culture there. I know many people there that seem to thrive but it was a challenging environment for me and some of my team.

It can be tricky to balance the need to “deliver” and make the changes that you’ve been hired to do, when the runway to build up the social capital needed to call out that the emperor is naked, is short. Especially if you are in support role, providing advice as opposed to having line role authority and accountability.

What I observed quite quickly was a huge amount of time, effort and money that  could have been avoided or saved by approaching some challenges based on relatively basic principles of systems thinking and complexity theory. Foundational aspects to me of Business Architecture.

Confirmation bias perhaps, but it fits a view I have developed over the years that many organisations somehow survive and “perform” despite themselves. It is most certainly not by deliberate design for overall organisational performance, that’s for sure.

I can’t help but wonder how many boards or senior executive teams (to the extent that they can be called teams…) would be judged as competent, if investors and analysts were fully aware of the ludicrous goings-on within these large organisations. The sheer amount of wasteful activities and pointless busywork that occupies the daily routines of their employees is utterly mind-boggling.

Three areas that in this case stood out like the proverbial canin appendage to me;

  1. Prioritisation and resource allocation
  2. Understanding of performance
  3. Intervention design

1. Prioritisation and resource allocation: Funding is always scarce so you would think that there would be an appetite to make sure it was directed to where is would make a difference… (well, you’d like to think that at least but apparently not). Unclear prioritisation was par for the course, combined with a resource allocation system that didn’t consider either capacity to deliver on all “priorities” or the allocation of the constraining resources.

2. Understanding of performance :The performance dashboard of a key end to end process which showed it not performing as desired even though all sub-processes did… (no one wanted a bar of it…). The individual stage targets were met so bonuses were secured.

3. Intervention design: The rushed digital transformation, where the program of work targeted enhancing individual instances of business capabilities, all seeking to develop best in class solutions. A classic Russ Ackoff case of ‘the best car parts don’t make the best car – they don’t even make a car at all’.

Whilst this last example refers to a specific intervention it is one that permeates thinking across the board when it comes to organisations. The reductionist view that by getting the parts right we also get the whole right. Adam Walls as he so often does, pointed this out in a recent comment in a post about what Business Architecture is or isn’t.

“The problems starts at the top and permeates every layer of the organisation. Budgets cause competition for resources and personal politics impact the communication channels to such an extent that whole sections don’t work together. Add to this HR practices which focus on individual performance rather than cross business communication and we have dysfunctional silos which actively oppose each other.”

The thinking that influences the design choices that organisation make, quite literally create dysfunction from the start which circles back to my earlier point; organisations manage to survive despite themselves (even though the longevity and lifespan of many enterprises is shortening rapidly).

I suspect that the reception of my advice and concerns might have differed if they had come from an external advisor. That is also telling of what type of organisation you are dealing with. To what extent do they actually listen to employees? Many consulting reports just repackage the insights from employees that the organisations is hellbent on not listening to, because what would they know…

I didn’t survive in this instance, but as Professors Mats Alvesson and Andre Spicer make clear in their book “The stupidity paradox”, organisations must encourage people to be the devil’s advocate. Someone must argue for the opposite of whatever the official corporate line is. And let’s not forget Dr. Richard Claydon who taught me that irony can be an effective weapon. The message from these three is clear; organisations need a court jester, someone who can speak truth to power cloaked in humour.

Until we are willing to challenge the current paradigm of thinking nothing will really change and “transformations” will remain at the surface level doing sweet FA to move the dial.

The questions remain – who is ready to listen and who is bold enough to take action?

Clearly, this jester wasn’t amusing enough in this instance and is now on the lookout for a new court to entertain. So, if this was of interest and you know of a receptive audience, shout out.

Let’s share ideas and learn from each other. Who knows, your insight could be just the ticket for someone else. Go on, hit like, share, or drop a comment below.

Ever feel like you’re in a Monty Python sketch when you step into your office?

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Picture this: A corporation claims innovation is its lifeblood. Yet, it smothers creativity with a pillow of bureaucracy. It preaches agility but moves at a pace that makes glaciers seem like sprinters.

Isn’t it peculiar how the same organisation that prides itself on communication can’t seem to master the art of a simple, clear email?

And let’s not forget the adoration for buzzwords. ‘Synergy’, ‘disruption’, ‘leverage’. Peppered in every meeting, every presentation. Yet, the only disruption seen is the constant reshuffling of top management.

How about the paradox of hiring for diversity but promoting for conformity? The irony of espousing work-life balance while flooding employees with after-hours emails?

These corporate absurdities are as common as they are nonsensical. We laugh at them, and vent about them, but seldom challenge them.

But here’s the thing.

These absurdities are not the result of some cosmic joke. They’re products of decisions, policies, and cultures that prioritise the wrong things.

We can’t merely accept them as ‘part of the job’. We need to call them out, question them, laugh at ourselves for being so stupid, and if needed, fight against them.

Next time you face an absurd corporate practice, don’t just roll your eyes. Ask ‘Why?’

To stop the cycle of corporate absurdities you in the first instance need to spot them. How you surface and challenge them is where politics come into play and that’s perhaps a later section of the book where we help you find your way through that mess without losing yourself or your head in the process.

Ready to break the cycle and start asking ‘why’?

Chime in below with an absurd corporate practice you’ve spotted!

Let’s get the conversation started. Together, we can create better organisations.

Surfacing the hidden value creation networks in your organisation

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Ever considered how to surface the value creation networks in your organisation?

Thinking out loud and wondering if there would be some way of connecting the power of organisational network analysis (ONA) with the rigour of the requisite conversation framework (RCF).

People, social beings as we are, need to connect and have conversations with others to do our work (at least that’s true for most roles).

I would assume that ONA can tell you who I am connecting with and through what channel (hopefully not linked to video surveillance of who I had a coffee with in the kitchen…) and these days AI may be able to work out if it’s a social connection or work-related.

But could it be further enhanced by being able to provide deeper insights into the nature of the conversations by anchoring it in something like the RCF to trace the value creation networks from idea/concept to delivery?

Don’t keep your thoughts to yourself. Like, share or even better put your thoughts in the comments.

Is it time to bin the idea of “Change Management”?

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Moving from the fallacy of planned, predictable change to embracing feedback driven change and the reality of unpredictability and no control.

The term “Change Management” itself has significant limitations and assumptions attached to it. Manage change sounds much like time management. No one can teach you to manage time any more than you can manage change. With time management, you can only control the actions you take and prioritise them to make the best use of the time available, and we all the get the same amount each day.

As with time, you cannot manage change per se, you can only control your actions in relation to change. Your actions will undoubtedly solicit a response and your actions will be interpreted in ways that you cannot with certainty predict in advance.

Many change management tools and frameworks seem to come from a view that all change is a top-down imposed thing that has to be “sold” to employees or it needs “buy-in” from key stakeholders.  Furthering the notion that the parties concerned have little input into the change itself and need convincing or manipulation to get into agreement. Also, there are models that reinforce the notion that this imposed change will trigger an intense feeling of loss akin to that we go through when we’ve lost a loved one. Given the levels of engagement in most workplaces, I doubt that people care that much about changes in the workplace. We’ve been fed this stuff so often and so repeatedly it has become the truth in the domain of change management.

The conventional view of Change Management is based on the assumption that you are already in a steady state and introducing change brings about a level of uncertainty, something that challenges the status quo. In most organisations this is hardly the reality. Initiatives hit business units from every direction all the time. If not internally generated restructures or process improvements then it is initiatives from HR, Safety, or Finance that are imposing changes as supporting functions often do, forgetting that they are there to in fact “support” the primary activities of the business in achieving their purpose. If we’re not dealing with internal change, then we’re dealing with changes in the marketplace or from regulatory bodies. So the steady state that many change management models talk about is more of a myth than anything else.

Many organisations, in line with their command and control mantra, dictate what tools must be used for Change Management, and in what order. Change Management is treated in the same fashion as traditional Project Management and run through various stage gates of approval. This further creates the illusion that we are in control and that projects and change in complex systems can be managed as if you were building a machine. We can design it, build the parts, and put it all together. If we get one part wrong, we can always build another and replace it with a new shiny one.

This view represents a plan-based approach to change; a view that is not very helpful when dealing with human systems, which not conform to a Newtonian-Cartesian view of the world. Change in human systems belongs in the complex domain. Niels Pflaeging suggested in a recent article that change in these systems is like pouring milk into coffee, once it’s done it changes the coffee forever, you cannot take it back and the pattern in unpredictable. This highlights the need for feedback driven change as a more appropriate approach to work with the complexity, rather than plan-driven change that assumes predictable cause and effect.

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I believe that we can significantly lift the performance of our organisations changing our approach to Change Management. In fact, I believe that real success means that the term is self, disappears into the history books of management fads as “change” becomes so embedded in our way of working that we don’t need reforms or transformation programs.

In organisations that always change how they do things, they test the value of the change against their purpose as an organisation. In those organisations there is no such thing as “change management”. People are so connected to the purpose that initiatives that are seen to further the organisations purpose emerge and get support without elaborate plans, milestones or blueprints. Which is not to say that selected models from the traditional Change Management library cannot be used, but if they are, they are pulled in as needed and not by top-down decree. My recent post referenced the book “Reinventing Organizations”, which has plenty of examples of organisations that operate this way.

We have a tremendous opportunity to shift our organisations for the better if we only are willing to challenge and critically reassess how we see the world of organisations. To achieve this, we need to shift our focus away from individuals and lift our gaze towards the systems of organisation, the systems that drive the behaviours we experience today. Once there, look further inwards to identify the underlying thinking and beliefs about people and how that has influenced the design of these systems. This is change with an undefined end point as you continuously poke the broader system to see how it responds, you make sense of the ripples you create and take further action, either dampening something or boosting something, and again sense the response.

When we start taking steps to rethink and redesign our organisation let’s engage people in co-creating their environments to set up the conditions for positive change from the start. It is an excellent way to get ownership and people tend to be more ok with things when they have been included in the decision-making process. The process outlined in Sociocracy, for example, is a great start.

Granted, we must take a Theory Y view of people and their capabilities so I guess that is going out on a limb for some. I dare you to take that step and hold the tension – you will be surprised to see what people are capable of when given the chance if you choose to see the world through a different lens. There is a real leadership challenge here for the daring one. Holding the tension when shifting your organisation or business unit from the claws of the Theory X mindset to one designed from a Theory Y perspective will certainly test your leadership capability.

Bye bye Elliott Jaques, it’s been fun but it’s time to part ways!

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What type of organisation do you see before you if I tell you that there is no top down strategy, no pre-defined roles, no budgets, no performance targets, full transparency and sharing of information (incl. financials), self-organising teams, fully decentralised decision-making, and where change management is a superfluous concept? Does a vision of some hippie commune, Kibbutz style co-operative emerge or perhaps a not-for profit charity type organisation?

What if I then say that it is not only a single organisation but a suite of very successful organisations ranging in size from around 100 employees to 10s of thousands of employees, across industries and in both the not for profit and for profit sector?

Perhaps you are asking yourself how you could run a large organisation without the foundations; a clear strategy, clear roles and accountabilities, levels of authority, defined performance targets cascaded down the organisation to measure how well strategy is executed, a well-developed project management framework with its associated budgets and Gantt charts, annual performance reviews and all the other practices we’ve been conditioned to believe are essential.

In his book “Reinventing Organizations”, Frederic Laloux has researched organisations that operate from level of consciousness that represent a significant shift. He categorises the practices of organisations using a spectrum of colours to represent the level of consciousness that shapes the organisational mindset.

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Plotting the successive stages of human and organisational consciousness on a timeline, the results tell a clear story; evolution seems to be accelerating, and accelerating ever faster. We have according to Laloux never been in time where so many people operated from some many different levels of consciousness at the same time. The same is true for organisations, Red, Amber, Orange, and Green Organisations are found working side by side in the same cultures and cities.

Graph 2

The difference between the organisations that Frederic Laloux has researched for this book and most other organisations today is not only stark but also incredibly exciting – not only is there is a better way, but there is plenty of evidence of its positive impact on people and its longevity.

Now here is the catch – you will only see the potential and the power of these practices if your adult development stage aligns with this worldview. As humans, we develop in stages, just as a caterpillar through sudden transformations becomes a butterfly, or a tadpole a frog. A key aspect of human development stages is that there is nothing inherently better or worst being at any level – it makes no sense saying that an adult is better than a toddler. However, depending on the task a certain stage may be a better fit. I have referred to adult development in previous posts, click here for link.

For anyone familiar with the Cynefin framework it quickly becomes evident that the practices that these organisations share are well suited for operating in complex environments. There is an incredible shared sense of purpose, which guides decision making on a day-to-day basis. There are also just a few clear and simple rules or principles that guide what is acceptable behaviour. This allows for initiatives to emerge and if there is merit in them, people will naturally support them and give them their energy. Because decision-making is so inclusive and closely tied to the organisational purpose, change does not have to be “managed” in the way we think about it in traditional organisations.

Below are some of the practices that are common and represent what Laloux refers to as Teal Organisations. If you read these and think – how crazy, could never work, maybe it is time to reflect on your view of people – are you a Theory X or a Theory Y supporter?

Each level of consciousness has brought with it some breakthroughs compared with the previous level. For Teal organisations these are; Self-management, Wholeness, and Evolutionary Purpose.

The following is quoted directly from a summary of the book by Ulrich Gerndt from Change Factory.

Self-management: operate effectively, even at a large scale, with a system based on peer relationships, without the need for either hierarchy or consensus.

Wholeness: practices that invite us to reclaim our inner wholeness and bring all of who we are to work, instead of with a narrow “professional” self / “masculine resolve” etc.

Evolutionary Purpose: organizations seen as having a life and a sense of direction of their own. Instead of trying to predict and control the future, members of the organization are invited to listen in and understand what the organization wants to become, what purpose it wants to serve.

Self Management Practices Wholeness Evolutionary Purpose
Self organizing teams Self-decorated warm spaces without status markers Organization seen as a living entity with its own evolutionary purpose
Coaches w/o P&L responsibility when needed Clear values translated into explicit ground rules, Strategy emerges organically from collective intelligence of self-managing employees
Almost no staff functions Ongoing values discussion Decision making by listening to organization‘s purpose (everyone, large group, meditations…)
Coordination and meetings ad hoc when needs arise Quiet room, meditation practices, team supervision, peer coaching Concept of competition irrelevant (embraced to pursue purpose)
Radically simplified project management, Storytelling practices to support self-disclosure and community building Growth and market share only important in as much they help achieve purpose
Minimum plans & budgets Absence of job titles and descriptions to allow selfhood to shape roles Profit as lagging indicator: will come naturally when doing the right thing
Fluid and granular roles Honest discussion about individual time commitments Inside out marketing: offer is defined by purpose
Decision making fully decentralized (advice process) Regular time devoted to address conflicts “Sense and respond“ planning/budgeting/controlling
Transparent real time information sharing incl. financials Specific meeting practices keep ego at check No or radically simplified budgets, no tracking of variance; no targets
Anybody can spend any amount of money provided advice process is respected Distributed initiatives taking “Change management“ no longer relevant as organization constantly adapts from within
Formal multi-step conflict resolution process Recruitment interviews by future colleagues, focus on fit with organization Suppliers chosen by fit with purpose
Focus on Team performance, peer-based process for individual appraisals Personal freedom for training, focus on culture-building Total transparency invites outsiders to make suggestions to better bring about purpose
Self-set salaries with peer calibration, no bonus, profit sharing Personal inquiry into one‘s learning journey and calling Conscious sensing of what mood would serve best
Caring support to turn dismissal into a learning opportunity

This book really shifted my thinking about organisations and leadership; maybe I read it at the right time in my life and/or at a juncture where my understanding of complexity was sufficient to enable this shift. Either way, it was the straw that broke the proverbial camel’s back with respect to my long-standing relationship with Elliott Jaques and structured hierarchy. The more I am learning about complexity the harder this relationship has become. Faced with evidence that disprove my current view – I now have to dismiss some of the concepts I have been working with and often promoted for a long time, or at least recognise their limitations in complex environments.

I had an exchange with Jurgen Appelo a few months ago where we debated the idea of levels of work in manager – subordinate relationships. Jurgen has for a long time argued that management is too important to leave to the managers, I now feel that I have a much better idea of where he is coming from.

I still maintain that people have different levels of capability and that a successful outcome is to some extent dependent on a good match between complexity and capability. However, this does not have to be formalised through a hierarchy with defined role vested authority and accountability, personally earned authority seems to suffice. Collectively we are smarter than any individual is and not many complex tasks are completed in isolation from everyone else in the organisation.

The sad part of the research findings that underpins the book (although not surprising) is that Frederic was not able to point to any examples of organisations shifting and sustaining Teal practices without the following two conditions:

  1. “Top leadership: The founder or top leader (let’s call him the CEO for lack of a better term), must have integrated a worldview and psychological development consistent with the Teal development level. Several examples show that it is helpful, but not necessary, to have a critical mass of leaders operating at that stage. .

  2. Ownership: Owners of the organisation must also understand and embrace Evolutionary Teal worldviews. Board members that “don’t get it,” experiences shows, can temporarily give a Teal leader free rein when their methods deliver outstanding results. But when the organisation hits a rough patch or faces a critical choice, owners will want to get things under control in the only way they know that makes sense to them – through top-down, hierarchical command and control mechanisms”

Reinventing Organizations – Frederic Laloux

All the adult development theories I have come across suggest that only a relatively small percentage of the adult population is at a post-conventional or in a later developmental stage akin to that of Teal Organisations. Possibly even fewer in leadership positions where they could affect any change. Most operate from a conventional stage and hence we have so many of the achievement driven organisations we see and potentially work in today.

So perhaps given that last paragraph I should not totally give up on all of the ideas and concepts from RO and Systems Leadership Theory, some may have a place in making orange and green organisations better in some ways even if they will not guide us into Teal territory.

Hopefully the pace of development truly is accelerating, as that is a prerequisite for more Teal organisations to emerge that more people get to the later stages of adult development. Even now we can start to see the how younger generations prefer to operate, it is in a similar fashion to what Gary Hamel, in his book “What Matters Now”,  notes are common practice on the web:

  • No one can kill a good idea
  • Everyone can pitch in
  • Anyone can lead
  • No one can dictate
  • You get to choose your cause
  • You can easily build on top of what others have done
  • You don’t have to put up with bullies and tyrants
  • Agitators don’t get marginalized
  • Excellence usually wins (and mediocrity doesn’t)
  • Passion-killing policies get reversed
  • Great contributions get recognized and celebrated

Interestingly though the language in the title of the book is very much from an Orange Achievement lens rather than a Teal one. Perhaps children growing up in today’s hyper connected, peer sharing world will be naturally drawn to organisations where Teal practices are in place? For my own son’s sanity I really hope he does not have to suffer through the same level of corporate BS that his parents have (and are still dealing with).

For a summary of the book visit www.reinventingorganizations.com or for a video http://www.youtube.com/watch?v=gcS04BI2sbk

understanding the work part 2

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understanding the work part 2

In my last post when I spoke about systems of work, I also made a point that many Managers don’t really understand the system of work that they are accountable for. In this post I want to dig a bit deeper into this topic.

As you move vertically through the management structure of an organisation the work being done is different (or at least it should be). It is important to understand what is different about the work at different levels of management and that it is not just more of the same or more difficult work technically.

Complexity

So what is it that is different, what do we look for to make this distinction? The answer is – (as it usually is…) it depends. It depends on the level of work, as it is both the focus of the work and the complexity of the work that should shift as you move vertically in the organisation. Gillian Stamp from BIOSS developed a helpful framework to distinguish the difference that makes a difference with respect to the work at different levels of management. The product of this thinking is the idea of Work Domains and it builds on Jaques’ idea of  “levels of work” and I think presents it in a better way. Stamp and Elliot did work together for some time at BIOSS so no surprise that they share this view.

domainsincolour

Three Tools of Leadership

Increasing complexity means you as a Manager need a broader set of tools to work with. At lower levels your own behaviour is your main tool to influence the team together with and understanding of team dynamics (i.e. team leadership). Understanding and being aware of how your interpersonal leadership style impacts performance and how your team work together is of course critical at all levels of leadership but a lower levels i.e. supervisor and/or first level team leader the authority and accountability for organisational systems are not there so as leader you can only influence these, not authorise changes to them.

There is a saying that I first came across when working with a global mining company many years ago that had a great impact on me. They used it in the context of safety issues but it is applicable in a broader context:

“The standard you walk past is the standard you accept.”

In other word, your actions or inaction as a leader when unproductive or undesirable behaviours occur within the team sets the tone for what is accepted.

However, as we move up through the hierarchy relying on your interpersonal skills alone is no longer sufficient because you will no longer be able to have a personal relationship with everyone in the organisation.

So what other tools might leaders in more senior positions require?

Systems Leadership suggests that there are three tools; systems, symbols, and behaviour, that successful managers understand and use.

So whilst, role modelling is critical for challenging unproductive behaviours, it is not enough for sustainable change. You also need to align the systems and symbols of the organisation.  Having said that, if you as a leader cannot be bothered to actually live and behave in way that is consistent with what you want staff to do you might as well throw your change initiative in the bin straight away.

When I said earlier that many managers do not understand the system of work they work in or are accountable for this is exactly what I mean. There is lack of understanding of how the system is shaping and driving the behaviour of the people and overall performance. Without a theory for understanding this, changing it becomes a terribly difficult task.

The desire is of course for the authorised systems to be productive. Often they are either not as productive as they could be or they are productive despite of the manifest design. In other words the extant (or real) system is different from the official authorised system, usually became staff develop unauthorised “workarounds” to produce good customer outcomes.

Systems_Matrix_2

For senior executives it is essential to understand how systems work so that they can design appropriate organisations systems to deliver on the purpose of the organisation. Designing the organisation is the role of senior management; a role that I often see being delegated way down in the HR function to someone with no real authority, often lack the capability to do this level of work, and often with no real understanding of organisational design theories or organisational systems.

A helpful theory for understanding the critical functions in an organisation and the relationships between them is Stafford Beer’s work in Management Cybernetics – The Viable System Model. In a previous post there is a video by Javier Livas explaining the Universal Management System, which is the VSM in less complex language. If you want to watch an in-depth video of the VSM by Javier, you can email him to request access details from his YouTube account. I thoroughly recommend doing so it you can find the time to view the full 2 hour video.

In short, the VSM views an organisation as a system that requires five key functions to remain viable (i.e. maintain its existence). The five systems are recursive (or nested in each other like a Russian doll) so every system one is in turn made up by the five key functions:

System 1 – Operations

System 2 – Coordination

System 3 – Management

System 3* – Audit & Monitoring

System 4 – Development

System 5 – Policy

I will not go on in detail about the VSM as many other better writers and thinkers have done a great job of this already, Beer alone wrote at many books on the topic: The Brain of the Firm, The Heart of Enterprise, Diagnosing the System of Organisation to name a few.

I have found the VSM to be an outstanding theory to work with when diagnosing organisations. It provides immense value and insights and I can discuss the insights with clients without getting into the underlying theory in too much detail. The beauty of the VSM in my view is the recursive nature of the model, which means it is applicable for systems at any levels and Managers across an organisation, can all get value from it. It does require some investment in time to get your head around but it is well worth the investment.

Another “theory” I am a big fan of is the Vanguard Method. Its use in service organisations and it has greatly influenced my thinking and my work. Like any method it is not all-encompassing and I have found the mix of The Vanguard Method, Systems Leadership and The Viable System Model to be very powerful and insightful across multiple levels of organisational complexity.

In a service organisation, one of the quickest ways to make value creating more difficult, is to functionalise the work. This is just one of the many issues that emerge when applying tools and ideas that were designed to solve manufacturing issues in a service or knowledge environment. Functionalization of work is based on the assumption that someone with specialist skills will perform a task faster and to a higher quality. Whilst this seems to make sense it fails to account for the flow of the work and is based on Tayloristic view of the workplace.

If you read up on articles or books by John Seddon you will find that he keeps banging on about the damage from the “economies of scale” mentality that permeates most organisations. His point is that they should shift to understanding demand and design the flow of work accordingly. Seddon is trying to shift ingrained mental models of how organisations operate many of which came about due to Taylor’s theory becoming the mainstream one and the ideas of others such as Mary Parker Follett, were less successful at the time. Only now after the failings of the mechanistic view of organisations are we starting to embrace her ideas employee engagement and power with rather than power over. This is not to say that Taylor’s ideas were useless, they did help the industrialisation of the world. We can only guess how different the world of work might have been if Follett’s more humanistic ideas had been the dominant ones.

In the spirit of economies of scale we tend to measure activity (because being busy and high utilisation of our time is important…seemingly regardless of what we are doing) instead of measuring how well we deliver on what matter to the customer, treat all demand the same. John Seddon made life a bit easier by coining the term “failure demand” as he gave word and enhanced meaning to something I had come across many times but just treated as COPQ (cost of poor quality or rework). Its significance as leverage for improvement quickly became evident through Seddon’s work. For me earliest time I can remember identifying this was at a when doing some work to understand the complaints process in a public housing organisation where we came across an unreasonable amount of plumbing issues in relation to the amount of properties owned by the organisation. The practice was to just log the complaints about poor work, no shows and rescheduled visits as new jobs. This hid away the true volume of value work amongst all of the failure demand – i.e. demand created by a failure of doing the right thing for the customer the first time or failing to do it at all.

What Vanguard does really well is providing a method “Check –Plan – Do” for understanding the flow of the primary activities (System 1 in VSM language) at the level of recursion where the customer interaction occurs. For me the gap with the Vanguard method relates to how to embed constructive leadership behaviours and models to support a new way of thinking (and subsequently a new way of working) such as the decision making model and the task assignment model I outlined in a previous post. At higher levels in the organisations the work is more focussed on how all the other systems across multiple recursions are meant to work together to support value creation for customers.

Usually the feedback systems are in terms of hard numbers such as “productivity measures” or process output measures. More often than not, they are looking at the wrong things and provide little if any understanding of the system of work. Activity measures are in place to measure performance with a complete disregard for the inherent variety in demand that comes in and failure demand is treated as value demand.

Understanding demand, understanding variation, understanding the connections and feedback loops in “your” level of recursion (as part of the VSM), understanding the systems, symbols and behaviours that reinforce or contradict the desired culture are all important aspects for Managers to consider when they grapple with the difficult task of “understanding the work”.

It is not easy, it is a complex task but with some good theories and models it becomes less challenging.

understanding the work part 1

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Understanding the Work 

 “We humans are first of all beings in a situation, we cannot be distinguished from our situations, for they form us and decide our possibilities”

My interpretation of Jean-Paul Sartre’s (paraphrased) statement is that the environment shapes the situation and our possible choices are governed by the situation. Kurt Lewin the famous psychologist outlined the following equation to describe this.

Behaviour = ƒ(environment, personality)

When we think about organisation and how they operate the default position for most organisations is to focus solely on the person as if the person needs to be fixed.  Very few organisations understand that working on the people is working on the 5%. There is so much more leverage in working on the system.

Systems Leadership succinctly says, “Systems drive behaviour”.

I often refer to a fish tank analogy to make this point. You can keep polishing the fish when they appear “sick” or perhaps unmotivated, send them on a training course etc,  but unless you fix the water (i.e. environment) that is making the fish sick in the first place, you will at some point end up with fish floating around belly up, or they might make a break for it and jump into another fish tank.

free_hd_aquarium_screensaver

To do a good job as a manager you must understand the system of work that you are accountable for. How else could you improve or transform it? Understanding and knowing how a system operates and why it behaves in the way it does is fundamental for good management. So there is no surprise that the first part of Deming’s System of Profound Knowledge (SoPK) is: appreciation of a system.

With all these assertions that understanding systems is important you might ask why this is and where is the evidence for these outrageous claims?  Why can’t we just keep going as we have been? Surely it is all about getting good people in place?  And what do you actually mean when you say system, another IT “solution”?

One would be foolish enough to think we could start with defining what a system is. This task, however, is bigger than Ben Hur. The fantastic LinkedIn group Systems Thinking World, has a great number of remarkably bright thinkers in the field of systems thinking. Yet they cannot agree on a definition of what constitutes a system. Unfortunately the discourse about this often ends up being a competition of who’s smarter than whom and the language often becomes violent (from a nonviolent communications perspective).

I am of the school of thought that considers systems to be mental constructs; we choose what we define as a system by the boundaries we set and what we choose to include and they can change depending of what we are trying to achieve by doing so.

Having said all that, we still need to understand what it is that we are supposed to appreciate if we are to get a handle of Deming’s first point.  Since we are dealing with organisations we need a definition that is pragmatic for this field.

The definition of a system in Systems Leadership Theory is:

“A specific methodology for organising activities in order to achieve a purpose”

This involves directing flows of work, information, money, people, materials and equipment. The system provides the framework within which these flows take place.  An addition to make here is that we are discussing Organisational Systems not natural systems, so there will be a defined purpose for the system, be it the organisation as a whole, the recruitment system, or an operational system (if the defined purpose it is achieved or not is a different question).

A more general definition of a system:

1. A set of connected things or parts forming a complex whole, in particular.

2. A set of things working together as parts of a mechanism or an interconnecting network.

(a quick point to make about the second definition is that there is a huge difference working on a mechanistic system and a networked system)

For a definition of what systems thinking is about, the host of STW Gene Bellinger makes a very succinct statement and explains it with one word – AND!

There are many reasons why a shift in thinking is required. For one, we now understand that the mechanistic view of organisations, where analysis (without synthesis) and improvement of the parts in isolation, is not a good fit with the reality of organisational life.

Deming demonstrated the importance through the Red Bead experiment. The Red Bead experiment shows that performance (in this case quality of output) is a function of the system rather than the skills or capability of the individual. Deming even went as far as claiming that the variation in performance was to 95% down to the system, hence the 95-5 rule. Even if those numbers should not be taken literally for every single system, they certainly provide some insight to where the greatest leverage for improvement is.

statistics

Image Courtesy of Gaping Void

This is obviously a very simple system but it ought to make the point pretty clear and more complex systems have even more complex behaviour. Dave Snowden’s Cynefin framework (pronounced kuh-nev-in) is very helpful for framing your thinking on how to best proceed based on the type of system you are operating in.  We will come back to this later but before we do let’s get some sage advice on what constitutes a system and systems thinking in this video of Russell Ackoff.

Ackoff is an authority on the topic of systems, and systems thinking in particular. He focused mainly on systems thinking in an organisational context so his thinking is very relevant.

To further elaborate on Ackoff’s point about shifting our thinking and the value of this shift. I cannot remember where I came across this equations but I think it is a great way of highlighting the importance of how our mental models influence what we see in organisations and how we think about performance and productivity.

Organisational Performance = ƒ(organisational mindset)

What I hope becomes clear with the function above is the validity of the old (paraphrased) Einstein statement:

“the problems of today cannot be solved by the same level of thinking that created them”

John Seddon from Vanguard Consulting makes the point in the simple model below.

Thinking_System_Performance

In most of the organisations I work with there is a pretty poor understanding of the work. I don’t mean that people have no idea what customers want or that they lack technical competency in what they are doing. It is more in the sense of why things are happening the way they are.  In my next post we will dig into this a bit deeper as understanding the work is fundamental for all good Managers.

I’m ok, you’re ok – let’s fix the system (borrowed from Michelle Malay Carter)