Organisations and their Environments


organisationenvironmentThe notion of organisations as complex adaptive systems enables us to see more clearly the individual, the teams and the organisation itself within the frame of a larger ‘whole’ and, therefore, to appreciate that in any one given situation there are a multiplicity of variables that may or may not have an impact upon the work to be done. Such variables frequently form the case studies of the McKinsey Quarterly or the Harvard Business Review. Leadership is a particular favourite, Learning and Performance Management is another, Reward and Recognition is a third. Follow the links for more in depth posts on these topics.

As of yet, we are still to define a context – an environment – in which this all can take place. This is not a new debate in itself, but taking it out of the hands of the Real Estate and Operations teams in order to understand it as a potential source of major competitive advantage is a relatively new concept: The idea that it may also provide your organisation with a greater degree of ‘Possibility Space’, resulting not simply in success in the market place but also within the organisational community. Transformation, indeed.

Outside our individual perspective and team perspectives the next cognitive filter is that of the workspace.

The Old (Built) World

Let us cast an eye back through history briefly. The organisations of the past reflected very much the formal societal structure of the time. All too often they were ‘hierarchical monoliths’ where the agenda was set by top management and implemented through the ranks by a series of management levels responsible for ‘controlling’ the organization. Both physically and metaphorically, the top management placed themselves away from the sharp end of their business, straying from the office’s ‘executive suite’ often only when the necessity arose.

Decision-making was seen as the domain of management with little input from others. The workforce was deemed to be motivated largely by money and little else. With the advent of organizational psychologists and sociologists and behavioural scientists in particular, it became more evident that such a rigorous hierarchical approach was an ineffective way of running a business.

The division between management and employee pervaded beyond the physical. It set the whole nature of corporate culture. The self-imposed isolation that management sought proved a huge barrier to collaboration, organizational learning and flexible, adaptive practices. What happened at the top was pervasive throughout the whole of the organisation itself. Often we see that humans are imitating beings: We tend to take on role models and behavioural models that suit our world and conform, so reinforcing non-collaborative, ‘silo-mentality’ behaviour. This is a self-reinforcing loop; a downward spiral of non-information sharing, mis-trust and non-alignment of purposefulness.

It would be good to think this was all in the past, but in reality we do still live in an era when the division between management and employee is the norm. Although corporate cultures increasingly tend to encourage openness and honesty, there is much room for improvement. In fact, the majority of organizations around the globe still conform to this type of monolithical structure. And this type of sectarian workspace design is still prevalent.

The New (Built) World

Perhaps one of the greatest inciting events workplace design was the advent of the ‘information age’: New forms of enterprise emerged, and with them new kinds of workers and new styles of workplace. We were presented with a notion of alternative office spaces containing what seemed like elements of bar culture, primary school, artistic workshops, sound studios and so on, where the cool kids got to play as they worked. For many this was considered a frivolous exercise in an attempt to ‘out-cool’ the competition but others took a more open mind, asking what they could learn from this revolution and how it could benefit their own business, an inquiry that led – for a small minority – to the conclusion that alternative environments may in fact be necessary in order to build and maintain a creative competitive advantage in today’s world.

Other pressures, too, have contributed to the shift towards reconsideration of how our corporate buildings support the work done therein. Technology, in particular, has fuelled this area of debate. Workers are increasingly mobile; the advent of laptops and telecommunications means that teleworking is now a reality; in fact the number of teleworkers worldwide is expected to hit 200 million by 2020 and many knowledge workers rate the ability to telework – at least partially – as a high factor in their employment choices. There are obvious implications of this trend, from a practical reassessment of the building capacity required and how it is used, through to revision of leadership models.

The workspace is possibly the most liberating enabler an organisation has at its fingertips.

Of all the tools an organisation has at hand day in, day out, the work environment is the most prevalent. An organisation may spend millions every year designing, building, implementing or custom-ordering Information Technology systems but fail to see that outside itself – that is the agents of the system – its potentially biggest liability and source of both productivity and efficiency (as architects have been crying out for years) lies with the design of the physical environment in which these agents (co)operate.

Attitudes are changing, slowly, but the connection between the workspace and organisational learning, play, creativity and sustainable innovation is still not always made. One reason for this is because we need to draw on more refined principles and ideas of architecture, a discipline not generally understood by business professionals and one which we will explore in subsequent posts.

The Extraordinary Individual


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In the 1960s, Richard Bolles first asked the question ‘what colo(u)r is your parachute?’ and so began an ongoing conversation about the constraints of traditional job titles and prescribed career paths. As individuals, he stated, we are all responsible for our own destinies depending on how we wish to see them. As Watts Wacker stated:

 “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”.

Dependence versus Interdependence

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?

The Need for a New Perspective


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The world was a very different place in the time that Maslow developed his model (there wasn’t even the internet, for goodness sake – let alone WIFI) and it seems as though the pace of change is accelerating every day. Futurologist Watts Wacker described the context as the ‘500-year-delta’; the ‘age of reason’ we have been living in is passing away whilst what he terms the ‘age of possibility’ is just being born. The age of reason is one of linear understanding, of cause and effect and mechanistic thinking. The age of possibility is one arising out of the increasing complexity in the world – a direct legacy of the technical infrastructure of the industrial revolution and the intricate social arrangements that resulted from it.

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?

The Systemic Perspective: The Complex Whole


The_Systemic_PerspectiveIn my last post I raised the question of reductionism versus holism in modelling the enterprise. So which kind of model is more useful to us, in terms of the reality it represents and our ability to work with it effectively?

One of the starting points for the development of Business Process Models is the use of the context diagram. The purpose of the diagram is to identify and document all entities that have a specific impact upon the process. In defining the ‘impact’ of a process, they are deemed as being either suppliers or customers of the specific process. The context, a static picture, sets the scene for the subsequent breaking down (‘decomposition’) of the process into discrete activities. In decomposing the model, we seek to reduce it to its constituent parts for more detailed analysis and so on.

As an approach, this method is particularly interesting. In creating this determinate view we also find ourselves at the very dichotomy (false or otherwise) of science. In the realm of science we find the reductionists and the holists.

Reductionism is defined as being an attempt or tendency to explain a complex set of facts, entities, phenomena, or structures by another, simpler set: “For the last 400 years science has advanced by reductionism… The idea is that you could understand the world, all of nature, by examining smaller and smaller pieces of it. When assembled, the small pieces would explain the whole”.

Holism, on the other hand, is the theory that living matter or reality is made up of organic or unified wholes that are greater than the simple sum of their parts.

The ‘whole’ refers to what I would call a complex system: “A group of interacting, interrelated, or interdependent elements forming a complex whole”. We can bring this to life by relating how that translates to Complex Adaptive Systems (CAS) we are familiar with such as the human body, natural phenomena like ecology, weather systems and migration patterns, as well as economies and indeed large, complex organisations.

Descriptions of complex systems are determinate and complimentary, entirely dependent upon the observer. Systems move and morph through points of equilibrium as they adapt and self-organise according to their environment or context and, in this sense, control and order is emergent rather than predictable. This makes modelling them a challenge.

The search for defining models of complexity is an inquiry to build fuzzy, multivalent, multi-level and multi-disciplinary representations of reality. When we think about trying to model an enterprise taking a systemic approach, it can feel overwhelming. But remember, holism is not necessarily mutually exclusive from a reductionist approach. The two can be complementary and there are disciplines such as cybernetics that can help us with that.

At Innovation Arts we understand and embrace the complexity in your organisation. Our approaches are designed to help you model your complex systems, and work with these models to rise to whatever challenges to face.

What is a model?


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‘Model’ can mean different things to different people, but in the context of our work, we mean a representation of reality intended to foster understanding.

Human beings use models all the time. Our observations, reflections and interpretations are all about creating mental models. Words themselves are models – a representation of reality. Just as the word apple is not the apple itself, a word, any word, is a concept we understand through agreement. Models provide a basis for conversation.

Friends at the Sente Corporation have put it this way:

“Depending on how you look at it, anything can be a model. Even reality – from one vantage point – is merely our own electro-chemical processing of narrow bandwidths taken from a sea of information”.

Why do we create models? Good models simplify our complex world, enabling us to communicate and appropriate complex ideas, notions, theories, and so on effectively and efficiently. We make our models to a scale where what they represent becomes understandable on an intuitive level. They enable us to develop the comprehension and insight from which we can begin to experiment. And through this, we learn.

In the context of enterprise, models enable us to examine a situation, analyse it and then draw out plans. Many of the concepts we grapple with in today’s organisations are so complex they are beyond the limits of our intuitive comprehension. Through modelling we attempt to strip away these layers of complexity in order for us to understand the context of the enterprise, the components within it and their relationships to each other and the external eco-system.

They do have their limitations. Models are fundamentally ‘reductionist’ in nature and there’s a balance to be struck between making the model sufficiently abstract that it can be understood intuitively whilst avoiding over-simplification. For example, in breaking processes down to constituent parts, the nature of the whole – the systemic dimension of the organisation – is all too often left neglected. The decomposition omits many of the complex interactions around a process, which is just a logical, linear sequence of activities. To document all such interactions would involve a mammoth effort of analysis, so the trick is to find the right mixture of reductionism and ‘holism’ or ‘systems thinking’. Cybernetics helps our understanding too, and I’ll come back to these points in later posts.

There is one fundamental pitfall to avoid when working with models: we must never forget that all our models – be they process maps, mind maps, spread-sheets, stories, physical or conceptual models – are abstractions. Therefore it is vitally important we remain vigilant in revisiting and revising them regularly, cognisant of the fact that, as George Box put it: “All models are wrong. Some models are useful”.

We must learn to be constantly critical and questioning, otherwise the very models we have constructed can be our own downfall as we cling on to them, attached to the comfort of a reality we perceive that may not, in fact, be appropriate. The only way of achieving a shift in our own perspective is through conversation. An intervention in our self-perpetuating thought processes can – if we are open to it – change our view of the world. Or our business.

At Innovation Arts, when we work with clients facing complex issues, we apply a rigorous approach to modelling. Dialogue and iteration are key to our approach, both during the Architecting and Building phases of solution design, but also when the new model is put to Use.

Modelling the Enterprise


Modelling_The-_EnterpriseWhenever we examine an enterprise with a view to addressing issues, seeking efficiencies or assessing the impact of change, we need a model of the business that is simple enough for us to understand, but accurate enough to be useful.

I’ve mentioned previously that I have a background in strategy consulting – transformation in particular. On many occasions, preparing a client business case would depend on mapping out the current reality and the proposed new way of doing things. Understanding the current state – or “As-Is” model would be vital as a baseline for the projected cost savings and added-value delivered to the customer in the future-state model known as the “To-Be”.

But where to start? For a functional viewpoint, Org Charts tell us who does what, where the reporting lines are and – in theory – who has what power in the organisation. In theory… We’ll come back to this in another post. And what about the process side of things?

You’ll have heard of time and motion studies. F.W. Taylor is linked to the ‘time’ component of these studies, but it is another ‘guru’, Frank Gilbreth, the father of ‘motion studies’ whose work interests us here. Almost a century ago now, he presented his ideas on how to describe processes. Gilbreth’s process chart – a device for visualizing a process as a means of improving itwas concerned with finding ‘the one best way to do work’:

 Notably, Gilbreth specified:

“Process-chart notes and information should be collected and set down in sketch form by a highly intelligent man… who need not necessarily have been previously familiar with the actual details of the process…To overcome the obstacles due to habit, worship of tradition and prejudice, the more intelligence shown by the process-chart recorder, the sooner the hearty cooperation of all concerned would be secured.”

So not only had the concept of process modelling been born, but so, too, it would seem, had the external expert with no prior knowledge of what he (almost certainly in those days) was looking at.

This poses an interesting question. Is it true that people outside your business should be the ones to model your future?

I believe there are some elements of truth in that supposition, but there is also something fundamentally flawed. Yes, external, impartial partners can see things about your business that have become so ingrained as to be invisible, and yes, they can cut through the politics of decision making. But at Innovation Arts we do not believe that the intelligence of those partners is the critical factor. Rather, it is harnessing the intelligence, knowledge, expertise and energy that already exist in your organisation, to create meaningful, insightful models of the current and future states, which go well beyond Organograms and process maps.

Enterprises as Processes


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The 1990s were the height of the business process re-engineering era. Thanks to ‘guru’ Michael Porter, who in the 1980s had suggested a framework for achieving ‘competitive advantage’, consulting firms were doing a booming trade helping organisations reflect on how they did, and helping them transform their ways.

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.

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