Nor Do I think highly of personnel development, the type supplied by HR. Four reasons for this:
There is too much coaching and personnel development going on in many companies. People are tired of trainers or consultants preaching
In other companies, there is too little of coaching and personnel development going on to make a significant difference to anything
Even worse: There is no right amount of coaching or personnel development so long as it’s primary use is to make people fit to a rather sick system that systematically disenfranchises people
There fore and worst of all, neither coaching nor personnel development are producing decisive results. They never have
Coaching and personnel development are these days all too often just feel-good riffs of pop-culture themes: Mindfulness, Teaming and Participation, Self- Efficacy, Vulnerability, Experimentation, Failure Tolerance, Innovation, Reflection, Empathy, Agility – you name it. While each of those themes is worthwhile, they are colliding with organizational systems that let good insights wither and die – systematically. After all, systems change people way more than people can change systems.
Of course, there is bad and good coaching or personnel development. That is not the point. The point is that any initiative that is based on transforming individuals without changing organizational systems is futile. Organizations must be changed in ways that allow people to express themselves in novel, better ways. To preach to them values and behaviors that run against the grain of the values and behaviors enticed by the organizational system itself is like sending them on an exhaustive upstream swim – often against swift currents and in cold water.
Coaching and personnel development are all too often just excuses to avoid tackling the underlying problems of companies:
The systems of work we use are largely not supportive to human values
As long as coercion and enticement remain the main methods to align people’s actions with companies’ targets, people will systematically choose to withdraw into their shells. They will never bring the best version of themselves to work
Hierarchies are extremist ways of regulating power. If aliens would land on earth and aim to subjugate humanity to a single will, they will use the hierarchy to achieve control. Of all the many ways to distribute power between people, the hierarchy is the most centralized and extreme one
Therefore, we need new systems of human collaboration. Don’t take it from me, take it from Management professors and successful entrepreneurs like Peter Drucker, Edward Deming, Gary Hamel, Frederick Laloux, Issac Geetz, Henry Mintzberg, Zhang Ruimin, Ray Dalio, to name a few (more can be found in the Corporate Rebels Bucket List).
In my book “Liberated Companies” I argue that we need to build these systems on four criteria:
Reduce power differentials: A decrease in the power differentials between people to levels that are much more in sync to human flourishing – and that hold power to account much more than common now.
Invite technology in: Organizing companies in a way that invites creative problem solving into the organization and is therefore much more compatible with the needs of technological progress.
Provide creative tension systematically: Increase psychological safety for people while holding people accountable for results in a more effective manner than ever before.
Re-align sensemaking of economic activity with planetary needs: In our time, it will be more and more difficult for companies to turn a blind eye to the escalating ecological and human catastrophe caused to no small part by the deeds of today’s companies.
Coaching and personnel development are so often used as just another tool to make people fit to company system that is way past their prime and in urgent need of a major update itself.
“Liberated Companies – How to Create Vibrant Organizations in the Digital Age” will be published at the end of this month. The book begins with turning a question that many company leaders ask on it’s head:
It’s not what technology can do for a company – it’s what companies can do to no longer stand in the way of technology.
So, you tell me that you are taking your company digital? I want to hear your idea of technology, not that you introduced this or that app… – Paraphrased from Friedrich Nietzsche, Thus Spoke Zarathustra (1891)
To devise an organizational design that works well in a world increasingly dominated by technology, one has to understand two things. First, we must grasp the essence of technological progress, the direction in which it is leading us—in short, we must understand the “wants” of technology. Second, as technology and humans become ever more closely intertwined, we must ask: how do humans and technology flourish together? Let’s save the first question for later and answer the second question first.
A hammer, a coffee machine, or a smartphone app is a tool, a technology that we are using. Humans use these tools to manipulate the world around them, to get results. Natural problem-solvers that we are, we look around for the best tool to assist our efforts. If the tool is available, we simply need the skill to use it, and our lives will be easier. The basic thinking of many people in business is similar: tools help to solve problems. All we need to do is to make a tool available to workers and train them how to use it.
But is this really true? Of course not. For as long as technology has existed, the relationship between tools and people has never been a one-way street. Humans invented and used tools, and their use shaped human culture. No technology was ever inconsequential to human mindsets, values, social systems, even the rise and fall of empires. Anthropologists even divide cultures according to their tools: Stone Age, Bronze Age, Iron Age, Age of the Sail, and Information Age, to name a few. The impact of tools doesn’t have to be as dramatic as gunpowder or printing; even the inconspicuous coffee machine intervenes in the way we structure our day, determines where and when we gather, takes up a prominent place in our homes, changes our biological mode of operation by drugging us slightly, and sends many of us into fits of rage when dysfunctional.
Tools have shaped us into what we are today. There is every reason to believe that with ever more technology available, the more and more we are shaped by it. As Marshall McLuhan is often attributed to have said, “We shape our tools and thereafter tools shape us.”
Even more true: technology as a maker of decisions
People in companies have already lost control over many things they used to do. In the information age, companies have delegated many tasks to complex systems, be it in production, distribution, accounting, or sales. These systems are so complex that no single person knows what the systems are really doing. Even teams of experts often struggle to make sense of the sheer complexity of modern systems—a fact that is clearly visible in the high failure rates of modern software projects. Humans have set up these systems, but are they fully in control? Are they making the decisions? Our control is limited by design because we want the machines to take over our work, to automate much of what is happening. The algorithms humans have set up mesh with other algorithms to produce the outcomes that we want, and we tend to understand less and less of their inner workings and true complexity. Still, we choose to rely on them out of necessity.
How much will we be in control tomorrow? Certainly less, as artificial intelligence becomes more pervasive in the workplace. The more we utilize technology, the more that technology will make decisions for us: today, it simple deterministic decisions, those that can be easily automated; tomorrow, more complex decisions, those requiring judgment. Without experts to act as translators between business and technology—be they engineers or highly specialized functional experts in logistics and accounting, for instance—modern businesses could not exist today. Yet even experts are limited in their ability to control, as it takes five things to be in control of complex systems.
This is a five-point recipe for making solid decisions about complex matters. The better an organization is able to apply this recipe, the more it will prosper. The trouble is that hierarchical companies find it hard to apply this recipe effectively, for the following reasons:
Major power differentials between people are systematically detrimental to making sense of complex systems, and this defect has grave consequences. As technology becomes increasingly complex and important for the survival of companies, conventional hierarchical companies will be less and less able to benefit from technology.
New truth: technology as a co-worker
As Kevin Kelly mentions in his book, What Technology Wants, “technology is an independent force in itself. Nobody is in control now and humanity will be less in control tomorrow. The technium is already whispering to itself.”
Today, most companies are already so complex that decisions are made by a mixture of humans and machines. In companies like Amazon, Google, Netflix, and Facebook, most day-to-day business decisions are made by algorithms in real-time. Have you ever tried to talk to their “customer service people”? Overwhelmingly, the product itself, in the form of some specialized algorithm, is in charge of customer interactions—and those algorithms are doing their job extremely well. Much better than the customer service peoples of cable or telecom companies usually do.
People inside technologically advanced companies tend to work more on maintaining and experimenting with algorithms. The algorithm becomes a co-worker—one that is extremely skilled in specific functions. Humans specialize in those things that they are more adept at, such as the holistic perception of contexts and setting purposeful directions. AI researchers have concluded that humans in the digital age will be an asset to any company, as they supply a certain form of specialized intelligence. Supplemented by all the multiple forms of intelligence that AI has to offer, the human-algorithm team can achieve much more than either can alone. Take chess, for example. There is no human on earth today who is able to beat modern chess programs. However, in tournaments where humans are allowed to play assisted by AI, the combination of human and machine tends to beat AI that is not supported by humans. There may, of course, come a point in the future when human interference in chess AI will no longer increase but may actually impair performance, but business is much more complex than chess—its rules are much more fluid, and its streams of information are much more ambiguous. In the context of businesses, human intelligence and machine intelligence are likely to have a productive relationship for a longer period. If humans and machines are more and more equal co-workers, the companies that benefit will be those that manage to create a work environment that fosters this cooperation.
Today, we work and live with companies that are a reaction to the challenges of the industrial age, and the work-environment design that best suited industrial technologies was bureaucracy. Bureaucracy replaced charismatic domination with legal domination, replaced haphazard arrangements with standardized processes and a clear hierarchical way of making decisions that was focused on analytics, efficiency, consistent outputs, and reduction of waste. At the time of its invention, bureaucracy was considered an antidote to bad management. Max Weber, a German sociologist credited with “inventing” bureaucracy, wrote in 1922 that “organizations are shaped by the relentless march of technological and managerial reality.”
Today we face the relentless march of the algorithm. There is so much benefit inherent in algorithms that we adapt our beliefs, behaviors, values, and social norms) to them, personally, socially, and in companies. According to Max Weber, technology puts us in an “iron cage”: we are defined by technology and will be redefined every time technology changes. In the industrial revolution, the “iron cage” trapped individuals in systems of efficiency, rational analysis, top-down control, and digressional power. Now, with the rise of dematerialized digital technologies and artificial intelligence, we feel the need to adapt our ways once again in order to catch up with technology.
If technology is rapidly evolving and technologies are quickly becoming obsolete, today’s challenge for humanity is not to align itself to any single new technology, but rather to find a method to keep evolving its cooperation with technology continuously and forever. Companies need a work design that is so sensitive and adaptable that technological and social innovation at the workplace occurs naturally and permanently. It is not enough to understand individual technologies: the internet of things, social media, 3D printing, virtual reality, block-chain, self-driving cars, big data, cloud systems, or AI, to name a few emergent technologies of the last decade alone. To overcome the challenge of building a design for human, social, and technological cooperation that is able to flourish in ever more technologically driven times, we need to understand what technology wants and how a company can serve these needs best.
Company leaders often ask: What does our company want from technology? How can technology help our company to be more competitive? To answer these questions, companies engage in all kinds of futuristic ideation workshops, creative sessions, company visits, and pilgrimages to Silicon Valley or coastal China. They declare success if they have identified or implemented or invested in this technology or that start-up. This is naïve.
The really important question to ask is: What does technology want from companies? This is an unusual question. Can technology “want” something? There are some thinkers, like Ray Kurzweil, who predict that a “singularity” will occur around 2045—a point where machines become sentient to such an extent that they will be able to self-construct. A point where the power of the kingdom of technology outstrips the power of the kingdom of biology, to which we humans belong. That point will be a point of no return for the human race—a singularity.
The chances are high that technology will become more independent in the future. Machines are becoming sentient in unexpected ways—it may not be that machines will trump the general versatility of biological human intelligence in the coming years, but machines are already coming up with alien forms of intelligence that make them superior for many specific applications. Recommendation engines determine what we buy, filter algorithms determine how we perceive reality, navigation apps shape the way we experience geography. The sheer numbers of proliferating specialized forms of intelligences are replacing more and more areas where our generalist human intelligence once reigned. Over time, the area where we use our human intelligence will become increasingly focused. This process has already begun.
What I am getting at here is something else. We know from systems theory that complex systems develop emergent properties, which are behaviors that are revealed on an aggregate level but cannot be observed in any single component of the system. The system of biology, as an example, always moves towards greater specialization of species in a process of evolution determined by its inherent characteristics. The biochemical algorithms surrounding DNA shape the trajectory of biology, pointing toward what biology wants.
The system of technology can be visualized in the same way. Instead of biochemical realities, technology is based on the physical and mathematical realities that the world is made of. The laws of physics and mathematics are the algorithms that technology uses to progress. At first, that may sound outlandish. After all, if my computer bothers me, I can cut its power supply. But I can’t unplug the whole system of technology, everything that surrounds us and that is manmade. No one can unplug the internet. And the more the internet of things becomes a reality, the less it will be possible to disconnect physical reality from virtual reality.
More shocking and significant is that we do not want to unplug technology because we are already a part of it. The American author Kevin Kelly, who is known as the philosopher of Silicon Valley, has devoted most of his adult life to thinking and writing about technology. Kelly uses his own definition of technology, the Technium, which he defines as “the accumulation of stuff, lore, practices, traditions, and of choices that allow an individual human to generate and participate in a greater number of ideas.”
The Technium is made up of technology and humans. Our current culture still holds onto a human-centric view of the universe—a view that puts the rational human mind in control of technology. But in academia it is generally accepted today that no human, no institution, absolutely no one is in control of technology. Technology is an independent force that worms its way forward as a result of technical, social, political, psychological and commercial forces. It is a system that has inert wants, just as biological evolution has. The wants of technology have been making themselves felt for decades and can only become more prominent over time, especially after artificial intelligence becomes sentient.
Today, many companies are lumbering slowly along the technological highway, only to be smashed by Amazon, smashed by Airbnb, smashed by Netflix, smashed by online pure-plays with their data and algorithms. It can be argued that these major successful companies today do not stand in the way of technology but are simply traveling on the same trajectory as technology. What if we could find a way of organizing a company where the use of technology proliferates naturally? Where the technological, social, and commercial spheres establish self-reinforcing feedback loops and evolve together? That company would be on the same trajectory as technology—and it would be a very powerful design for a company indeed.
To sketch a work design of the future, more is needed than just looking at today’s technologies; sn understanding of the inner workings of technology as a whole is required. So, what does technology want? Kevin Kelly has discerned a number of directions that technology works towards that together make up what he terms the “trajectory of technology” (Table 1). Let’s go through this list and consider its implications for the work design of a company.
Technology wants efficiency
Technology loves efficiency. The more efficient a technology gets, the more it begets other technologies. Take electric cars, for example, which only became a mass-market option with more efficient batteries. Or virtual reality, which was invented in 1989 but became viable only when high-resolution smartphone screens became cheaply available in the 2010s.
Humans are in love with efficiency, too. Efficiency has been our faithful companion since the industrial revolution, and it won’t leave us now that we have passed into the digital age. Efficiency is clarity; it is rational and comforting in a world of uncertainty. Efficiency gives us a problem to solve. Dealing with the brother of efficiency—effectiveness—is much more tedious. Effectiveness, which is about choosing what to do rather than how to do it, comes with too many options and is less rationally computable for us than efficiency. It is not only humans’ laziness that lets us seek efficiency; it is technology itself that seeks efficiency. The quest for ever more efficient solutions is one we share with technology. Companies will continue to seek efficiency today and tomorrow. The change is that there will be much more potential to find efficiencies as technology has more and more to offer over time. Therefore, the way work is done in companies—their “work design,” a term we will use extensively throughout this book—needs to adapt more and more often. Organizing must become more of a process of evolution and less of an incremental exercise.
Technology wants opportunity
Over time, technologies offer more and more opportunities to do things differently. The Amazon bookstore begot the Amazon marketplace, which begot Amazon Prime, Kindle Unlimited, and Amazon Dash, which begot Amazon Web Services, and so on. The peer-to-peer file-sharing technology underpinning Napster begot the streaming mediums of Youtube, Netflix, and Spotify, which begot advanced artificial intelligence used for recommendations, which begot social collaboration on videos and music with friends. Youtube, Netflix, and Spotify in turn became possible because of cloud technologies such as those offered by Amazon Web Services, Google Cloud, and similar cloud services that offered server capacity on demand.
As options for technologies to progress increases, so too does the number of options companies have for solving problems. This is increasingly true not only for the design of products but also for the way companies do their internal work. In the 1990s, companies grew a nervous system for the processing of information, called enterprise resource planning (ERP) systems, in the form of packages like SAP or Oracle. These core systems contributed a great deal to a company’s ability to go global and outsource work. Today, web technology has joined ERP systems as the backbone of internal and external collaboration, enabling real-time business and new forms of combining humans and algorithms into new creative solutions.
As we discussed earlier, humans are problem-solvers. Companies are always desperate for better solutions, and technology provides them. An organizational design that is to stand the test of the technological tsunami must ensure that people are aware of the solutions technology has to offer. The need for more opportunity is the same for technology, for companies, and for people: they all want more opportunities. It is up to the work design of a company to transform opportunity into benefits. If people feel encouraged to be on the lookout for new opportunities, can conduct experiments without fear of failure, and have the autonomy to decide on their own to include this or that technology in their daily work, the needs of technology and companies will be aligned.
Technology wants diversity and specialization
One technology begets another, but no technology will ever go away. They stick with us as part of the Technium, forever offering an option of how to do things. Even once-obsolete technologies may be rediscovered and suddenly become attractive again if they are combined with new technologies. The Technium never forgets.
More than that, technologies come in multiple variants. For example, they change form according to their area of application. Google’s search algorithms are both similar and different for searching pictures, videos, geographies, or medical scans. They are similar to and different from filter algorithms used by Facebook, Tinder, or Amazon. Every technology is adapted to the specifics of a situation and becomes ever more specialized, thereby increasing diversity.
The more diverse and specialized the technologies on offer are, the more decentralized and varied a company must become to make good use of the richness of the technological environment—more varied than can be supported by company hierarchies, which are designed to suppress variance, as we shall see in Chapter 2: The Corrosive Impact of Power Differentials.
Technology wants complexity
Technology is one of the main reasons why doing business is becoming more and more complex. Companies must organize themselves in such a way as to handle this complexity, but ever-increasing complexity cannot be controlled; it can only be worked with. Failures will be unavoidable, but research has shown that competent people who are in close proximity with technology, and who are authorized to make decisions, can prevent failures from becoming disasters. Two proven methods to increase a company’s ability to handle complexity are to let the people who are closest to the problem make the decisions, and to ensure that they are competent. Give them competence and freedom, then trust them to act.
Technology wants emergence and sentience
Handling the increasing complexity caused by technology is difficult—so we use technology to stay on top of it. Intelligent agents that keep technologies in check are already at work in every smartphone, every computer center, in cloud systems, in medical systems, or in routing algorithms at call centers. Companies specialized in this field are mostly hidden from public view but are worth billions of dollars. Take ServiceNow, a company that came from nothing in 2014 and is now valued at US$50 billion in 2019. Their business model is to provide companies with the capability to stay on top of their sprawling IT operations, no matter whether the workers are humans or machines.
Technology will increasingly be running itself in the coming years. Indeed, it has already taken on a life of its own, and determining where sentience starts is an open-ended debate. Some think it starts with intelligent, self-organizing behavior that apparently works but that we are unable to fully understand. We will be using more and more algorithms and intelligent assistants over time. Kelly and others predict that the benefits we are able to give to our organizations will crucially depend upon our ability to collaborate with machines. A work design for the digital age must provide an environment where people can get acquainted with their new technological companions and quickly adapt to the fast pace of change.
Technology wants ubiquity and freedom
Technologies, even dangerous ones, spread no matter what we do. There is no way to control the very real problem of nuclear proliferation, for instance, but there are less dramatic examples. The so-called “washing nuts”—the fruits of the Sapindus saponaria—have been used by local communities in India for thousands of years, but they recently became popular in Western households seeking more sustainable ways of cleaning fabric. Demand for them caused prices to rise so much that Indian communities were forced to switch to “modern” washing powder. Any technology, old or new, spreads.
Companies align themselves with technologies’ desire for ubiquity by making it easy for technologies to both enter and flow forth from the company: they pull in technology by making it easy for people or units to observe and adapt whatever technology other people, units, or companies are using, and they also let technologies travel from the inside to the outside. Why should a company share its technologies with the outside? The more technologies change, the less a single technology represents a competitive advantage for any prolonged period. Technologies become stale if they are cut off from contact with the outside world; if outside observers cannot scrutinize a technology, if insiders cannot freely discuss its merits and opportunities, its full potential benefits will fail to develop. There will still be a case for secrecy in areas where technological progress is not fast—such as preserving the recipe for a vintage drink like Coca Cola—but in most other cases, openness and the freedom for technology to spread in all directions is a better choice. More and more options become available to an organization that is open to the spread of technology. Freedom begets options begets progress.
It takes an open organization to let technology proliferate. The primary mechanism for this is to make it easy for people at all levels to take a break from their close colleagues and explore other technologies “out there,” then come back and synthesize their findings at home.
Technology wants mutualism and structure
Technologies build (and rely) upon each other. A car’s navigation, parking, and voice control systems rely on its electrical systems, which in turn rely on the car’s mechanical systems. Technologies are mutually dependent, and the more advanced the technology, the more dependent it is.
However, there are two traits that a successful technology—one that spreads—must show. First, it must be reliable. Those technologies prone to breakage are unlikely to spawn new technologies or combine with other technologies to form more complex solutions. Second, its structure must be easy for those interacting with it to understand. Today’s phone apps, for example, are only so ubiquitous because they are built on very stable operating systems (ioS, Android) and developers can access the published library of Application Programmable Interfaces (APIs) released by Apple or Google. Another, more low-tech example is the way that a light bulb interacts with the electrical grid. It can only do its job because it can rely on a stable grid with well-described properties and because its socket conforms to mechanical norms.
In the digital age, work designs need to be geared towards creating combinations of human and technological activity. Therefore, they must cater to experimentation, playfulness, and local variation while still providing a high level of reliability.
Technology wants evolvability and beauty
The result of all of the above is that technology will necessarily evolve. Becoming both ever more efficient and increasingly complex, it will create more opportunities, greater diversity, and more specialized uses. It will show more forms of sentient behavior, will increase freedom, and will rely on and be relied upon by other stable, structured technologies.
Kelly argues that technological evolution and biological evolution are very similar. The specialization of species, the striving of all life forms to become ubiquitous, and the ever-increasing complexity of biological systems is not unlike the process of technological evolution that we have been exploring. The biggest difference between these two types of evolution is that biological evolution is much, much slower. Biological evolution is bound by the realm of biochemistry and scarce resources. Technological evolution is not bound by any material constraints; it is only limited by the laws of physics and mathematics. Technological evolution happens in a realm of abundance; biological evolution happens in a realm of scarcity.
The implications are quite shocking. There is no way that technological evolution will not outpace biological evolution. That means that humans will need to cut loose from their biological origins and humanity will need to come to grips with artificial forms of intelligence that will become ever-more superior. Humans and technology are players on the same team, however. It’s likely that they will become closer and closer entwined. In humanity’s fight to gain dominance over nature and biology, technology has always been our greatest ally.
Of course, with the limits of our planet so clearly visible, the time has come for us to stop fighting with biology. After all, we are biological creatures, and continuing to fight against biology is likely to get us all killed. It is time to change our ways through a better understanding of holistic ecosystems. Technology can be our ally if we stop using it to overpower biological systems.
How can a company align itself with a trajectory of technology that calls for continual evolution? The answer is simple: it needs to evolve, too. However, evolution is something totally different than the typical corporate transformation programs of today. A traditional change program follows a number of steps: (1) decide on a vision for the company; (2) assess the status quo; (3) determine the delta between vision and status quo; (4) create an implementation plan; and (5) execute this plan, which usually requires people to be trained, processes and systems to be established, and accountabilities restructured. Five years on, however, the company usually ends up with an outdated vision, implementation that has become bogged down, and a general sense of disillusionment. The classic change program, though rational and controllable, is a relic of the industrial age. It has four fundamental flaws that render it obsolete in the digital age:
1 Reliance on prediction. It assumes that the future can be predicted.
2 Assumption of no important unknowns. It assumes that this vision can be broken down through a rational process into an implementation plan.
3 Assumption of rational agents. It assumes that people at the top have the objective ability to sense what’s needed for both vision and implementation.
4 Assumption of relative stability. It assumes a period of stability after the change has been made so that all implementation costs can be recouped.
An evolutionary work design is quite different. It rests on the following four assumptions: 
1 Reliance on mental models: Multiple predictions are great for building mental models that prepare for the possibilities that the future holds.
2 Assumption of fundamental learnings. There are very important things to learn that we are not even aware of. A high-level yet meaningful organizational mission is enough to give direction to the evolution of a company. Visions become more like forecasts, repeated along the way, and less like directions.
3 Assumption of collective intelligence. Individual actors are even better if they support themselves. A company’s work design must be open and transparent so everyone can sense technological, market, or customer needs.
4 Assumption of fluidity. The future consists both of stability and change of any magnitude. We don’t know how long stability will last, nor do we know how fundamental a change will be. But we do know that we need to be prepared.
Biological evolution brings to life highly complex things that humans often call beautiful: zebras and giraffes on the savannah, a flock of geese in flight, meadows filled with flowers. In the same sense, technological evolution brings about beautiful things through its evolutionary drive: virtual worlds, beautiful tableware, sleek cars. The chances are that organizational evolution will bring about companies that we experience as beautiful, too. Places where people are free to invent, to heed their inner calling, to look after others, to contribute to the world with less fear of oppression.
As a very earth-bound North German, I need to add a caveat here. Evolution brings about many highly specialized things that we do not classify as beautiful: cockroaches, bed bugs, intestinal worms. There will also be ugly, exploitative organizations. However, organizational evolution will make sure that the safari will be much more colorful than ever before.
*** That concludes this excerpt of “Liberated Companies”. If you enjoyed it, consider signing up to this blog to stay connected.
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Are you tired of hearing about Agile, New Work, Lean, and Design Thinking?
Did you already experience how the marvelous values inherent to those approaches have been hijacked and corrupted into just another wave of corporate gimmickry?
Do you wonder how your company or team will ever be able to solve its problems more creatively and spirited?
Companies need an update. The way we run most companies today is detrimental on so many levels. It’s neither well-performing nor allowing technology and humans to flourish. Yet there are progressive organizations that show that through distributing power more evenly, we can make the workplace much better than ever before. This book shows how.
How to enable people to prosper alongside technology is all-important for any modern organization. The more technology inundates our lives, the more humans must be at the center of organizational design. They are the only ones that can make sense of its vast and ever-increasing possibilities. In current companies, people are rarely able to flourish. There is no sidestepping the issue that arbitrary power undermines people’s initiative, performance, and personal development. In the digital age, we need to find new mechanisms for sharing power to make everyone in an organization more powerful – without distributing power so much that companies become indecisive and unfocused.
This book offers a practical method for running companies ‒ using progressive work designs ‒ that is much better attuned to the digital age as well as to human needs. #liberatedcompanies
Liberated Companies is a business book for people at all levels who are looking for better ways of working yet find it hard to determine what precisely these better ways are. Much has been said and written about digitalization, the agile company, New Work, and the need for more self-management, yet almost everyone struggles to make sense of it all. So many good ideas, so much corporate gimmickry. Most people are uncertain about what’s really important and what really works.
Liberated Companies is a book about management in the age of digitalization. It provides orientation to master the ever-increasing complexity of the business world by showing that human collaboration is more actively malleable than we are accustomed to think or believe. By using and evolving work design configurations, ways of collaborating with one another, we can work ourselves and our organizations into new behaviors and mindsets. The book can be a travel companion on that journey. It provides a map and a compass for those seeking to navigate their company or their team to better human and economic outcomes for everyone in business and society.
This book helps readers to:
Design their organizations, companies, and teams much more actively than ever before.
Know what makes really matters for them and their organizations and what can be safely ignored.
Map and navigate their organizations’ journey through the digital age.
Lead their organizations with purpose, efficiency, and humanity
Appreciate, realize, and support everyone’s human potential much better.
Manage in a way much more attuned to the needs of technology and of people.
Because the book:
Makes the fallacies of hierarchical, empowered and self-managed models of working clear
Maps the complex territory of organizations in a unique representation of management practice, the “Liberated Company Map.”
Distinguishes, based on the situation of a company, those work designs that are most applicable for it out of a library of about 200 work designs
Provides a compass to the organizational journey, the “11 Principles of Liberated Companies.”
Delivers great examples by describing the configurations of work designs of one traditional and three leading progressive companies.
Frank Thun has helped organizations around the globe to digitalize their operations as a Project manager, CIO, COO, and Coach. He studied Economics at the Universities of Kiel, Germany, and Glasgow, Scotland, and holds a Masters Degree in Economics. He worked for start-ups and companies like Daimler, Volkswagen, Capgemini Ernst & Young, General Electrics, Nokia Networks, Bayer, Philips, Schneider Electric and Invensys.
I spend my lifetime looking for better ways to run teams and organizations. This is my attempt for a comprehensive answer. I hope you will find it useful.
“Liberated Companies- How to Create Vibrant Organizations in the Digital Age“, 380 pages, will be available in hardcover and e-book worldwide in the second half of November.
Sign-up to www.liberated.company to stay in touch AND spread the word – every tweet and post helps.
New Work and Agile always seem to imply that you need to mellow. It pitches the evil organizational hierarchy against the inventive, social human individual. Like it’s a matter of picking a position on a scale between despotic hierarchy and an egalitarian self-managed organization.
Given the abundance of oppresive hierarchies and bad bosses – attested by the fact that only about 12-15% of people declare themselves truely engaged at work the give people more say in organisations is very understandable. But it is wrong in a critical aspect.
Agile and New Work seems to imply to transfer power from managers to the people, through more participation, empowerment, more transparency and devolution of decision making to individuals and groups. Like power is a zero-sum game: Either managers have it or coworkers have it.
Here comes the snag:
Power is not a zero-sum game. Just transferring it from managers to people might make coworkers more powerful, to ease the weight of oppression from their shoulders, but might not change anything about the power of the organization. #liberatedcompany
More self-management is certainly better for the creativity, engagement, learning, experimentation and growth of people but it has its own defects: Indecisiveness, political behaviors, lack of strategic behavior of the overall organization, diffusion of organizational focus.
A simple transfer of power from the hierarchy to the people doesn’t help much. It just trades one set of limitations for another. Granted, these are other limitations, which might be helpful for some organizations, seeking, for example more creativity and willing to sacrifice focus. However, organizations can do better, much better.
What if it is possible to increase the power of an organization while simultaneously increasing the power of the people? Welcome to the Liberated Company. #liberatedcompany
Let me explain. The power of an organization is the higher, the more it is able to focus all its resources, behaviors, processes, systems on its targets and re-focus them with lightning speed to market or strategic needs. This is a bit like having a Steven Jobs at the helm, who used Apples resources by laser focus and strategic foresight. However, a powerful organization is more than about having a powerful leader, it’s about having extremely powerful bureaucratic processes at work, in all or most parts of the organization: Logistics, HR, Sales, Purchasing, Manufacturing, Finance etc.
The other, largely independent dimension is the power of the people. It is the higher, the more people are able to express themselves, are able and willing to speak up freely, are able to experiment and pick their work according to their intrinsic drives.
Where most people go wrong is to think that powerful organizations invariably suppress people. While there are despotic organizations, where fear is the dominant feeling inundating the organization, there are other organizations that have extremely able, powerful organizations and at the same time are a place where people can freely flourish, in all the many ways they chose to.
Healthy companies only exist in a narrow corridor, that allow for both, a powerful organization and powerful co-workers at any level.
Extremely powerful organizations are always struggling to keep in the narrow corridor. If they increase the power of the organization too much, for example by tolerating despotic managers or overbearing bureaucracies, people will retreat into their inner self’s and go into survival mode. Any increase in organizational power needs to be flanked by an increase in power by the people. Two examples might help to understand this concept.
Take the introduction of new work processes. It is no secret that work processes, however brilliantly designed, are likely to fail if people at work level do not feel the need for them. To push processes on people will just lead to people circumventing them. People don’t like change – they dislike being changed.
Or think about a company deciding to pivot to a new strategic direction. Many companies arrange “change programs to roll-out a new strategy to get buy in of people”. Like a recruiting officer skimming the streets of London to enroll new army recruits in the Victorian Age. Companies engaging with people after all important decisions have been made, will likely end up with outward compliance and inward apathy or resignation.
The fact is: Organizations can only be truly powerful, if they have both: Powerful, bureaucratic institutions delivering great services to customers and employees efficiently AND powerful coworkers, who have a real say in the company, are highly motivated to speak up and communicate their true attentions. #liberatedcompany
On the other hands, if organizations increase the power of people too much, neglecting the focusing capabilities of the organizational bureaucracy, they end up with a social collective of people that engage in all kinds of political behaviors, which are not necessarily helpful for a company’s mission.
It is a matter of balance. The corridor in the middle is where what I call Liberated Companies exist. Hugely successful companies like Haier, world’s leading manufacturer of household appliances, Bridgewater, world’s most succcessful hedgefund or Buurtzorg, a trailblazing care company – just to name a few.
Liberated Companies manage to turn on the power of their central institutions while simultaneously enable coworkers to flourish. #liberatedcompany
Because they ignore power. Take the Agile Manifesto:
Individuals and interactions > processes and tools
Working software > comprehensive documentation
Customer collaboration > contract negotiation
Responding to change > following a plan
There is nothing in there about power.
Or take the main underlying of one of the main expressions of Agile, Scrum. It’s main six underlying principles are iteration, self-management, empirics, collaboration, value, and time boxing. Only one of these, self-management, is about power but merely on team level. It ignores the power dynamics that teams are subjected to in organizations. Yes, there are approaches to scale Agile to multiteam level, namely LeSS, SaFEE and Nexus, but these approaches are nothing more than prescriptions for multi-project management.
It speaks volumes that Scrum, which for many is the epitome of Agile, strangely ignores the first line of the Agile Manifesto.
How on earth can one put individuals and interactions over processes and tools and at the same time slavishly obey SCRUM processes?
A silly, obvious contradiction. But that is the state of Agile. It becomes more and more captured by the powers in charge as just another set of management processes which are to be adhered to. Most companies “upgrade” their project management processes from waterfall to agile by replacing one set of processes and measurements with another. Still, the operating system that these processes are running on remains the same, the organizational hierarchy.
In a conventional organizational hierarchy Agile is an impossibility at any level above the team:
Processes > Interactions:
Control > Results
Adherence to your manager > Collaboration
Execution of a plan > Sensing & Evolving
A hierarchy expects adherence and submission. It is basically built on control. Individuals and interactions are secondary concerns.
There is just no way you can scale Agile in purely hierarchical organizations. Instead we need an update not of this or that process, but on the underlying operating system that agile runs on, the hierarchy.
As Nobel prize winner Elinor Ostrom and many others have shown, there are many more alternative models of governing. These are not even new, we just got to rediscover them. We are better equipped in bringing to live these new, progressive organizations than ever before in history: Digital Technologies and the transparency they offer, enable forms of human collaboration, that are much closer to the needs of organizations, people and technological progress itself.
We are more than ever before in human history able, ready and in need of new ways of collaborating with one another.
If you like to learn more, sign-up for “Liberated Companies”. You will receive regular updates my upcoming book about configuring progressive organizations.
It is strange. On the one hand most companies seem to be all alike and not so much different from one another at all: Hierarchical beasts that employ the classical work designs of Feedback, Delegation, Status Meetings, Protocols, Policies, Orders, Rewards, Appraisals etc. to get things done.
On the other hand there are more progressive companies like Google, Buurtzorg, Amazon, Haier, Netflix or Bridgewater that utilize some “leading edge” work design such as OKR’s, Self-Managed Teams, 6 Page memos, Culture Books, Promises Beyond Ableness, Mission Command, Consent Decision Making etc. They often appear to be using quirky ways to get things done differently.
Many people are fascinated by this or that “Work-hack”. Some even try it on their own Organization. Well, I guess by now most people have been subjected to daily stand-up meetings, KANBAN Boards and more engaging workshop formats with lots of breakout groups working in parallel – just to name a few of the better known practises.
What if we could explain companies by the way people are working with another? Introducing the Liberated Company Map.
During the last couple of years I have assembled a library of Work Designs of both traditional and more progressive organizations. All these Agile Work-hacks, New Work or Self-Managed Practices were too intolerably disordered for my limited teutonic mind. So here is my roster for ordering them. It consists of three criteria.
First, all work designs have a primary function, a target that they are used for. I have clustered these targets into nine functions of management in a 3*3 matrix. That order is inspired largely by Henry Fayols classic six functions of management.
Please note that “Management Practices” are a subset of work designs – more on that in later posts, I do not want to get bogged down in theoretical discussions here.
Second, work designs are ordered by the size of the power differential that exists between people. By doing this, I am assuming that the amount of discretionary power that bosses have over employees has a critical influence on a persons behavior. People in more hierarchical, authoritarian companies will weigh every word and deed to not upset superiors, wherelse people in more self-managed organizations will find it easier to disagree and speak up. There is much more psychological safety in more self-managed organizations, and that causes work designs that foster on intrinsic motivation and social team dynamics to work much better than they would work in an enviromment of conformity and fear. I clustered the size of the power differential in four levels.
With increasing liberation level, the power shifts away from a manager towards employees and groups. This way of ordering companies is based on a scale proposed by Renis Likert, an American business professor, and is similar to other popular ordering systems, like Laloux’s Teal Model.
Last, I use the severity of a work design as an ordering criteria. The “severity” is the risk of a major backlash occuring if things go wrong with the use of a work design. For example, there is usually no harm in using pratices like “Daily Standups” or “Kanban Boards” but immense harm is done by using “Elected Superiors” or “Self-Service Remuneration” out of place, i.e. without a suitable company environment and other supporting work designs being in place.
Putting it all together, here is the map. It uses the 3*3 Layout of the nine management practice categories, subdivides each of the nine quadrant’s into four sub-quadrants by liberation level, and orders the list of practices in these sub-quadrants by severity. I call this the Liberated Company Map.
It’s a big map: You need to zoom in to see the details; you won’t know some practices and you might disagree with some of the mapping. I can offer you some help right now: If you want to dig into the practices, here is a complete list. Howeever, there is more to it, more to the art of configuring companies with work designs. But I leave that for the next posts.
I like to close with a preview. Any company can be mapped on the Liberated Company Map: Amazon, Google, Haier, Netflix, Buurtzorg or Siemens and Ford – any company. So here is a mapping of Bridgewater, a company of about 3500 employees and the worlds successful Hedgefund, known for its radically progressive organizational design.
All the management pratices not used by Bridgewater are left out in this graphic.
In the next posts, I will go through configurations of progressive companies and explain how they work. Companies on the very edge of organizational design, such as Buurtzorg, Haier and Bridgewater – but also more traditional companies.
I have just finished a manuscript for a book called “Liberated Companies: A Map and a Compass to Better Organisations in the Digital Age” that explains the topic in about 300 pages and 45 graphics and tables. If you are interested in learning more, sign up to my blog.
And spread the word, if you like what you see.
Featured Picture by aitoff, https://pixabay.com/users/aitoff-388338/
I was wrong. Two years have passed since then. Time, I almost exclusively dedicated to learn and practice the art of mastering more self-managed organizations. My advice for those seeking to improve companies or teams is to read Brian Robertson’s “Holacracy”, just after you read Frederick Laloux’s “Reinventing Organizations” or listened to his excellent new video series. Mr. Laloux’s work fills you motivation and Robertson’s work will give you as close a view on the future of management as you will ever get.
The crucial thing which I got wrong in 2017 is that implementing Holacracy is not the thing. It is understanding Holacracy that is crucial for a move towards more self-management. Implementing Holacracy without having gone through a journey towards more self-managed for a couple of years before that, will properly get your company, team and yourself into deep trouble. It is simply too radical for most people in an organization to understand. Still, there is no better way to understanding a possible vision for the destination of the journey to “Management in the Digital Age” than Holacracy. The one approach on par with Holacracy is Sociocracy3.0, an updated and now very accessible version of another, similar “Self-management” Operating system. But beside it, I see no equals, no better way to understand Self-Management thoroughly.
Management 3.0 is certainly much more easily digestible with its colorful Mindsettlers app and has its merits to get more agile, liberated ways of management going, but it is ultimately less useful as a vision. It is something that you can use to start your journey but will not sustain you for long, as it lacks consistency and perspective.
Liberated Management Practices, is a term I use (inspired by Issac Geetz and Brian Carney’s book Freedom.Inc), to describe all the various management practices of progressive, more self-managed companies. They are not part of a system at all. Instead, they are just a diverse bunch of practices used at Buurtzorg, Gore, Patagonia, Haier, Bridgewater, and many more progressive companies. They lack order and consistency.
A way to picture all the ways to manage companies these days looks like this.
During 2018 I become unsure if “management” is still a thing. I was suspicious of the word “leadership” before – after all, there are far more people wanting to lead than to those who want to follow.
The aspect of management which become suspect to me is the notion that people must be managed. Things surely need to be organized in order to reach anything meaningful but do people need to be managed? Isn’t it enough to build an environment where people can prosper and organize themselves as deem best to reach the target of the company? Is the provision of an organizational environment still management or should it better be called work design?
Now, on the 1st of January 2019, I tend towards ditching the term “management” and talk about “work-design” more. Words matter and people often have either a negative connotation of management or an attitude towards management that leads to overbearing behavior.
In the digital age is might often be wiser to think of yourself as a work-designer than a manager.
That way you might keep yourself from interfering too much.
New Years Day is a great time to reflect on the past year. As most of my time in 2018 has been devoted to reading and writing about “organizing companies in the digital age”, I decided to update my list of favorite books on this big topic. The ones that most influenced my thinking can be found on top of the list
Grey Background: Essential Reads
Yellow Highlight: New Entries in 2018
Green Highlight: Books which I came to value more in 2018 – they took time to take root in my thoughts
Red Highlights: Books which I came to value less in 2018 – these are still very good books, though
Books that Describe the Workings of the Individual Mind
This Category is about Mindfulness, Vulnerability, Bias, Mental Focus and all those things that make up the intrinsic motivation of people. What has proved to be quite consequential in my daily work is “Deep Work” by Cal Newport. I think that the ability to deeply focus is not only a personal working technique – it is a quintessential design criterion of an organization seeking to maximize improve knowledge work.
Books about Teams
Oh my, how many years did I delay reading the works of Robert J. Hackman. His work has been cited so often and everywhere, that I thought I already knew everything Mr. Hackman had to teach. How mistaken have I been! “Leading Teams” by Robert J. Hackman is a must read. As is Amy Edmondson’s “Teaming”, which is delivering important underpinnings to ones understanding of teams from the realm of psychology.
“SCRUM” by Jeff Sutherland is still a great book, but I became a lot more skeptical about the rigidity of the method and the dogmatic way SCRUM it is used. SCRUM is so often executed with no understanding to its inner working, that it lends itself pretty well to being corrupted with the conventional, corrosive workings of excessive power differentials between people. OftenSCRUM becomes a method of exploitative productivity rather than customer value and excellence.
Books about Organization
Henry Mintzberg fortified his position on the top spot in my mind in this category with his extremely wise book “Simply Managing”. I don’t think that anyone will come close to that. But be warned: Simply Managing does not, despite the title, supply any recipe for management. Rather, you will end up not knowing what to do now in face of all the complexity.
The same feeling will haunt you after you have finished Philp Rosenzweig’s “The Halo Effect”: Crushing complexity and no easy solutions. Do not despair – hope is just two columns to the right: Liberated Companies.
Books about Digitalization
So many things are written about Digitalization, yet so little new is added. Over the last year, I came to value the challenges posed by the intersection of technological challenges (Companies IT-infrastructure and IT-Architectures) and the way that people are organized more and more: The collaboration of Man and Machine. I came to value these seemingly so techie topics of “DevOps” and “Continous Delivery” even more. Although the understanding of those topics requires quite a bit of insight on the work of software engineers, I believe more and more that there is no alternative for managers than to understand tech.
Digitalization without understanding Technology from a genuine Technology perspective is crucial – a User/ Strategist/Entrepreneur perspective alone is not enough.
Managers, Organizers, Work designer – however, you might call them to need to immerse themselves in the realm of technology or be left out.
Sorry about that, you techno-agnostic writers on digitalization or you organizational psychologists. It far from “nerdy” to know what “DevOps” is. I am convinced that understanding concepts like DevOps is a necessity is a technology to lead companies in a technology-saturated world.
Books about Liberated Companies
What Laloux manages to deliver on examples and theories, Peter Block underpins with spiritual insight in “Stewardship“. The discovery of the word “spiritual” was central for me in 2018, as all more advanced organizations need people to hold open space where performance can prosper, where people can self-direct themselves more. And the conviction that “holding open a space for self-management” is worthwhile doesn’t come out of the blue. It is, strangely enough, a spiritual process.
Now, “spiritual” is not a word often used in management literature. Yet a state of mind naturally precedes any action. A wonderful example which is focused on ACTION but is essentially a spiritual journey is delivered by David Marquet’s “Turn the Ship Around“. A book about a nuclear attack submarine and its crew – a setting like in a Tom Clancy thriller.
If you want something futuristic to read, read Yangfeng Cao’s “The Haier Model”: Haier’s organizational model is probably the most sophisticated company on earth.
Books About Work Designs
The skeleton of today’s companies is the hierarchy and the process. With self-management on the rise, the hierarchy will be replaced with work-designs that ensure checks and balances that allow people to govern themselves. Some of these work designs can be gleaned from the books on Liberated Companies or Teams. Deeper insights into microstructures that make up work can be found in books like “Liberating Structures” from Keith McCandless et al. It is full of practical recipes, too.
Books about Strategy
A company is a purposeful system and cannot be seen disconnected from its purpose. That is why understanding strategy is important for anyone in charge of organizing. A strategy is nothing else than the way for a company to work towards its purpose. Therefore, read Henry Mintzberg’s “Strategy Safari” if you want to manage purposefully – and you want to show those consultants of McKinsey’s and Boston Consulting Group how outdated their analytical way of approaching strategy really is.
Books about Data Science
In a VUCA World, it is indispensable to get a grip on understanding and using uncertainty to the advantage of a company. Running experiments will never suffice is not supported by the capability to understand such thing as volatility, variance, covariance and the difference between causation and correlation.
Nissam Taleb’s “The Black Swan” focusses one’s views on the things that really matter, i.e. when events occur that may be very unlikely but have so much impact, that all other event’s do to really matter.
On the other hand, the small events matter, too, especially in those shorter time frames that most companies use to focus on. Nate Silver’s “The Signal and The Noise” is still my favorite classic for this field. It has very practical implications for the set-up of teams, technology, and processes.
Books about the Digital Age
I read Kevin Kelly’s “What Technology Wants” for a second time in 2018 because I was looking for an answer to the question “What does Technology want from Companies?”. A strange question at first glance, but I suspect that the impact that technology, the cooperation of Men and Machine, has on human collaboration is still undervalued.
In the Digital Age companies must not only solve the problem of human engagement – they must solve the problem of human-machine engagement, too
A special mention goes to “White Working Class” from Joan Williams for explaining the downsides of globalization and digitalization: The divide of society into many have-nots and the few prosperous. This economic and cultural divide cannot be solved by Silicon Valley’s Elitism.
Biographies – Long, Deep Reads
Last not least I have added my three favorite biographies that shaped by view on many of the topics of work design:
“Seize the Fire” by Adam Nicholson – how Lord Nelson, 1st Sealord of the British Admiralty made the Navy. Fundamentally, a book about intrinsic motivation.
“The One Best Way” by Robert Kanigel – a biography of the “worlds first business consultant” Frederick Taylor. He came up with “Scientific Management”, which still dominates companies today. A voluminous book about a thinking process which went on around 1900 and is to thank and to blame for today’s, often inhuman and underperforming state of companies
“The Undoing Project” by star-author Michael Lewis – a biography of the collaboration between Amos Tversky and Daniel Kahnemann, two of the most important organizational psychologists. The essence, as I see it, is: We can’t trust our brain and judgment alone. Human judgement benefits from checks and balances that companies may weave into their work designs.
That’s my year 2018 in books. Let me know what you read and have been fascinated by! I sincerely like to hear from you.
Have a Liberating 2019!
Next post will be continuing the long series on “Effective Teams” – to be found in your mailbox at the end of January.
Welcome to part 7 of the series on high-performance teams. A series which strives to make the works of Richard J. Hackman, a or maybe the leading researcher on team performance, more accessible.
We are leaving the realm of the first 5 factors which are more like the physical parameters of the team. And we are entering the realm of the intangible, the spirit of the team. Team spirit won’t be a physical part of the teams’ work, yet without great team spirit the work might never be done and the work itself might be arduous. The team might never fulfill its meaning, without a team spirit that suits its ambitions.
Condition VI: The Feeling That My Works Does Matter
Let’s take stock. What do we have for our high performing team by now? First, a compelling direction to orient the team. Second, a true team task that makes sense to use a team at all. Third, a small sized team so that people can bond with one another. Fourth, clear boundaries that guide efforts. Also, fifth, a good composition of skills to get the work done. That is all good and fair for the team. However, what is in for me, the individual team member? What is my role in this so carefully staged exercise? Why should the teams’ work be important to me?
Each team member needs something to tie her own motivation to within a team.
What that thing is that amalgamates the individual, and the team effort varies from person to person. It can be an extrinsic motivation, like not being fired, money or sometimes status from just being on a team. The problem with extrinsic factors that tie a person towards a team effort is often that the level of engagement will be limited. It is the nature of complex situations, the types of problems teams need to solve, and of knowledge work in general that the relationship between personal in- and outputs and the performance of the team is hard to observe. To rely on extrinsic motivation exclusively will often result in people just putting in token efforts.
For more profound levels of engagement, intrinsic motivations must be tapped and tied to the team’s efforts. There is a specific model that is describing how intrinsic motivation works in a business setting: Job Characteristics Theory. This theory is a cornerstone of the field of organizational behavior and work design. What this model is basically saying is that intrinsic motivation in a work setting rests on four fundamentals ways how people like to work:
Skill variety: People do not like doing boring things all over and again. By doing things that utilize multiple skills, work is less repetitive and more motivating ()
Task identity: People want to achieve something visible like a thing produced or service done for a customer
Task significance: People love to impact other’s lives positively by doing something that they feel increases a customer or a coworker’s well-being
Autonomy: People like to do things the way they want
Feedback: People like to know how good they are at work. Detailed information on the way they performed. Not to be controlled, but to improve and to feel good about their efforts more often by doing so
These motivators are deeply ingrained in our cognitive DNA. We long for job variation and dread repetition. We want to do the work on our own terms and not being coerced into behaviors that do not make sense to us. We like to see, touch and in any other way ever feel what we endeavored to create. We love that even more if the results of our work matter to other persons, and we are getting better in the things we are doing all the time. If people experience all those five factors while working they feel that what they are doing has a positive psychological impact on their lives: Work has meaning for them – they feel the impact of their work.
It is the “striving” that is intrinsic to every one of us: The longing for mastery, autonomy, and purpose, that we have explored in the other posts of this blog. By being part of a team people do not put aside these longings. They are as strong as ever.
Non Conformity and Anti-Learning Stances
However, people differ. Some people value connectedness to others less, some more. Some people revel in autonomy others are frightened by too much of it. The disposition towards Feedback, to get to know “how good one is ones work” varies strongly, too. Some people like to get feedback to learn and improve, while others revel in groupthink, hubris and a state of failure denial. Systematic anti-learning stances are not uncommon in individuals, groups or organizations. Furthermore, autonomy, “doing things the way they want” might help intrinsic motivation but might hurt performance, as results might be more varied or less than optimal.
But the existence of anti-learning stances or the non-conforming autonomous individual going ways that lead astray from team performance do not invalidate the model. The five pillars of the job characteristics model still provide the critical ingredients to intrinsic performance and therefore give the highest chance of job- or team performance. Indeed, the risks of things going astray for the team can be mitigated. A great way to do this is to set norms.
Condition VII: Social Norming that Fosters Performance
Certain behaviors of teams and team members are more beneficial for performance than others. Norms specify those coveted behaviors. Regulating behaviors is, more often than not, a deeply unpopular or even impossible act. If people can, they will ignore any inconvenient norm. The trouble is: Norming of behaviors is unavoidable. Every team will inexorably end up with a set of norms that regulate acceptable and non-acceptable behavior as there is a natural tendency of people to adapt their behaviors to fit themselves into a group.
Instead of ending up with some random behavior, i.e., norms that just so “happened” to the group, it is better to establish norms inside the team that has proven to be beneficial to performance. Norming may be unnatural, but it certainly is useful.
There are three reasons why performance norms are important. They encourage the team to engage with the outside, they embed the team safely inside the organization, and they foster mutual dependability.
1. Outward Looking Norms: Engaging With The World
These norms are meant to encourage the team to engage with the outside. They regulate how the team is engaging with the world (i.e., the customer, the organization or anyone else not in the team). Typical questions are
How does the team get feedback from customers? In what form and frequency
How are the stakeholders involved in the project? Who is on the steering board
How does the team engage outside experts? In what roles and intensity?
Left to its own devices, without any conscious norming, teams are likely to under-engage with the outside world. Engaging with the outside world is stressful. It means customers are giving inconvenient or non-conclusive feedback, stakeholders hedging their bets in the game of organizational politics, experts providing advice that hard to understand or to adapt to the local situation. But it is needed for success. More than that, the team’s very reason for existence is the deliver results to the outside world. Therefore, norms that encourage the team to engage with the outside world are right front and center of effective teams. These norms describe the performance ethics of the team: The lust for high achievement.
Performance norms are at the heart of the Agile Movement, the SCRUM project method or the LEAN Start-up Movement. The customer with all its idiosyncrasies and ever-changing requirements are right in the center of all these hugely successful methods. Take SCRUM: It demands a product owner, arguably the most central role in the whole method, to fully immerse into the needs of the customer. It postulates working at short intervals to keep the feedback from the customer coming in, continually honing the team’s directions and ways of delivering value.
SCRUM enshrines performance ethics in a set of practical, dogmatic rules.
2. Organizational Conformity Norms: Avoiding Attacks By The Immunity System
The second reason why performance norms are crucial is the survival of the team in the organization. Performance norms specify which behaviors are acceptable and which behaviors are unacceptable to the overall organization the team works in. Every organization has its established norms, and a team just can’t pretend that those do not exist. A short list of “Do’s and Don’ts” suffices. The target of such a list is defensive. It is to prevent the immune system of the organization to attack the project. Every project brings change, and the impetus to changes invariably drives resistance. By specifying behaviors that are helpful to get the teams work effort accepted by the organization, much is done to remove the organization from the list of impediments to a team’s success.
3. Mutual Dependability Norms: Learning To Rely On One Another
Every team effort is laden with moral hazards and frustration Slacking-off, free-riding, and a sense of being impotent to influence results are all contributing to project debt. These hazards are immanent to a team, and there is no way to get around them. However, establishing team norms that foster mutual dependability help to pay off the debt.
There are a number of ways to do that:
Clarify roles and responsibilities of team members: Role descriptions and discussions about roles in each phase of the team effort help team members to understand what is expected of them and others
Feedback culture: Giving each other feedback on behavior or decisions fosters understanding inside the team and creates a bond between each member
Drumbeats: Regular meetings, like SCRUM’s daily Stand-up, the sprint review or the retrospective, fosters mutual accountability. This is true for every regular meeting, as long as people are not just called to or incentivized to speak of but have an obligation to speak up. A meeting format that enforces the active participation of everyone is vital.
In general, the strengthening of conscientious behavior of team members is essential. Conscientiousness is being careful and vigilant. It implies a desire to do a task well, and to take obligations to others seriously. In psychology, conscientiousness is viewed as a personality trait and is therefore mostly unchangeable for the individual. However, in a team context, it can be built into the team’s procedures, by adopting, for example, the routines mentioned above. Over time, people implicitly accept conscientiousness as a norm for the team, even if some members are not at all conscientious but the opposite: Laid-back, less goal-oriented and less driven by success.
Mutual accountability has a lot to do with respecting the other team members. Not everyone wants to treat the office as a social club, and not everyone wants to work in an environment that is all about performance. Still, it is generally not a good idea to include only conscientious people in a team, as those people tend to be less creative, less adaptable and more driven by the urge to conform to expectations and rules. Again, the combination of personality types creates the diversity that positively impacts team performance.
Mutual accountability has a lot do to with respecting the other team member – but respect isn’t a privilege: Respect earned by working with one another and delivering results.
Why Other Norms Are NOT as Important
If performance norms are not deliberately set, other norms will form over time, by the norms brought into the team by the history and experiences of its members. These norms are more about the relationship between the team members than about outward focus. Norms will emerge that center on harmony, as harmony is in the direct interest of the group and every member. Furthermore, difficult decisions in the team’s future won’t be anticipated or actively avoided, to keep harmony. This gives rise to norms of reactivity, to just deal with whatever comes the team’s way at the time the challenge arises. The team under-invests and will pay a high price later in the team effort. Typically, these questions that should better be solved at the start of the project, are about
which persons with which skills and capacity to include in the team,
which elements are in or out of the scope of the project,
a projects time frame and budget.
As every experienced project manager knows, to avoid conflicts early means to face much more significant problems later on.
Every team will create additional norms over time, like certain meeting etiquettes, email and responsiveness ethics or office hours. Research has proven that any of these secondary norms, as Richard J. Hackman calls them, are by themselves not significant for the performance of the team. Other norms are inevitable in the forming of the team, but any secondary norm that is acceptable to the team is as good as another – as long as the performance norm remain intact.
Performance norms connect the compelling direction of the team to an ethic of risk-taking and performance. Consultant and Author Jon Katzenbach calls performance norms „the all-important connection between risk-taking and team performance”.
As boring as the word “norm” is: Norms foster in every team member a lust for performance.
Who would have thought that Norms have something to do with lust?
I am still busy writing on my book about “Liberated Companies” and I won’t bother you with another post in this year.
The term “performance norms “or “performance ethics” is a central, recurring, element of Jon Katzenbach’s 1993 classic book, „The Wisdom of Teams“
Hackman calls the three norms (Outward Looking norms, Organizational conformity norms, and Mutual Dependability norms) “primary norms”, and all other norms, that have proven to be not very significant to a team’s success “secondary norms”. Actually, Hackman stated just two primary norms, outward looking and “behavioral boundaries within which the team operates”. I took the liberty to split the latter norm into to “organizational conformity” and “mutual dependability” for the sake of greater clarity. This split although aligns well with Googles project Aristotle, where “mutual dependability” has been one of the 5 factor of team success and Jon Katzenbach, “Wisdom of Teams” 1993, for whom Mutual Accountability is key to team’s success.
This is part 6 of a series exploring what makes an effective team. Read this if you are interested in great teamwork and high-performance teams in businesses.
The higher team diversity, the greater the chance of solving complex problems
Diversity that is most useful for a team comes in two shapes: A. Diversity of Skills and B. Diversity of Personality
Team’s made up of “the best and brightest” are often bested by teams made up less skilled, but more diverse individuals
More homogenous teams are better suited for repetitive tasks
Diversity is an investment: You might get novel solutions, but you have to invest first and provide time for the team to form
Keep a team stable. Period.
The diversity of people and the stability of membership are crucial for a team. Each person brings into the team a set of skills, intrinsic drive, and beliefs. What matters is the way those individual assets can be employed for the team.
Let’s talk about diversity first. Diversity breeds innovation. The more diverse people are, the more original and innovative the solutions that the team can come up with. Diversity is a crucial driver of innovation.Get together a crazy bunch of highly skilled people with wildly divergent world-views and backgrounds and the team will likely deliver highly innovative results. The only thing that stands in the way is the integrative ability of the team to get from immense social stress to the right level of social bonds that allows a joint team effort.
We tend to glorify innovation, but innovation is finding small creative solutions in daily work, too. Any effective team is a team in search of big and small solutions, every day. Diverse teams find it easier to come up with novel solutions.
There are lots of things that make people different, but the two elements with the most impact on team performance are skills and personality. A team needs to have all the required skills available to do a job. The more complex and unpredictable the environment is, the more diverse skills are required. It might turn out that some of those skills are not actually needed. However, complex situations are hard to predict. Who would have thought that calligraphy would be a useful skill for Steve Jobs while designing the User Interface for Apple IOS Operating system? So, it is not only important to have the right kind of skills inside a team, it is beneficial to have more diverse skills available than one would think are needed, too.
Then there is personality, which is much harder to measure. Combining different personality types, like introverted thinkers and extroverted achievers, optimistic and cautious people, inventors and perfectionists is important. A practical way to think about different team roles has been described by Meredith Belbin in 1981, the “Belbin Team Inventory.”While such and other psychological tests are useful for choosing the right people for jobs, not many companies use them, or they fail to apply the insights gained from such an analysis in a carefully crafted decision process.
Philipp Tetlock, a British researcher 2016 writes in his 2016 book “Superforecasting”, that diverse groups of problem solvers consistently outperform individuals as well as groups composed of the best and the brightest. That’s not to say that skill is irrelevant, but a better-rounded set of skills is more useful than more of the same. One rocket scientist in a team of ten production engineers makes a HUGE difference, but ten rocket scientists and no production engineer leaves the team with no idea how to manufacture that good dam rocket.
Philipp Tetlock, a British researcher 2016 writes in his 2016 book “Superforecasting”, that diverse groups of problem solvers consistently outperform individuals as well as groups composed of the best and the brightest. That’s not to say that skill is irrelevant, but a better-rounded set of skills is more useful than more of the same. One rocket scientist in a team of ten production engineers makes a HUGE difference, but ten rocket scientists and no production engineer leaves the team with no idea how to manufacture that good dam rocket.
Still, diversity has its drawbacks. The more diverse a team is, the less cohesive it is. But it is cohesiveness, which makes the team stable. It is tough to align a bunch of very different persons into a productive way of working. The more diverse the team, the more time is needed for people to bond with one another, and the higher the potential for conflict. Diverse teams are great for innovation, but homogenous teams are great for stability.
There is a trade-off between innovation and the stability of a team.
The integrative ability of a team is limited. It is time-consuming and emotionally stressful to integrate new team members or part with existing ones. A team needs stability. A team that is changing every day or week, where team members keep dropping in or out is no team. There is no time to bond with another, and there can be no shared feeling of commitment, there can be no “us.” Again, this sounds rather obvious. There is a tendency in business to ignore stability. There are always unforeseen things happening, and there are always other priorities emerging, so often there is no other way then exchanging team members, at least for some periods of time. Just a day of the week, maybe, how bad can that be?
Pretty bad. A team which is continually changing might have no chance to perform. People might never get sufficiently close for effective teamwork. Even worse, if people keep on dropping in and out, people learn that it makes no sense to build up good working relations. People might be gone tomorrow.
A lack of stability hurts the performance of a team tremendously. People need time to get to know each other, and they need to have the time to familiarize themselves with the collective work. Only then the group will build a shared mental model of the way work is done. The academic evidence comes to a universal verdict: The longer a team is stable, with no team members entering or leaving, the better the team’s performance.In a study of research teams, Mr. Hackman has found that exchanging one or two team members in a team of 5 to 7 team members doesn’t hurt performance only if it happens every two to three years. If a team member is to be added, exchanged or dismissed at all this should be done in the early phases of a team’s life cycle, for example with an eye on increasing the skills available to the team.
Yet it is hard to keep a team stable in a dynamic business environment. Certain things can be done to increase the resilience of a team against excessive fluctuation:
• Get the team composition right from the start. Invest extra time and care to recruit the right people, free them up, and back-fill vacated lines positions. Compromises made early, during the forming of a team, will come back to haunt you manifold later. It is easier to start a team if you allow for some compromises, but it is hard to deliver the results that make the team a resounding success
• Set the team’s task broadly. A broadly defined task is likely to be more stable if business priorities keep changing. Thereby, while priorities for the team might change in detail over time, the overall direction of the team will still be stable. A team faced with a broadly defined direction in a dynamic business will likely configure itself to use frequent iterations of work, reflection and adjust to evolve their work to the changing priorities. That’s a core idea of the Agile movement.
• Go for more homogenous teams at the costs of diverse teams. The team will properly not come up with a lot of innovation, but it is inherently more stable. It starts up with much less motivation and coordination debt. Diverse teams find it easier to come up with novel solutions. Homogenous teams find it easier to apply already known solutions. If my house is on fire in Bordesholm, my hometown in the north of Hamburg, I want those local volunteer fire-fighters rushing in, who know themselves since elementary school. I am not interested in novel solutions to fight the fire. I am interested in getting it out, fast and reliably.
Sometimes – and I guess not to infrequently- innovativeness might not be what is called for. It might be more important to get a job done
• Finally, consider doing less things with teams. Teams start with debt. It takes time to recuperate this debt. If the payoff period is likely to be not long enough to achieve break-even prior this or that change ripping the team apart, it is better to work on things in a manager led, workgroup setting. Only the most important things should be done in a team, as these tend to be more immune from ever-shifting priorities
The Integrative Ability of Organizations
But wait, there is another thing you might want to try. What about if forming and reforming, norming and re-norming teams is a natural part of an organization? What about if the integrative capabilities of groups are so high, that they allow for much more instability without hurting performance too much? Think for example of consulting teams, especially highly specialized ones. Those kinds of teams need to reform and re-norm all of the time, with each new engagement and each new client. While research has shown that even their performance would benefit from more stability of the team itself, good consulting organizations have usually achieved a high integrative capability. In fact, integrative capacity needs to be part of their very business model. However, consulting companies are project-based organizations. So, their model of operating won’t help other types of organizations.
Now imagine an organization that comes with a high degree of integrative capacity, so that effective teams bond fast. Where people are used to work in effective, high performing team environments. They know what is expected of them and the forming, storming, and norming phases are mastered rapidly. Indeed, some norms for teamwork comes inbuilt in each coworker because it is wired into the DNA of the organization itself. Such organizations are those that rely more on self-managing teams than the traditional hierarchy.