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“How you organise the future has an awful lot to do with what you do with it … an optimist tends to have a pretty good future and a pessimist has a pretty bad one, but interestingly they can have exactly the same thing happen to them”.
Since this book was first written, the world is a very different place, in fact arguably it is one that is not only more tolerant but also more supportive of individuals and groups striking out on their own. Bolles, who regularly updates his book, more recently commented: “Four areas, in particular, have changed. First, jobs today are temporary; you don’t know how long your job is going to last. Thirty years ago, before the onslaught of downsizing and such, you could count on spending your working life at the same job. Second, jobs today are really seminars; change is happening so rapidly that you’ve got to pay close attention and learn. Third, today’s jobs are adventures; you never know what’s going to happen next. And fourth, you must find job satisfaction in the work itself; your self-esteem must come from doing the work rather than from some hoped-for promotion, pay raise, or other reward – which may never materialize. Fortunately, that dim outlook is not universally true: Some organizations appreciate, praise, and celebrate their employees, but not as many as there once were – especially not when an organization has more than 50 employees”.
Interdependence makes a case for a very different type of organizational perspective and one surmised in the idea of a ‘corporation of one’. In real terms this means we, as individuals, are our own venture, responsible for our own lives, our own ‘ways of working’ our own ‘brand’ and our own integrity – if to nothing else then to the brand we ourselves have chosen to create.
In that sense, it is a lot more about individual possibility and creating a present – and future – to live in to. Just as the corporate boys create brands evoking dynamism, agility, creativity, beauty, safety, professionalism (just take a look at some of those brands out there) we too are our own brands. Already. The only significance in doing this beyond the realm of the traditional employment contract is that it is we that are responsible for making it work. There is nowhere to hide. It’s make it work or compromise yourself. It is putting yourself on the line. More so than you ever will have to do in a large company.
Corporation of one forces us to continually reflect upon where we are – like a cybernetic loop – and monitor that position with our own desired end-state always in mind, taking on responsibility for our own learning and development and constantly re-evaluating what we are best at and what we enjoy doing the most.
Taking this model of perspective, where employees are not dependent on a company, but exist as interdependent individuals in a complex, adaptive system, what are the implications for the organisation of today?
This has spurred the knowledge and experience economies in which we now find ourselves where the models of old, such as Maslow’s, do not necessarily reflect the reality in which we live. As we are increasingly and systematically bombarded with information, the need for systemic thinking has never been more apparent.
The information economy is serving to commoditise goods and services at an ever-increasing rate and, conversely, knowledge (‘know-how’) and experiences are the primary sources of value and, it follows therefore, competitive advantage. The ‘Blurred Economy’ where speed, connectivity and intangibles pervade, where the notion of the ‘offer’ supersedes product and service-orientated mindsets and where the notion of the exchange between producer and consumer has taken on far more profound implications than previously understood economics ever explained.
These changes are already upon us. We can already bear testimony to changes in our expectations as consumers as we become increasingly demanding as to the value we get for our money. As consumer expectations change so must the cost of doing business as transparency in the global economy comes to the fore. This is the real tangible effect of the internet revolution: The ramifications in terms of stock market valuations alone have been tremendous.
The notion of an ‘Atomic Corporation’, where the effects of the information economy will cause today’s big corporations to break-up under pressure and ensure the evolution of a new landscape populated by much smaller business entities is not unrealistic. None of the factors above is in itself capable of turning our business world upside down but in combination they are enough to tear apart even the biggest of our giant corporations.
At the heart of it all lies a single phenomenon – an emerging information infrastructure that alters dramatically the costs of co-ordination and dispersion of knowledge.
As Camrass and Farncombe suggest; “a new focus on agility is needed, and as you can’t be big and agile at the same time (the internal cost of movement is too high), fragmentation is looking more and more attractive. And breaking up has never been easier. The availability and breadth of communications channels between organisations is growing exponentially, which is sharply reducing the costs of doing business”.
Regardless of your view of this radical prediction, the truth is that in order to simply survive, an organisation has to be willing and able to mobilise and engage its people and supporting infrastructure when and where customers demand. Many will be dependent upon their ability to recruit and retain the best brains with the best attitudes who are able and willing to meet such extraordinary demand.
How is your organisation responding to this challenge?
In the 1940s, Abraham Maslow developed a model known as the ‘Hierarchy of Needs and Objectives’. The assumption behind the model was one of linearity – one cannot progress to the next level until the current needs and objectives had been satisfied. His model is comprised of five orders of needs and objectives that human beings seek in life.
The lowest order need in the model is Physiological. This refers to the promulgation of life and includes, therefore, food, water, shelter and reproduction, also referred to as sex. The next order need is safety, referring to security and protection from danger. Next is the social need: We are social beings and as such need social interaction. Cybernetics also gives us the notion of the purposeful system, which can mean family, community, organisation and so on.
The next order need is esteem. This is concerned with the need for recognition individuals have in themselves and in their behaviours. It implies that humans seek positive experiences (and therefore concurs with a view held by cybernetics: the view that systems do not purposefully seek to impinge upon the desired state of others). The final order is that of self-actualisation. This is the human desire for a sense of purpose.
Critics of this model rightly demonstrate the weakness of the underlying assumption that, as a linear approach, progression is deemed a systematic response to the realization of previous orders. The model also assumes that there is no regression in position. Yet we are all aware, especially in recent years, of how our need to feel safe and secure can frequently be at the forefront of our minds, challenged by our unstable external environment. Also, conversely, how culture can flourish even in wartime situations, or in environments such as refugee camps, where people reach ‘up’ to the arts even when their physiological needs are far from being met. You may well have seen the tongue-in-cheek adaptation of Maslow, where these days even before their physiological needs are met, many modern humans have an even more pressing need – the need for WIFI (cue groaning and rolling of eyes)…!
Maslow’s model may not be quite ‘right’ these days, but it is, I believe, useful, and modern evolutions give it further potential.
We are frequently engaged by clients seeking to understand, address and embed the values of their organisations. One of the tools we might propose early on in our approach to these kinds of values projects is a Barrett survey. Concerned with how the values and cultural traits of an organisation are perceived from within that organisation, Barrett evolved Maslow’s model for his own purposes. In the Barrett model, we find seven levels of consciousness, from survival, relationship and self-esteem – which roughly mirror Maslow’s physiological, safety and social levels – through transformation and up to internal cohesion, making a difference and service. Unlike in Maslow’s model, an individual or organisation does not progress through these levels; rather it is a spread of values across the spectrum that shows a healthy balance.
Whatever models we choose to apply to Complex Adaptive Systems, be they individuals or organisations, they need to be appropriate for the situation. Now we’ve gone back to basics, which still give us a solid foundation, it’s time to look at the challenges the modern business world throws at us.
For many years leaders have wrestled with the discomfort of giving up management-style control in order to reap the benefits of achieving mastery in personal and organisational leadership. Leaders have looked to various theories which offer possible ways to ‘safely’ approach this ideal. For example:
Considering the X, Y and Z theories in the last post, and applying them in the practical sense, we could conclude that at a deeper level of understanding, there is no ‘one best way’ to influence people; it is largely a consequence of a number of different elements. Situational Leadership defines these as being the amount of guidance and direction (task behaviour) a leader gives, the amount of socio-emotional support (relationship behaviour) a leader provides and the readiness level that followers exhibit in performing a specific task, function, or objective.
The concept defines four leadership styles: Telling, Selling, Coaching and Delegating. The ultimate aim is to be able to reach the level of organizational maturity where delegation is pervasive. Hersey and Blanchard, the proponents of Situational Leadership, argue that when we take on a new task we all begin on the ‘dependent’ end of a continuum from fully dependent to fully independent. Then, each of us will move up the maturity scale at different speeds, depending on our experience, our abilities, our sense of self-worth, and the responses we get from our leader. At each stage, the leadership style to be employed can be determined by two points of view: the worker’s ability to do the task and the worker’s willingness to do the task.
J. Stacy Adams identified that workers are in a constant process of observation of the fairness of the outcomes of their own work compared with the outcomes of the work of their perceived peers. In this sense the worker defines his or her value based on a notion of equity with the organizational environment, implying a strict relationship between the two. Where there is little or no discrepancy, the worker perceives equity and is therefore satisfied. Where there is discrepancy, there is a perceived negative equity and the worker then actively seeks to restore the imbalance. This may take the form of negative action such as a drop in performance or a psychological or physical withdrawal from the status quo.
Positive equity, on the other hand, has the opposite effect. The role of the manager in this situation is to identify, understand and take appropriate action to stem negativity and build positivity; this means re-establishing and building ‘willingness’ through dialogue and, if appropriate, matching perceived value.
Victor Vroom’s 1960s theory states that an employee’s ‘Motivational Force’ is dependent upon three concepts: Expectancy, Instrumentality and Valence. Expectancy is the belief that the worker’s effort will result in the achievement of the desired performance goals (the desired end state of Cybernetics?). Instrumentality is the belief that should these goals be achieved a reward will be given. Valence is the value the worker places upon the value of that reward.
This provides a closer match to our understanding of situational leadership: if a worker is to be motivated, he or she not only has to believe the performance measure (or ‘task’) is achievable but that, once achieved, the reward will be of an appropriate value.
In OB Mod, the motivation of workers is said to be a direct result of the external consequences of that workers behaviour. As such, behaviour can be seen to be reinforced according to a continuum of consequence, the poles of which are positive and negative.
Positive Reinforcement implies strengthening a behaviour through the application of a pleasant consequence. Negative Reinforcement implies strengthening a behaviour through the removal of an unpleasant consequence. Within this continuum also lies a neutral consequence which is said to lead to an extinction of behaviour through no reinforcement at all and a punishing consequence which, again, is said to lead to an extinction of behaviour.
The above theories are all interesting models which in the past have provided leaders and managers with a set of tools to understand and maybe develop their own mental models. However, they all share something in common: a very pragmatic way of managing and one that is not necessarily appropriate in the world of today.
The term cybernetics was coined in 1947 for a new discipline that had emerged out of research into the control of physical systems. Norbert Wiener and colleagues chose a name adapted from a Greek word meaning ‘steersman’. This, it was felt, would invoke the rich interaction of goals, predictions, actions, feedback and response in systems of all kinds: mechanical and physical systems, but also biological, cognitive and social systems, abstract intelligent processes and language. Wiener’s own simple definition for cybernetics was this: Communication and control in the animal and the machine.
Cybernetics is neither holist nor reductionist. Rather, it takes the philosophical perspective that the whole can be analysed as a set of components within the context of their organisation. It is that organisation which will account for interactions between components, and the way they in turn affect the system.
One of the most fundamental concepts of cybernetics is its approach to equilibrium and change. Cybernetics takes the position that an entity behaves in a way to keep certain conditions as close to a desired state as possible – an equilibrium – and then seeks to understand the actions required to maintain these conditions. This understanding is also fundamental when applied to a system’s effort to effect change by moving towards a goal (or new equilibrium).
These efforts will be composed of, for example, observing or perceiving, organising observations, comparing these organised observations to the desired state (which is a function of memory) and taking corrective measures should the gap between current and desired state be too large. A further role of the memory may also be to record previous corrective measures used and the context in which they were taken.
The ability of the system – be it the human body or a complex enterprise – to observe, make comparisons and decisions and then be in action is the very essence of ‘steersmanship’ and hence is cybernetic.
As you can see, the implications of cybernetics touch on the most philosophical questions of our work: observation, interpretation, meaning and understanding. They touch upon who we are, where we stand in the face of reality, what decisions we make and how we make them.
In business (and in life) we like to think we make decisions based on our knowledge of a situation, yet cybernetics’ epistemological approach – where the observer and the observed are both seen as parts of the same system – suggests that our perspective, and our behaviour, cannot be separated from the system itself. Cybernetics forces us to consider what the limits to our true knowledge are and we understand that our reality may be nothing more than a self-maintained mental construction to help us get along: A mental model. And as we’ve said before, (and will likely say again!) “all models are wrong. Some are useful.”
Cybernetics puts human perspectives and behaviours at the heart of any attempt to model the complex system of an enterprise. Since humans are capable of developing their own goals and desired states the implication is profound: We can define organizations as being purposeful systems of purposeful components – people. Thus by understanding more about the motivations of the people we will come to know what truly controls the system we desire to shape.
Porter created the idea of businesses having a value chain – ideally designed so as to maximise the efficiency and effectiveness of business processes as understood by the customer.
When we talk about processes we mean the specific ordering of work activities across time and place, with a beginning, an end, and clearly defined inputs and outputs. They are the structure by which a business physically does what is necessary to produce value for its customers.
By mapping out and improving individual processes, and how they worked together as a system, planning and organisation could be facilitated throughout a business. By focusing on common process goals – and the collaboration required where processes span two or more functional lines, the value chain could deliver more value for fewer resources.
Re-engineering was the most comprehensive, far-reaching, enterprise-wide option for process improvement. It was also the most radical. The most prominent proponents of this approach were Hammer and Champy who, in their book ‘Reengineering the Corporation’ stated that managers “must abandon the organizational and operational principles and procedures they are now using and create entirely new ones”.
Their view was that business reengineering meant starting again from scratch, forgetting how work was done as well as understanding that old job titles and old organisational arrangements would cease to matter: How people and companies did things yesterday wouldn’t matter to the business reengineer. They tackled the organisation’s core processes instigating “radical change to achieve quantum process improvement”.
During this time I was a young process consultant, analysing clients’ business processes and assessing the degree to which they satisfied the organisations’ customers. A process focus meant I was less concerned with things like people and technology and although there were associated ‘Hard’ issues (including the tools, techniques and Information Technology available to support the re-engineering effort) and ‘soft’ issues (individual and team behavioural reactions to the instigation of change within the organisation, the management of which spawned further growth within the consultancy industry as ‘Change Management’ shot to the top of every CEO’s agenda) the ethos was that all would flow from the customer and be process-driven as that was the pathway to value creation. Specifications for skills, jobs and even the technology to enable each process would be created and fulfilled as a consequence of the process.
All in all, this process-centric model was a beautifully scientific theory, rational, bursting with logic, and it certainly delivered improvements, but even then I sensed it was missing something fundamental, something intuitive. Maybe the fact that we humans are complex and irrational. Or maybe that in a dynamic context we were moving from one static ‘wrong’ solution to another, static, ‘right’ solution.
The world and the way we look at businesses have since moved on, but I took away a very valuable lesson from this era: All models are wrong, but some are useful.