The Do-Good Ideology of New Work

A lot of the narratives about progressive companies are colored with positive moral statements about how work should be organized. While this is certainly inspirational, I always suspect these statements to be misleading. Isn’t it better to have a cold, more rational view of businesses?

A Normative Canon of New Work

Last week, I came across an 18 point list of belives about business management, put forward by Ari Weinzweig. Ari is an author of a series of excellent, unique business books and the founder of a group of progressive businesses in the US. Let’s dissect this list of belives in two categories: Normative Statement and Recipes.

Normative statements:

Design work that…

1. brings joy, purpose and creative passion

2. builds an organization that helps people be themselves

3. makes a business a tool for positive change where everyone comes out ahead

4. chooses quality Over quantity

Oh, hell, yes! Everyone should experience joy, purpose, and make the world a better place in every minute of working. I fully subscribe to these statements. However, there is a snag. Most businesses are not like that. Given the need to make a living most people confine themselves to just making profits – and relegate all other considerations to a secondary priority. Turning out a profit is hard enough, why weigh oneself with other considerations? It might be simpler to just follow those recipes, which give a higher chance of making those profits, which keep a company afloat. Let’s have a look at such recipes next.

A Utilitarian Canon of New Work

The remaining 14 principles on Ari Weinzweigs List are recipes likely to work well in modern companies: 

Recipes

1. Don’t Just Enforce, Engage!

2. Don’t just teach people how to do a job, help them learn to run the business

3. You Need Great People to Make a Great Organization

4. Share an Inspiring Vision of the Future

5. Tap the Powerful Nature of Purpose

6. Put Autonomy into Practice

7. Create Creativity

8. Practice Continuous Improvement

9. Collaboration Counts; Diversity and Discussion Make a Meaningful Difference

10. Honor the Power of Beliefs in Business

11. Training Is Terrific

12. Don’t Settle for So-So When You Can Go for Greatness!

13. It’s All About Self-Awareness

14. Ends and Means Must Be Congruent

The Do-Good Ideologists of New Work vs. the Cybernetic Manipulators

Recipes assume a utilitarian outlook on the world, an orange world view (for those versed in Frederick Laloux’s version of Ken Wilbers Spiral Dynamics), a predictable relationship between cause and effect, between costs and benefits: Do X and you will get Y. They are interventions into organizational systems that might be done for whatever motives, good or bad. They can be elements of a positive utopian workplace as well as devious schemes of exploitation.

Cybernetic manipulation of work designs is what is mainstream, even in the realm of progressive organizations. Agreed, few people are aware of the term “cybernetic manipulation”. Still, the way people apply calls for more psychological safety, more diversity, more autonomy in organizations solely for better economic results is nothing but cybernetic manipulation. It is entirely in sync with today’s (orange) focus to use whatever works to achieve better results.

Progressive Ideology versus Deliberate Thinking

I think that everyone interested in progressive organizations needs to be aware of whether one pushes normative statements or utilitarian recipes. 

  1. An Ideologue pushes normative statements – which is excellent to rouse oneself and others in a quest to make the workplace a better place.  
  2. A deliberate thinker pushes recipes– which is useful to better the organization but often lacks a moral compass.

My point is: We need both, the Ideologues and the deliberate thinkers. My fault, as reflected in my work on liberated.company and the upcoming book, which should be in stores in January after some delays in printing over the holiday period, is undoubtedly to veer too much on the deliberate thinker, cybernetic manipulator side. 

Mobilization needs Ideology – Truth needs Deliberation – Progress needs both: Ideology and Deliberation.

The deliberate Ideologist

Ari Weinzweig is a deliberate ideologist. He recently wrote an excellent, 60-page essay “Going Into Business with Emma Goldman: 18 Anarchist Lessons for Business and Life“. It makes an excellent read over the holidays.

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This post is inspired by a post by Ari Weinzweig on Corporate Rebels.  Ari’s four-book series “Zingermans Guide to Good Leading” is his premier work on business management and leadership. Zingerman is the name of the restaurant and deli group of companies that Ari co-founded and managed during the last decades in Ann Arbour, Michigan. His texts have been an inspiration for my upcoming book “Liberated Companies: How to Create Vibrant Organizations in the Digital Age.” 

Why Liberating Companies Is a Bad Idea

There are excellent reasons to be suspicious about an author who sets out to blast his own work, so you should certainly take this with a grain of salt. Still, what you will find in this post is an honest attempt to critique the thoughts spelled out in the soon to be released book “Liberated Companies.” 

Let’s start with a definition: 

A Liberated Company is a learning organization that evolves its work designs in a holistic manner towards a more egalitarian distribution of power. It aims to free people of oppression to put itself on the trajectory of technology, thereby maximizing its number of options over time. #liberatedcompany

Ready to shoot holes in it? Ready. Aim. Fire!

A) The claim to “liberate companies” is pretentious. 

Companies are coercive systems. By their very nature, they need people to submit to the needs of the company. Liberating people is unrealistic; it’s Anarchy. Companies need discipline and submission.

The Defense: If the way power is wielded in today’s companies is corrosive to a companies performance, and people’s and society’s wellbeing, liberation is indeed what is needed.

Agreed, a company needs to align people’s actions to its needs. But there are better ways to achieve that alignment than the formula “money for submission.” In a more and more knowledge-driven and dynamic economy, people’s creative problem-solving potential goes to waste, if an organization does not utilize people’s intrinsic motivation. Running companies on coercion or incentives is outdated.

Yet, liberation is a weak term. It describes the release of some constraints, but it does not represent the target itself. If the current way of running companies is to be replaced with something, what is it? It is undoubtedly not Anarchy, as Anarchy is often understood as an absence of rules. 

In a liberated company there are, actually, more rules than in traditional, more hierarchical companies. These rules are there to regulate the distribution of power between people so that everyone in an organization becomes more powerful while still enabling decisive action and focus of effort.

Companies need discipline and submission. But that discipline and the submission is to rules, not towards superior managers. The paradox of liberated companies is that, as a rule of thumb, the more liberated organizations are, the more regulations (in the form of work designs) they have. The crucial point to understand is that freedom is not the absence of regulation. Instead, freedom is the balance between autonomy and loyalty – between managing and being managed. In a traditional organization, that balance is out of whack, as most people are being managed instead of being in charge of their own work. 

We need to use work designs more deliberately to correct this imbalance. Which brings us to the second critique.

 B) Work designs are secondary: All it takes is excellent leadership – everything else will follow suit. 

Great leaders know what works and whatnot. They will come up with the right organization on their own initiative. It is their decisiveness and strategic thinking that is all-important to a company.

The Defense: Are we not beyond the strong man theory of management?

The strong man theory has all but been debunked in management and organizational research. The systems of work used in a company (and its expressions, the mindsets of coworkers, and the culture of a company) are more important than any individual, and be that the CEO. Chapter two of the book “Liberated Companies” lists all the evidence.

C) The concept of work designs is too fluffy, too open for interpretation, to be actionable.

Just look at the list of work designs on the Liberated Company Map: How can work hack’s like Kanban Boards, or the Advice Process change companies for the scale? All these work designs are not even solidly defined – they mean different things to different people.

The Defense: You got to deal with the complexity of businesses. To remain blind-sighted is not a good option.

Agreed, there are no norms for work designs, and no single work design is likely to be truly important for a company. Yet, any company is made up of work designs, and progressive companies evidently use different ones than traditional companies. Plus, they use more of them and in a more deliberate manner. The evidence about this in academic studies about progressive companies is hard to ignore. 

No work design will likely ever be precisely the same in two companies. That is not what is needed, what is ultimately crucial that work designs are used in a manner and composition to create a self-supporting configuration of work-designs.  

Reality is messy. Still, this shouldn’t keep us from describing the patterns we see in companies and develop a model to get to grips with this complexity. Work Designs, the Liberated Company Map, the 11 Principles of Liberated Companies, and others are all elements of such a model.

D) Well, work designs and liberation might be a thing – but there are more important things to focus on in businesses.

Product Innovation, Business Model Design, Talent Management, Restructuring, Systems Implementation, Cost-cutting, Growth, Business Transformation is all more important. All these initiatives have direct impacts on companies’ survival. Organizational efforts might be useful, but work more indirectly and are therefore of lesser priority.

The Defense: (i) The point is not to stop these initiatives but to supplement them with organizational measures that foster their success: More liberated work designs.

Every business initiative has an organizational dimension to it. After all, what else are business initiatives than people collaborating with another? No matter what a business is up to, it should do it by using the most ingenious work designs it can come up with. So the question is not to delay any necessary initiative but to use it as a vehicle to start weaving more liberated work designs into their very fabric.   

The Defense (ii) Liberating companies is more than a supplement to business initiatives: It is a worthy target on its own. 

Many companies struggle to get to grips with the digital age. In chapter one, “The Trajectory of Technology,” I argue that companies can be made much more technophile, i.e., able to absorb technologies and put them to good use, by adopting more adequate work designs.

Did I deflect all critiques? I do not think so, and I do not believe that I ever will. The concepts laid down in liberated companies are just a model, and there will be better ones in the future. Hell, there might even be better, more accurate, and more practical models out there today. If you know one, let me know.

That’s it for this post. “Liberated Companies- How to Create Vibrant Organizations in the Digital Age.” will be in stores at the end of this month. 

Stay in touch by subscribing to this blog.

More details can be found on www.liberated.company.

A Beginners Guide to Liberated Companies

“Liberated Companies” is a new approach to organize companies or teams. Its unique perspective is to make the work designs- i.e., those structures, processes, and routines used to collaborate inside an organization- explicit and evolve them. 

Every company uses work designs: Meetings, decision-making, task allocation, information and communication, performance management, project methods, and business processes. There is no way for any company or team not to use work designs. The thing is: Most companies are not aware of what often disastrous effects their incumbent work designs have on their performance as on people. Overwhelmingly, companies plow ahead and use those work-designs their managers learned by imitation from past generations’ managers.

Progressive Organizations, many Technology Companies, the Agile, New Work, and Lean Start-up Movement demonstrate that better results can be realized for everyone by using ever more refined work designs. Work designs that enhance people’s collaboration by eliminating fear in the work-place, creating the space for more mindful, holistic, and finally more ingenious solutions.

Liberated Companies provides a model and methods to utilize these advanced work designs at scale. Just imagine what good follows from activating people all those 85% more or less disengaged people in today’s companies, of people bringing their whole to work instead of turning into a mini-sized version of themselves once they entered the office!

Six challenges for todays organizations

Every work design carries in it a message. Hierarchical decision making, for example, however it is done, carries with it a clear message of discretionary, paternalizing power. It tends to disenfranchise people, making them retreat into their inner shells. More participative decision making, more open communication, more dynamic systems of distributing power between people, reduces these negative messages and systematically encourages people to speak up. 

Another example: Giving feedback. The way that managers give managers feedback but teach people to become subservient underlings. Not because all managers suck at it, but because feedback is usually delivered from a position of great power, teaching people that manipulating the perceptions of superiors is more important than truth.

Or think of meetings. Meetings are often only thinly structured discussions on agenda points that do not reflect what people actually need and that do not strive in any way to elicit people’s genuine opinions.  

Work designs are not merely structures to get things done. They all carry messages in them that are detrimental or beneficial for an organization’s mission and growth. Every time a meeting is done, a review is done, a decision is taken, information is disseminated, a project is set up, it sends a message to people. It teaches them how to behave, what to say, and it impacts their self-esteem and personal agency. 

The “Liberated Company Map”- A map of work designs.

Systems change people much more than people change systems. The unreflected systems of work designs most companies are using today are not working as good as they could. “Liberated Companies” mean to change that.

A Liberated Company is (i) a learning organization that (ii) evolves its work designs in an (iii) holistic manner, often (iii) towards a more egalitarian distribution of power. It aims to free people of oppression to put itself on the trajectory of technology, thereby maximizing its number of options over time.

“Liberated Companies” is an approach to creatively configure and evolve the work designs of any organiz ation, company or team.

An Introduction to Liberated Companies

Let’s change the system and start evolving work designs to make companies and teams into ever better versions of themselves – for the benefit of everything that a company touches.

This book shows how: Liberated Companies – How to Create Vibrant Organizations in the Digital Age.

To learn more:

Or contact us via linkedin.

How is the worlds most successful Hedgefund organized?

Which companies are at the forefront of organisational design AND economic results? The case can be made that this list will include these three companies: Bridgewater, Buurtzorg and Haier.

  • Bridgewater, argueably the worlds most successful hedgefund over the last decades with 125 Billion Dollars of Assets under management
  • Buurtzorg, a Dutch Health Care Company which grew from zero to 14500 co-oworkes within twelve years
  • Haier, the worlds dominant manufacturer of white goods (e.g. washing machines), which gained prominence by buying GE Appliances in 2017 – and by its CEO smashing sub-standard washing machines with a sledge hammer

These three companies are all leaders within their markets. They are quite different from one another, but all of them share one common focus: Work Designs. They use a configuration of work designs that contributes to their mission. Not only that, they experimented with work designs over years to come up with ever better versions of themselves. By zooming in on these progressive organisations it becomes blindingly obvious, that their success is rooted in their obsession over work designs.

Bridgewater, Buurtzorg, Haier – companies that know that their success is rooted in their obsession to design ever better ways for people to work together.

The concept of work designs and configuring companies has been introduced preciously in my blog, especially in the last post. Starting with this post, I like to analyse the configuration of these three leading companies, one company at a time. Let’s start in this post with Bridgewater.

The configuration of Bridgewater

Bridgewater is all about learning. For a global hedge fund, it is all-important to get the big decisions right, the ones involving billions of dollars. Consequently, Ray Dalio, the founder and guiding spirit of the company, has configured it with work designs that strive to get one thing right: making big decisions. Learning is the sustainable advantage that Bridgewater seeks in order to make ever better decisions.

Bridgewater can be characterized as a hierarchical organization that relies not on orders but on mission command. Through its management practices Bridgewater strives to develop people from a socialized mindset (“team players”) to a self-authoring mindset. It wants people to become more autonomous, independent problem solvers. A framework of adult development, proposed by Harvard researcher Robert Kegan, whom we met before, underlies Bridgewater’s choice of work designs. In his 2018 book, Ray Dalio describes his organization as “a machine to produce good decisions through the optimal use of the collective power of self-authoring minds”.[1]Let us look at how Bridgewater achieves this, category by category.

The structure of the above map is explained in in the last post.

Some of these work designs might be unknown to you. Feel free to investigate them in the compendium of management practices.

Organization

Bridgewater has not abandoned the traditional hierarchical structure. It focuses much more on learning and reflective practices, while expecting managers to empower employees so that people take charge of their own development. Managers are to refrain from ordering and requesting obedience. They should use mission command instead. Personal development at Bridgewater is decentralized: everyone is a coach and a mentor, as well as  being coached and mentored.

Decisions

This is the area where Bridgewater is very special and very focused. Most decisions are still made by individuals and hierarchical superiors, but the most important decisions are made using a unique process called “believability-weighted decision making”. In a very structured meeting format, decisions are made by voting on alternatives. The number of votes that everyone gets depends on their track record of making good decisions. More experienced, more competent, more knowledgeable people with better track records get more votes than novices without much experience in the subject that is to be decided upon. Hierarchical rank does not matter – but competence in the subject to be discussed does.

The thinking behind believability-weighted decision making is that voting is good, as it allows an organization to use collective intelligence, but it is better still if the voting is done by competent people ‒ an idea that is as reasonable as it is fraught with difficulty and danger. Who determines the competence levels, the individual believability of people? At Bridgewater that competence level can be set by a superior, it can be voted upon by a group, it can be established by data analysis (for example on the basis of CVs or psychometric testing), or a combination of these three methods.

Believability-weighted decision making is an attempt to make high-stakes decision making in companies more effective. In democracies, anyone proposing this kind of decision making would be rightly accused of Orwellian elitism. Every national assembly, even the founding fathers of American democracy, has struggled with this issue: “Surely, we can’t give equal voting rights to the plebs, the uneducated masses! We aristocrats/bishops/merchants/educated people need to lead.” In a company setting, the jury is still out on the believability-weighted decision-making idea. Ray Dalio is sure that this kind of decision making is a huge part of the reason why Bridgewater is – by some measures ‒ the most successful hedge fund in the world.

More conventional, participative decision making, delegation of decisions, the advice processand other decision practices are also used. Routine decisions, those that can be safely trusted to a number-crunching machine, are routinely engineered into algorithms. Especially in the financial sector, machines are making many decisions on their own or are an integral part of a combined machine‒human decision process. While other companies approach decision making by machines haphazardly, as mere minor features of this or that process, Bridgewater has elevated algorithmic decision making into a work design.

Meetings

Bridgewater is strong on meeting structures. It recognizes that everyone must be heard. It employs a time limit of a maximum of two minutes of uninterrupted talk in small meetings. And it expects people to make themselves heard, too: staying silent is not an option. Even in large-scale meetings, people are obliged to give feedback about their feelings and the performance of other meeting participants, using an online app that displays the feedback in real time on screens, while the meeting is still in progress. People are supposed to be open-minded and assertive. Meeting structures drive these two behaviors to the fore.

Control

Bridgewater employs most of the usual practices of a hierarchical organization: target setting, budgets, dashboards, standard operating procedures, job descriptions and reports. The most significant practice to align and control the work of people at Bridgewater is mission command, although Ray Dalio doesn’t call it that. The nature of mission command fits the overarching target of creating and utilizing self-authoring minds perfectly, as it is squarely based on the independent problem solver. On top of mission command, people are also expected to pick challenges themselves. The self-authoring mind writes their own destiny in service of the mission that a superior or the company has defined.

Bridgewater uses toolscaping intensively to supply its people with integrated tools to manage the business. Far beyond the usual communication and business process supporting systems, it goes so far as to provide apps for interpersonal conflict moderation and interpersonal transparency, and cloud systems to stream videos of meetings. It appears that founder and CEO Ray Dalio takes a personal interest in an ever-expanding, ever more integrated tool set.

People 

Bridgewater emphasizes three kind of people practices: testing, coaching and feedback. Testing is pervasive. New hires remain in a special “onboarding” status for as long as reviews are not good enough for them to be allowed to move into the line organization. Dalio writes that a 30 percent attrition rate is acceptable, and onboarding may take up to 18 months. Even people inside the organization are re-evaluated regularly by co-workers at all levels and through the use of psychometric testing. Dalio speaks of “oiling the machine”, a questionable and telling metaphor for his utilitarian outlook on people.

Performance management is centered on coaching. Being a manager at Bridgewater means being a coach; without outstanding listening skills and questioning techniques no one at Bridgewater should be able to climb the ranks, or indeed, retain their job for long.

Transparency

Transparency is extremely highly valued:

  • Videotaping.Every meeting is videotaped and accessible for everyone.  
  • Issue filter. Everything people feel about the company and job is supposed to be captured in a system for all to see.
  • Baseball cards. Every person is described with a small number of key personal attributes determined by psychometric testing and co-worker feedback. 
  • Open reports. Every report is available to everyone. Classified reports do exist but are a rare exception. 
  • Daily updates. Every day, everyone in the organization posts their answers to three questions: What did I do yesterday? What is to be done today? What are my reflections, the thing or feeling that is most in my mind? These posts can be seen by everyone in the organization. 

Bridgewater is definitely operating on a “all there is to know” basis ‒ and not on a conventional “need to know” basis. Its overarching target is to supply all the information that “self-authoring” minds at all levels can process, learn and use to provide feedback or come up with better decisions. This degree of openness is radical and can easily appear dystopian. Is a place of work where the light of transparency is everywhere and there are few dark corners to hide and rest still a place for humans? Is this degree of transparency making people show compliant behavior on the outside while keeping their true views to themselves? Many people are quite skeptical about Bridgewater’s configuration of work designs, while others, like philanthropist Bill Gates, appear to be supportive of Dalio’s practices. [2]

Projects

Little can be obtained from the sources about any special work designs for projects. However, it seems fair to speculate that Dalio’s outlook on projects is bound to be determined by the three cornerstones on which he built Bridgewater: elaborate decision making; learning; and feedback and radical transparency. This means Bridgewater would be expected to use more mature work designs for its projects, like agile methods, but I found nothing to substantiate this claim.

Learning

Dalio’s core idea for his company is learning. He wants Bridgewater to be a meritocracy of ideas,  a place where the best ideas are produced and where people that consistently produce these great ideas rise to the top. He even provides a formula for this: “Idea Meritocracy = Radical Truth + Radical Transparency + Believability-weighted decision making”. The target is to create a culture of learning, where failure is allowed, and the resulting pain is distilled by (brutally honest) reflection into learning. Everyone is expected to teach everyone all the time in a work environment saturated with learning opportunities. 

Reflection

Reflection in an environment of “radical truthfulness” means ignoring social impulses to dampen one’s critique to the point of being perceived as unkind and rude. Dalio calls this way of giving feedback “tough love”. As well as reflective microstructurespeer feedbackskip-level feedback and talking partners, two more radical practices stand out from the host of opportunities for self-reflection at Bridgewater: the dot collector and the pain button (see Chapter 8).

Bridgewater clearly puts the collective interest of the company ahead of the individual interest of comfort and self-preservation. Bridgewater is a very challenging workplace where you need to display an uncompromising willingness to learn. There is nowhere to hide from personal injury of the ego in a place of radical openness and radical transparency. Unlike other elitist organizations, no one is able to rest on their laurels. Its central ideas are:

  • An idea of technology that sees technology and people as co-workers.
  • An idea of performance centered on making ever better decisions.
  • An idea of ruling based on a hierarchy which nurtures people to become self-authoring.
  • An idea of work based on never-ending, relentless growth in a machine of learning.
  • An idea of life based on mental awareness.

You might feel fascination or abhorrence at these radical practices. But one thing is for certain: they are a great experiment.

Conclusion

Bridgewater uses a staggering number of work designs: Seventy five. A typical, run-of the mill company uses just about a third of these, usually about 25 to 30. This proliferation of work designs is typical for progressive companies. It seems counter-intuitive, but Bridgewater is regulating the work between people heavily in order to make it easy for them to speak their mind freely.

The paradox of progressive organisations: In order to liberate people you need to regulate a psychologically safe work space into being.

It is a complex story, but basically if you want people within a hierarchy (which Bridgewater is) to speak up, you got to restrict the arbitrary power that managers have over people. The way to do that is by using mandatory work designs.

In the next post, I will contrast Bridgewater configuration of work designs with the one of a more traditional organisation, before proceeding with analysing Buurtzorg and Haier. I like to end with a teaser: Here is a chart comparing the average liberation level of Bridgewaters work designs to the ones of a traditional, purely hierarchical company.

Hope you enjoyed the post. Sign up the the emailing list of the upcoming book “Liberated Companies” if you like what you see.


[1]Ray Dalio,(2018) Principles (Simon & Schuster)

[2]A critique can be found at https://www.nytimes.com/2017/09/08/business/dealbook/bridgewaters-ray-dalio-spreads-his-gospel-of-radical-transparency.html, retrieved 5thof  June 2019

I have posted about Bridgewater before if you like to learn more just search for Bridgewater” on the Blog side.

200 Work Designs on a Map

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.

The nine types of management practices

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.

Companies can be distinguished by the size of the power differential between people

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.

Developmental stages of organizational systems: 4 models

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.

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.

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Featured Picture by aitoff, https://pixabay.com/users/aitoff-388338/

The Main Managerial Fallacy and the Full Stack Manager

The way most managers do their job is rather dull. It all begins with the very basic assumptions that managers have about their job. Most managers frame their job as being three things:

  • to lead some people
  • to make most decisions
  • to balance the organizational needs of performance with the needs of the ones performing

Basically, they think they are in charge. Which is perfectly right, only that they picture themselves to be in charge of the wrong things:

The Managerial Fallacy

Managers usually think of themselves as being in charge of a performance mission …but they are really in charge of getting people to do things.

This difference between these two frames is far from being subtle.  Being on a performance missions triggers you to think in terms of the mission, to dissect it into its component parts, to reassemble it into a better organizational machine, and to place the workers to operate that machine. It triggers a rational process of solving a performance problem.  This is exactly the thing we have been trained for at school and at universities. This way of working feels natural and comes easily to us. The frame is: “I am in charge of running this”. But it is wrong.

Analytical analysis is an optimal method to solve a mathematical equation, a physical, mechanical or most problem in natural sciences. Given sufficient information, you can rely on the stable causality of the natural laws to come up with an optimal solution. But an analytical approach does not work in social sciences. Here you never have all information, as the information does not lend itself to being measured well. Plus causalities are always hidden and unstable. You can’t predict individual behavior.

In such a much less predictable, social environment the best method to proceed is not an analytical one. It is an empirical one.  You need to try things to find out the best way of doing things instead of assuming that you found the optimal solution. In social systems there is no thing as an optimal solution, there are only solutions that work better at a certain point in time. People and organizations are volatile. The whole business environment is more and more volatile in this digital age. A stable optimum needs to be replaced by neverending tinkering to always try to come up with a better solution.

Therefore the much superior frame is: I am in charge of getting people to do things.

This frame prompts a manager to:

  • tinker for a better solution, continuously
  • to lead people in such a matter so that they can do things better
  • to consider oneself as a manager of a socio-technical system, the performing organization, not of a mechanical device with measurable in and outputs
  • to understand the work of a manager as a craft. A craft that is to be perfected over time, through tinkering, try, error and learning

After all, management (or leadership) is about this:  Getting people to do things. It is not primarily a problem to be solved by the manager. It is not constantly firing a barrage of orders or motivational messages, as this would be tiring and therefore ineffective. But it is about creating an environment where people do those things that need to be done because they want those things to be done.

Dwight

That environment is built from of Management Practices which are often unlike the ones we commonly take for granted. Here is a comparison.

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Management practices are the building blocks of the craft of management. There are hundreds or even thousands of management practices available. Many of those practices have their origins in the Agile or Lean Movements. But the goal is not to adopt as many advanced practices as possible. First, these are not necessarily better than existing ones in the context of a specific organizational challenge. Second, adopting too many practices means creating a highly regulated work environment. This is contra productive. The target is to create an environment where people do those things that should be done because they want to do those things.  Keep it simple – allow freedom.

The Full Stack Manager

Let’s summarize this modern understanding of a more clever way to manage. A manager is:

  • the builder of environments
  • the provider of freedom
  • the one who connects the performance missions of an organization to the calling of the individual
  • the one who experiments with different management practices in order to find ever better ways to engage groups of people

If you continue on this line of thinking, an optimal scenario to run a sociotechnical system may be to even delegate designing, building and running this system more and more to its component parts, i.e. the people doing the work. By going down that path you end up with a self-managed organization, that has left behind the hierarchical way most organizations are organized.

While this is attractive to more and more companies – even parts of the likes of Daimler, Porsche, Unilever, and Michelin – not to talk of AirBnB, Netflix, Haier etc. – this is not a natural given end state. Hierarchy, as an easily understood, time-proven coordination mechanism has its merits.

Nobody can say where the optimum is for your organization. Nobody can say which management practices are best for your organization. But you can find it out: Tinker, you Craftsman!

A Master Craftsman in the trade of Management is what I would call a Full Stack Manager. One who knows how to run meetings, to know how to create transparency, to know how to make decisions, to know how to create a feedback and learning-rich environment etc.

So, why are managers (so often) dumb?

There are a number of explanations:

  • Peter principle: Everyone is prompted to her or his level of incompetence. Only the competent get promoted. But their career stalls when they are incompetent. This leaves most managers incompetent. This logical argument is a heuristic, that is hard to prove or to disprove.
  • Principle-Agent Problem: Managers may appear to act incompetent, but they really have their own agenda. This agenda might entail risk minimization (or – less often -risk-taking), personal enrichment or aggrandizement, or just having a good time. They should be taking care of the organization, though. Alas, the amount of information that the principal (a superior or shareholders) is always less than the information the agent (the manager) has.
  • Getting things done is more important than doing things great: Success in business is a function of doing the right things on a strategic level, good execution and a good dose of luck. It’s not fully correlated with good management practices. In fact, there are studies that suggest that just 10% of a companies performance is related to good management practices.In other words: You do not necessarily need good management to succeed. Survival is mandatory, performance is optional.
  • Human Nature: Power corrupts. We tend to warm ourselves in the shine of it, making us blind to things going bad and feeling entitled to the status quo.

All of this is true and there is not much we can do about it.

But what we can do to decrease our dumbness as managers is to reframe management from “a solver of performance equations” to a “Gardner of socio-technical performance systems”.

Or to say it in simpler terms: From a Scientific Manager to a Gardner of Sociotops.

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Let me know what you think.

Sources:

I am such a sucker for recency bias. So here is what I read last and which therefore didn’t fail to influence this post:

  • Nissam Taleb, “The Black Swan” and “Antifragile“. Both great book if you want to learn the differences between physical and social systems
  • Phil Rosenzweig, “The Halo Effect“. If you want to know why 95% management literature are stories, but not science, read this. The bad thing is, you will be deeply depressed. The good thing is, re-read this article to cheer-up: Experimentation is the way to go, not dogma.
  • The other books I happened to rate highly on the Sources page

Other than this have a look at

Stop Denying Reality and Start Measuring Employee Engagement Now

Employee engagement matters. Can we agree on that? Ok, so why is your organization not measuring it?  Is it, that management is too afraid of the results? Except for ignorance, I do not know other reasons, do you? But boy is that silly! That’s all the more astonishing, as you can criticize modern management practice for much, but not for not being analytical, measuring and evaluating enough. So how on earth do most organizations neglect to measure how their arguably most important resource is utilized, the worker itself?

I can’t see any other explanation then just blank denial of reality. This fear of managers to get to know what is really going on invariably leads to:

  1. the existence of a blind spot of a managers perception at a critical point
  2. an inability to learn and improve, and
  3. a severe economic underperformance.

If you know any other reason except ignorance or fear, dear reader, let me know. Fear of results, fear of feedback, fear of transparency, fear of impotence to do something with the results, fear of sticking one head’s out and being attacked by the rest of the organization for being seen to “weak on the worker.”

Yet I dare say that in 90% or more of organizations, employee engagement is not measured in any meaningful way. And if I say meaningful, I mean actionable. In some corporations, there is the odd HR survey, which results are never seen except at senior management level and with actions that rarely go farther than more investment in “one size fits all” team building,  work-life balance initiatives, or shallow employer branding exercises. Shallow and disingenuous actions at best which only achieve one result: These shallow, token actions based on pointless surveys make workers cynical over time.

It takes guts to face reality. And it takes an even greater manager to devise actions that improve things. The timid or impotent manager should stay away from measuring employee engagement. Let me explain.

Are you sure you can sustain an opportunity-rich work environment?

Motivation is the reason for people’s actions, desires, and needs. A strong motivation is a prerequisite for people to be highly engaged. Thousands of books have been written about motivation, as it is a complex, important and even crucial feature of work and life.

There is a critical caveat, which degrades the effectiveness of all motivational exercises drastically. It’s all good and well to be motivated, but all the motivation in the world is of no use if you do not have the chance to act on it. The Count of Monte Christo, in Alexandre Dumas novel,  might have been very motivated to take revenge, alas his motivation was not actionable until he got out of his prison cell.

Motivated employees face the same problem. They might arrive at the office all fired up after a highly energizing seminar or workshop. But all their motivation is worth nothing if they are not allowed to act on it.

Motivation plus action equals engagement. Motivation is worth nothing if not connected to action. Motivation itself is useless if a person does not have the opportunity to act on the motivation.

A managers job is to supply opportunities to engage. If a manager does not feel she or he can do that, measuring engagement is not needed at all.  It is a waste of money which only produces cynicism. Being a gutsy, daring manager only does damage if not backed up by competence – and a sufficient mandate to do things differently.

The IEQ – a practical way to measure engagement

The “Inclusion and Engagement Quotient” (IEQ) has been proposed by Henri Lipmanovic and Keith Candles in their 2014 book “Liberating Structures.”  While there are many ways and surveys to measure engagement, this survey has some advantages:

  • It is simple & efficient: Just 15 questions to ask
  • It is centered on engagement in meetings, not on who people feel about their jobs
  • Because of this focus on meetings, it is easily actionable

Besides that, it is aptly named IEQ, a combination of IQ (Intelligence Quotient) and EQ (Emotional Intelligence Quotient), two popular ways of thinking about individual resourcefulness. It’s just a name, I know, but it is catchy.

The IEQ is based on a standard list of questions that are to be answered in an anonymous survey, for example online via SurveyMonkey or any other polling tool. Each question is given with an ordinal ranking from 1 (never) to 10 (Always).  Here is the list of questions:

IEQ+1-3IEQ+2-3

The result of this survey can be pictured in a diagram depicting the cumulative percentage of people who are engaged (Y-Axis) and the one to ten rating level (X-Axis). For a typical low engagement company the curve would look like this:

IEQ

The total level of engagement of the surveyed group of people is the integral beyond the curve, which can be expressed as a percentage of the total space beneath the curve should all employees been fully engaged at level 10. A low engagement organization might have an engagement level of 20%, while a highly engaged one might be at 80%.

IEQ2

 

But there are significant downsides of the IEQ:

  • It lacks academic foundations. Basically, it has been created by its authors with the intention to show the potential that good meetings have over traditional ones
  • It is just about meetings, not about individual job conditions, the relationship to a manager or peers, or general organizational conditions
  • Each question is quite long and requires some concentrated reading

These are significant shortcomings Let’s contrast the IEQ to the Gallup Q12 survey, the “gold standard” of engagement surveys.

Alternative: Gallup’s Employee Engagement Study

Gallup, after “30 years of in-depth research involving more than 17 million employees” has settled on 12 questions to get to the heart of employee engagement:

1. I know what is expected of me at work.
2. I have the materials and equipment I need to do my work right.
3. At work, I have the opportunity to do what I do best every day.
4. In the last seven days, I have received recognition or praise for doing good work.
5. My supervisor, or someone at work, seems to care about me as a person.
6. There is someone at work who encourages my development.
7. At work, my opinions seem to count.
8. The mission or purpose of my organization makes me feel my job is important.
9. My associates or fellow employees are committed to doing quality work.
10. I have a best friend at work.
11. In the last six months, someone at work has talked to me about my progress.
12. This last year, I have had opportunities at work to learn and grow.

Like the IEQ survey, all questions are ranked on an ordinal scale and are to be answered anonymously. This, the “Q12 Survey” can be bought as a service online, directly from Gallup. The tool delivers all the neat looking graphics to illustrate the result.

Screenshot 2018-05-08 10.17.23.png

The downside of the Gallup study is that it is not very actionable. Now, Gallup would argue with that. As any fine consulting company, they have a list of proposed actions in store, for each and every point. But the thing is, it is the very holistic nature of the Gallup study that restricts its usability at work level. It gives a very good holistic view, but at the expense of specific insights into any of those categories. In other words: It serves the needs for information of the board better than the needs of the frontline manager.

Actionable vs. Holistic Survey: The Case for the IEQ

Therefore, if you are a first line manager, I suggest trying the IEQ. Its limited focus on the way the individual feels about her or his role in meetings delivers actionable results. Moreover, Meetings are where people discuss every important issue of whats going on in an organization. New, improved forms of running meetings, that result in more enagaged co-workers are a catalyst for improvement in every other field.

There are lots of other employee engagement surveys out there, provided by companies or academic institutions. To sum up, the points that I like to make is:

  1. Measure employee engagement. There is no excuse to neglect this
  2. If your company does not allow you to measure engagement or there is no chance of turning insight into action: Consider the odds of these impediments vanishing in the near future. If the odds are bad, consider quitting, as the work environment may be toxic.
  3. Use a survey that delivers actionable results. There is no point in measuring anything if learning is not followed up by actions

So do not be a wimp. Face up reality and measure employee engagement and do something meaningful with the results. 

It is true that people can be actively engaged no matter if engagement is measured or not. But it certainly casts no good light on an organization if it turns a blind eye to the question of employee engagement.

This is what I think. What do you think?

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Sources:

Let a Thousand Nerds Blossom!

Granted, liberating companies is the way to go in this Digital Age. For-profit, for innovation, for resilience, for the liberation of people – whatever – pick your motive. But how to pull off the Liberation? I think you need to weave your revolutionary tapestry of actions using 6 steps.

lc

Step 1: Plan & Adjust

The target is to build a high-performance organization, one that lets people engage and brings out their talents for the benefit of the organization and themselves.

The first step is to plan out this journey. I suggest planning on three levels: Mindsets, Habits, and Practices.

laa

You start with describing the Mindset the organization should show, according to the situation the business is in and where it (probably) needs to go. Next, you break these high-level mindsets down into a list of principles. A principle is a basic idea or rule that explains or controls how something happens or works. While coming up with principles, you will need to address each of the ten habits of liberated organizations and determine where your organization will take a stand, as explained in The 10 Habits of Liberated Organizations.

The third step is a bit easier, as it is more analytical: Choose the first set of liberated Management Practices that are by the principles. By practicing these new ways of engaging people, the organization and will work itself into a new mindset.

A word of caution: Do not copy any existing approach: Creating a learning organization requires building an agile mindset which can only be learned step by step. If you choose to copy an approach, chances are you, and your organization won’t be ready enough to sustain it.

By embracing new, agile, liberated management practices the final goal is not the practice. These will change and morph. All practices are just a way to create an agile mindset. Gaining a Growth Mindset is what a Learning organization is all about.

The important thing is:

  • Plan for the Mindset and the Principles you think your organization needs to embrace
  • Then, choose the first set of Liberated Management Practices that support those Principles and Mindset
  • Try out and implement those Liberated Management Practices.

Do not approach the new mindset directly, like a traditional change management effort would.

Instead, approach it from an oblique angle: An organization will work itself into a new mindset over time

 

Step 2: What to Liberate (next)?

Start with what you have and let it grow.  The “Capability Maturity Matrix for Liberated Organizations” might provide you with some orientation.

rI

Pick any of these dimensions or combinations as your next target. Then, pick some concrete Agile Practices to make the make the transformation tangible.

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Step 3: Decide on the Angle of Attack

Now that you know what to liberate, determine how to do that. Typically, in best piece by piece”elephant-eating” manner, some parts or practices of organizations go first, while others continue to operate as before.

AoA.png

You may choose to approach the liberation from multiple angles. For example by selecting a unit that advances in their management practices, while the whole organization is just trying out – for instance -new ways of meeting or delegating. Or you might set up a community of interest who act as change agents in whatever parts of the organizations they happen to be, and let them conduct experiments of their own choosing. Every approach is valid, every combination can be helpful, according to local circumstances. To know more, have a look at Joost Minaars Post on Corporate Rebels.

But do yourself a favor and choose units or practices that face off to customers. These might be external or internal customers, it doesn’t matter. By making the Liberation outward looking you will achieve:

  • Much more significant business impacts, as most value is created on the interface with customers
  • much more sticky results, as chances are that the customer will like what the new way to collaborate
  • that the Liberation initiative has a lower chance to bog down and degenerate into just another corporate meta-exercise: Well meant, but not crucial. The Management fad du jour that may be ignored.

Step 4: Establish a clear Schwerpunkt

Now that you know what and where to attack, muster your forces and concentrate them with explicit focal attention on the point of decision. In other words, don’t do a bit of all, instead do a few things that really matter, decisively.

What is decisive in a Liberation? Well, as in any other Revolution it is getting to the Tipping point: Making people stand up for the new status and sweep away the status quo. Create a momentum that makes the Liberation self-sustaining. Luckily, Malcolm Gladwell as some advice for this.

tipping

Here is some guideline how to set a Schwerpunkt in an organizational transformation:

  1. Set the Schwerpunkt where decisive results can be expected. The stronger the business need or historical trend or chance, the better.
  2. Do not try to energize any groups with more than 150 people. The more anonymous the team gets – and it empirically research that people can not make that more than 150 somewhat meaningful relations –  the more energy will dissipate into the realm of corporate entropy. Keep the target population small, and the social dynamic will drive the change effort forward.
  3. Gather and keep a close circle of change agents nearby you. Focus your attention (and time!) on these promoters. Most valuable are people that are adept at connecting people with one another (“Connectors”), people that facilitate solutions (“Mavens”) and people adapt in convincing others (“Salesman”)
  4. Do whatever you choose to liberate in a high-quality fashion that captures hearts and minds of people. If working in the new liberated way creates new perspectives and experiences people will wake up, be energized and become promoters of the liberation effort themselves

Seeing the liberation as an exercise to create a “tipping point” is important. Other, more traditional change management practices won’t help much. After all, it’s a social movement that needs to strive towards these new ways to run a company. There are no things like command, control or cozying up to please the boss. Agile practices will always fail if it fails to capture hearts and minds of people. Agile is, at its core, a mindset

Step 5: Coordinate your Forces

These days KANBAN is used to track all kind of things in the Lean or Agile Community. So why not using it to coordinate the evolution of Management practices. I developed such a board for a typical, traditionally run company.

  • Only Management practices are shown on this board. This includes Leadership practices and some HR practices (Development, Hiring) as well as some systems which main intent is to coordinate work (mostly Workflow Systems)
  • Each Card on the board shows one managerial practice. There can be some overlap between practices, as the components of the realm of management are not as simple to define. It is rather impossible to have practices defined in a mutually exclusive or a collectively exhaustive manner. Do not crazy in over defining. Embrace ambiguity instead.
  • Each column indicates which state a management practice is in. On this board, it’s either part of the organizational DNA or a new initiative which is somewhere on the horizon or something in the implementation

A Company Board of Managerial Practices

Have a look at an example. Maybe the kind of organizational DNA that this (actual) company has sounds similar to your (traditional) organization.

COB.png

As I worked to fill the board, I struggled to come up with new management initiatives that are currently being tried in this sample organization. It is actually quite shocking that nothing much is going on regarding new or revised management practices. Isn’t the digital revolution out there? Isn’t it time to raise hell and get the f..ck going with changing management and leadership practices? So why are so few things to be listed in the two leftmost columns?

I think the reason is that this company, and others, are first of all way to static in general (a result of the formalistic hierarchy) and second, companies tend to work on the wrong things. Lots of people still believe that digitalization is about fancy new IT Systems, so they are working on those, with lots of people and lots of time.  I think there are two reasons for this:

  1. To mistake Digitalization for IT is an easily understandable misperception. The deeper workings of Digitalization,i.e., experimenting, accelerating, making sense out of data, allowing failure, let a thousand Nerds blossom, sense-making which re-engages workers to the cause of the customer
  2. By spending all this money on Systems and Business Processes, no one is really threatened. The Internal hierarchy stays all the same. Noone needs to shift her or his mind to the digital age. Noone needs to change behaviors. Spending money is easy. Shifting Worldviews and Habits are hard.

But you know what? Revolutions are tough. And the Revolution is here and real. Now. So better get going.

Liberation Board

Here is what a Liberation Board for a progressive company could look like. This company does the hard but vital stuff and changes its managerial practices and (thereby) mindsets. This board is not based on a waterfall view of transformation (e.g., Plan, Implement, Operate), but on an evolutionary view of the company and its managerial practices: Practices are experimented with, modified until shelved or proven and then scaled.

libboard.pngBy viewing managerial practices as evolutionary results that may stay, change or die according to the needs of an organization, the organization is transforming on its deepest level. The level that governs the relations between all people in the organization and its customers, too.

Any evolutionary learning model can be used for this. Kata‘s, the Deming PDCA Cycle or the OODA Loop. Personally, I favor that the OODA loop. The ODODA loop has been invented by John Boyd, a trainer of elite fighter pilots in the US Top Gun Program. And that alone makes it makes it my favorite. Deming (PDCA) and Taichii Ohno (Kata) were engineers. Nothing against engineers, but to pull off a corporate revolution, I am going with the fighter pilot.

ooda.png

To learn more about the OODA loops origin, check out Taylor Pearsons Post.

Picturing the transformation on a Kanban Board has many advantages:

  • It visualizes status and progress
  • It communicates who is working on what
  • People can choose to volunteer to experiment or scale with this or that initiative. They do not necessarily need to be assigned
  • It helps to keep the number of changes (the WIP “Work in progress” under control)

Last, not least it spells out the organizational DNA explicitly. Of course, this requires a lot of openness, which is tough, as it lays open the hard assumptions that managers have about people: Tell me how you manage people, and I tell you what your attitude you have about them.

If a company is just beginning its journey towards liberation, there will be the natural and tactful tendency to sugarcoat things. After all, some kind of consensus needs to be built about the transformation of the company to a liberated model or organizing. You got to start somewhere, over time trust and openness, even when it comes to talking about weaknesses and vulnerabilities, will increase.

Step 6: Set-up Overwatch

The Liberation effort needs to be organized with a team driving it, and informed and active agents in the organization.

6st.png

Prepare

The first step is to prepare the cut-over, by deciding on the rationale and the scope of the overall liberation effort. Steps 1 to 6 of this post provide a good guideline for this.

Orient

Second, all colleagues need to be involved. They need to understand that they, from now on and more and more, are invited to work in a different, more liberated manner. To list the current management practices is a good starting point.

Next, make clear what the limits are. Some practices like negotiating salaries or significant investment decisions might not be on the list of practices to liberate. Designate the practices that may be liberated if people choose to do so.

Not only the choice which practices to liberate is up to the colleagues. They need to have a say if a unit wants to transform certain or any management practices at all.  Pushing down management practices on people is likely to be counterproductive: Enforced liberation is tyranny. People need to actively opt for liberated practices.

Start

After co-workers have understood the intention of the Liberation effort and their unusual strong say in this effort, compared with all other conventional corporate change initiatives, it is time to try out different liberated management practices. By doing this, people and the organizational units work themselves into new behaviors and mindsets. As a result of this, people start to experiment with more advanced practices and pull those inside the organization, too. A positive feedback loop will drive the revolution forward.

To have a dedicated transit team, that supports the rest of the organization in this, is very useful here. On the tool side, the Liberation KANBAN Board can be helpful in planning, monitoring and coordinating the effort.

Scale

To scale liberated management practices is unlike traditional scaling methods. Traditionally a standard is set for, let’s say the way a store operates or an IT system works. This standard “Template” of processes and systems is then trained and imposed on an increasing number of stores or business units. There is not much of a say that the targets of “Roll-outs” have.

To become a more liberated company by imposing things won’t work. Scaling liberated practices means to offer colleagues to come forward and drive things. It is an offer, that can be turned down. Naturally, there will be some units or groups of people who actively pull in new practices. If those are better than the old management practices, the chances are that more reluctant units will follow. This process might take months or even years, depending on the size of the company.

Develop

The final stage is not a static one. It is one where the company keeps on adapting to changing customer needs and the business environment. It is forever evolving through implicit or explicit experimentation (using, for example, the OODA Loop). It is forever seeking to learn and improve.

Let Thousands Nerds Blossom

The last sentence sounds like an incredibly high aspiration. But I am not saying that the company will forever optimize itself and find a new optimal state with every challenge thrown at it. That would be unrealistic since social forms of collaboration have a certain degree of stickiness, too. They won’t always be optimal. In many cases, they will just muddle through, just like hierarchies do.

But with the right degree of stewardship, a servant leader, a Gardner- like attitude to leadership, a lot of trust, that lets everyone open up and speak up, liberated companies will be much better positioned to deliver better business results in an ever-changing world.

After all, evolution is all about survival of the fittest. Dinosaurs had there time until some nimbler competitors took over. In a digital, knowledge-driven economy we need liberated organizations that let “A thousand Nerds blossom”.

This is what I think. What do you think?

Sources

 

Management Debt and Organizational Entropy

Do you know the fundamental value proposition of Organizational Research? This value proposition is the very reason why theoretical and empirical research in this field is done at all, why a record number of business books are published today, why magazines like Harvard Business Review exist:

hauschildt.png

A simple as it is, this statement stayed with me for all these years. How many organizations have you seen, that are “historically grown” or outright dysfunctional instead of being planned? How many managers did you ever meet who where just administering their areas, without ever conjuring up the willpower or taking the risk to better things, to even try to sketch out a better state for their organization? Chances are, you met a lot of those.

“A planned state of an organization is more effective than an unplanned one”: This statement is a call to action, that sends you on a never-ending mission to think ahead and try things. For me, it’s a call to have a mission, to be one step ahead. To continually hone your organization.

Granted, it’s not as bold as Facebooks Mark Zuckerberg “Move fast and break things” motto. It’s more down to earth. Coming from Jürgen Hauschildt, who has been a renowned professor within the German-speaking countries, it carries special weight for me. Mr. Hauschildt specialized in “Innovation Management,” wrote a highly successful book on that subject which is with its 6th edition still in distribution today. Mr. Hauschildt was a significant proponent of empirical organizational research. He accepted no truth, just because it was theoretically plausible, everything had to be tested with hypothesis, experiments, tests and statistical analysis until proven.

Of course, that’s just basic science. But as most business books, especially the successful ones, reflect opinions and narratives, but not empirical, data-driven scientific analysis, Mr. Hauschildt’s style of work is needed today as ever.

Yet, most managers fail to take a scientific perspective of an organization. Managers are pragmatists. They do not have time to be scientists.

For Managers “betterment-now” beats “optimum-never”.

That’s all right and fair. Here is the problem with this: Most Managers do not have a holistic view or understanding of their job. They think of betterment as to solve an immediate issue – but lacking a holistic perspective, sometimes even on their part of the organization-  they tend to come up with solutions that may have severe tradeoffs in areas where they are blindsided. 

The Blind Sides of Managment

When about Organizations, we tend to think about the, what Harvard Professor Robert Kegan calls, the Exterior of an Organization. But there is more to an organization which needs to be planned:

mffo.png

Quadrant 1: Exterior view of Organizations

This is what springs to mind when thinking about organizations. These are all the usual stuff we think of as managers and organizers. They are tangible, written or at least practiced rules and processes.

Quadrant 2: Exterior view of Individuals in an Organization

These are the responsibilities, roles, problems, and tasks that individuals in organizations are faced with. It is the individuals understanding of his role in an organization, her day to day job.

The individual’s view of a job is determined by Quadrant 1: All rules and processes defined have repercussions on individuals day to day work. Every intrusion that restricts the local autonomy to act impacts the way people view their job. Every purchasing guideline, every management approval, every assignment, every project, every HR regulation.

Quadrant 3: Interior view of Organizations

These are the nontangible, harder to see aspects of an organization. This Quadrant is usually described as the organizational culture, i.e., “the way we do things here.”

Organizational Culture is notoriously hard to change. According to Peter Drucker, “Culture eats Strategy for Breakfast.”

Screenshot 2018-01-04 08.45.34

(credits for this picture goes to Torben Rick)

Yet with everything, a manager organizes and regulates, culture is changed. At the same time, Culture restricts what regulation from Quadrant 1 is being made and determines what regulation will be successful.

Quadrant 4: The “Psychology” Quadrant

The Interior view of Individuals, that’s the trickiest quadrant of them all. It’s the things that like beliefs, values, fears, and vulnerabilities that are hidden in everyone. It’s psychology, it’s neuronal science, i.e., the way the brain works.

Everything an individual does, in any quadrant of the organization, is governed by Quadrant 4. Yet managers often neglect the impacts of their actions on the psychology of people.

Historically Managers are Administrators, not Psychologists.

Why do Managers need to learn about their blind spots?

Management’s goal is to achieve optimal outcomes “in the transformation of resources into utility,” a definition used by Management thinker Fredmund Malik.

For knowledge work, that “transformation of resources into utility” can only be optimized, if managers are able to plan ahead for the next state of an organization – not on just Quadrant 1, but on all four quadrants. The individual’s state of mind might not have been critical in a command and control coal shoveling steel mill, but it sure is of central importance in today’s knowledge economy.

All the hard facts, the rules, and regulations set in Quadrant 1 determine all other Quadrants, but most the Individual, Micro level of an organization.

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Of course, all Quadrants are somewhat interdependent. Still, Quadrant 1 is much more easily changed by a rational process, as everything in it can be much better controlled and measured. The Organizational level sets the frame for each individual, where else the individual is much less powerful to change the collective, notably the lower she is on the corporate ladder.

Blindsided managers let their organizations incur Managerial Debt by choosing ways of working that appear to work on an exterior level, but destroy the interior side of the organization (by undermining trust, disengaging people, treating them like children etc.):

  • Managerial Debt accrues over time: Disengagement of workers will cause products, service and finally profits to degrade over time.
  • Like accrued interests, bad managerial solutions will cause new bad managerial solutions to spring up over time
  • Unaddressed management debt increases organizational entropy overtime: Energy that is lost to the void: Filling out reports that no one needs. Doing Approvals that no one approving understands. Never working on fundamental issues but only on patching up the mistakes of the flawed organizational system

Managers need to become Engineers of all Dimensions of Human Work Environments

In this VUCA (volatile, uncertain, complex, ambiguous), knowledge-driven and the ever more digital world, Managers need to become just that: Engineers of human work environments.

Robert Kegan, calls this mission to built a “Deliberately Developmental Organization,” a Learning Organization. Shockingly, a learning organization needs the manager to become a teacher or Unversity decan who does two things:

  1. Set a curriculum of what is to be learned
  2. Engage in Pedagogy (the science of learning) to optimize the rate of learning

Now Managers need to get a better understanding of psychology and pedagogy, too. An even major challenge. But a challenge that can not be ignored in our times. Times, where the Agile Mindset and Agile Management Practices appear to be the way forward for organizations.

That’s a challenge that Jürgen Hauschildt,  would have eagerly taken up.

That’s what I think. What do you think?

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Sources:

 

76 Agile Workouts & A Fish

The number of Agile organizational practices can leave you bedazzled: What is this practice for? When to apply it? What is the primary target of the practice? Here is a map that should provide some orientation.

Why use Agile Practices?

Agile practices work like your personal fitness work-outs: They change the organization over time if deliberately practiced. They increase organizational fitness over time. In other words: They increase the maturity level of an organization over time.

Thereby, they are offering a bottom-up avenue to organizational change: Pragmatic change which can be initiated by everyone in the organization, not just high ranking managers. There are only really two ways how an individual without management power can change an organization:

  1. By changing her personal attitude, work style and behaviors or
  2. by proposing, trying out and adopting new practices how to collaborate with others.

Sources of Agile Work-outs

A lot of people have recognized the value of Agile Work-outs, for example:

And there are many more sources of Agile Methods. Just take the king of all Agile project methods, SCRUM, which contains dozens of practices which can be used even outside the context of projects and in an organizational context instead. Like the “Daily Stand-up Meeting” with its three round-robin questions to every team member:”What did you do? What will you do? What are your problems?”.

It is possible to extract practices of Self-Managed Organizations such as Holacracy or Sociocracy, too. Just like SCRUM, these are systems of management which rely on some practices and principles. Why not reusing some of these practices in different contexts?

A Map of Agile Work-outs

The number Agile Work-outs can leave you bedazzled (some online source can be found in Resources). Here is my attempt to bring some order into this chaos by ordering them by three criteria:

  1. Maturity Level of an Organization: In the last post I came up with a “Capability Maturity Matrix for Liberated Organizations,” a simple 4 level ranking that provides orientation about the maturity level, that the work-out should be best used in. Basically, the higher the maturity level, the more decentralized decision making is.
  2. Severity: A somewhat subjective measure of risk and the number of requirements this work-out has. Severity has some correlation to the potential benefit this workout might have, but benefits really depend a lot on situative factors, where else increased severity represents the chance that the work-out will fail and backfire.
  3. Category: These are loosely based on criteria used to describe classical management theories, such as those of Peter Drucker or Fredmund Malik.

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As Agile Workouts come from many sources,  in many flavors,  and in plenty of variations there are no standardized names. As I drill down the Agile Workouts by category, you will find a short description in the tables below. For more detailed references, please check out the “Resources” page.

Agile Workouts for Control

Hundred years ago, the Art of Organizing had been described by Max Weber as seeking an optimal balance between specialization and coordination: The more you specialize, the more the need for and the costs of coordination increases.

In more liberated, self-managed companies, the need for coordination remains, but coordination is achieved by other means. While Coordination is decentralized, the most potent form of coordination, control, remains necessary.

Control is achieved by a multitude of factors, as for example managerial oversight, social control by co-workers which crowds-out managerial control, target agreements, and Meeting routines. And control can be enhanced explicitly by adopting one of the Agile work-outs listed in the table below.

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I won’t explain every single Agile Work-out. But I hope you get a hunch what the work-out is about from reading the short description in the table. To find out more, you have to refer to the listed source.

Instead, I will just mention my favored Work-put in each category. In the Control-Category, I really like Self-service targets, as it invites people to reflect, think about what they can achieve on their own, and creates more commitment than goals set by superiors.

Agile Workouts for Feedback

To paraphrase Harvard Professor and developmental psychologist Robert Kegan: “A learning organization is an organization saturated with learning.” Every feedback given is a learning opportunity.

Giving positive feedback might happen too seldom, but is easy to do. Providing feedback that criticizes is much harder and requires a relationship built on trust.

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My favorite of this category is Moving Motivators. A Card based, simple game where everyone ranks value and simultaneously explains her reasoning. In a second round, everyone explains how a particular change would impact her values. This is a great way to get to know one another, discuss a proposed initiative. It will pay dividends to every team over a long time.

Agile Workouts for Learning

Learning is, arguably, the most central thing in an Agile Organization or a Start-up. Naturally, there are lots of Workouts centered on Learning.

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My favorite is Pairing and Job Shadowing. Two people working on a single task or job can give surprising insights, productivity improvements and creates ideas on a personal level. Its apparent inefficiency is what makes it so compelling. Pairing is the crucial ingredient to agile software development approaches as eXtreme Programming, but it works fine outside software development, too.

Agile Workouts for Organizing

Organizing means structuring work. And if there are less and fewer ways a manager can do that competently, there need to be agile exercises that help structure work on the meta level.

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Here I choose Mirroring. Just identifying a customer for an organizational entity, creating a clear line of sight from the coworkers to the customer creates the impetus to want to work for the benefit of the customer in every co-worker. Humans really want to do good for others. Often the way we organize is an obstruction to that.

Agile Workouts for Meetings

Where is the place where collective intelligence happens? It is the Meeting. Isn’t it shocking how little thought is given to organizations about how meetings are run?

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I have an emotional attachment to “Benefits & Concerns,” as I have practiced that since I joined Capgemini Ernst & Young in 2001. I still use it. Nowadays, my favorite is Liberating Structures, which provides Meeting structures that couldn’t be more elaborate and simple.

Agile Workouts for Transparency

Transparency acts as a fertilizer to innovation: The more, the merrier.

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I admit I am a transparency freak. I like them all! But if I need to choose, I go for KANBAN for its universal usefulness and supplement it with Trello, an App for any distributed teams and/or Jira, for bigger teams.

Agile Workouts for Decision Making

Who calls the shots? With increasing maturity of the organization, decision making is more and more decentralized. These Work-outs highlight how.

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My favorite is the Delegation Board.

But what I really want to try someday is the real fancy stuff”Believability weighted decision making.”

Agile Workouts for Human Resources

There are no norms for classifying Agile Workouts from other Organizational practices. Out of the plethora of HR practices, I found this bunch especially interesting.

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I really admire doing things in HR based on data, just as described in Lazlo Bocks, who is the HR director of Google, book. Therefore my favorite work-out is Candidate Testing by giving out small and tests that are relevant to the position, that the applicant is supposed to solve. This allows so much more profound insights than any number of interviews by any number of people. It is indeed astonishing how much we oversee by talking to people and how much we reveal if we see a person working to solve a problem.

Agile Workouts for Projects

Well, there are a lot of project methods and methods for projects out there. I won’t include them here, except the two significant Methodologies of SCRUM and conventional Waterfall projects. Both methods contain innumerable amounts of work-outs themselves.  But this Blog is focused on the organizational side of Agile.

I think there are enough sites covering agile or any other type of project management – and too few sites covering management structures and routine that allow such excellent Methods like SCRUM to shine.  SCRUM runs optimally is embedded in a maturity level 3 organization. The trouble is, so many companies on level 1 and 2 try SCRUM and find it hard to digest.

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I like to highlight Value Poker here, as it is an excellent way for people to engage and delivers – empirically – the 2nd best accuracy of all estimating methods, behind the much more resource, time and effort intensive Delphi Method.

 

And what about the fish?

Ok, you have been served the 76 Agile Work-outs. Now you want the fish, don’t you?

As so often, headlines can be sooooo overpromising and underdelivering.  So here is my slightly fishy disclaimer:

  • Work-outs should be deliberately practiced and repeated. Do not expect one hit wonders. You need to practice, with deliberation and over time
  • Do not command a team to use a work-out. Propose it, try it, invite feedback and adapt.
  • Some work-outs work better in conjunction with others
  • Do not do too many workouts. You want your organization to work and not become a circus, I guess. Unless your organization is a circus. Hm.
  • You want to know why a particular Work-out is attributed to a particular Maturity level or severity? There is about zero academic rigidity beyond my personal judgment. So take it with a pinch of salt.

Finally, take your time to choose work-outs from higher maturity levels if your organization is still at a low level. Think of your role like being a Gardner of the organization:  Give things – like e.g. trust – time to grow.

This is what I think. What do you think?

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Note: I have excluded Innovation Techniques(e.g. 6 Hats, Design Thinking)  and Coaching Techniques from this post.  Sometimes it’s hard to distinguish what is an agile management workout, and what is an innovation or coaching techniques, tough.

Sources can be found on the Sources and (revamped) Resources page.