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A Recipe for High Performance: Combine Tough Accountability & Wise Fairness​​

Do you believe in the following three sentences?

  • Hire the best people, give them clear goals, give them the authority to achieve those goals, and then you get out of their way
  • Accountability is holding someone’s feet to the fire
  • If everybody is responsible, nobody is responsible

A company is a Sociotop of performers and slackers, introverts, and extroverts, engaged and apathetic, liers and uprights.  In this wilderness you want people to be motivated and engaged. The first step is to hold any of these personality types accountable for results.

Accountability is an Individual Commitment

Accountability is a necessary condition for any form of organization to succeed. One of my all-time favorite probing questions is “Who is feeling accountable?”:

  • If no one is feeling accountable, get one. Getting someone accountable is more than just assigning accountability. The person must feel a sincere desire to live up to that accountability – the person must commit as wholeheartedly as possible
  • If no single person is feeling accountable, get one person accountable. Shared responsibility – a shared urge to achieve something- is valuable and should not be done away with. Still, if push comes to shove individual responsibility is much more powerful in most situations
  • If no one can be pinpointed to be accountable, the solution is often not to declare a critical thing that must be achieved a shared responsibility but to redefine the problem to a higher level of abstraction. Usually, this means giving out a broadly defined mission and leaving the way how the work is done to the accountable person

This is a recipe for organizational success that has been proven and proven again since time immemorial. Individual rewards and punishment are still vital, even in the digital revolution.

Making Teams Accountable

In classic organizations, that are high on hierarchy and low those structures supporting self-management, making teams accountable does not work. There is simply not enough alignment of purpose, not enough trust and relationship capital around to make shared commitments work.  Therefore, a manager and not a group is made accountable for any more significant task.

In more self-managed organizations, that have invested in the 10 Habits of Organization,  making teams accountable becomes a real option. The need for accountability does not go away, but a team pledge becomes as good as an individual pledge to perform.

Making teams instead of individuals accountable is an option, once a high level of maturity, say level 3+ on the scale of liberated organizations is achieved (see 4 Steps to Release the Full Potential of Organizations).

An Accountable Environment is a Tough, Results-Oriented Environment

Holding people accountable is a tough job: Using carrots and sticks in a manner that benefits the organization, in the long run, is an art. It requires personal impartiality, empathy, and a long-term perspective.

Rewards and punishment do not need to be material (e.g., money or career progress). Often immaterial rewards and punishments work better. Even the pain of having other people let down might be significant punishment for some people. Turn up the heat by highlighting that failure through individual feedback or a team based post-mortem session. The same goes for rewards. There is power is the simple act of giving praise for good work in public.

It takes an active, engaged manager or co-worker to do the straight-talking. But that is the essence of holding people accountable. In traditional settings, managers are somewhat left to their own devices to do this. In more liberated organizations structured meeting formats (76 Agile Workouts & A Fish)  help to deliver feedback regularly, in an environment where it is ok to talk about feelings and failure.

There is No Good Alternative to Tough Accountability

I challenge you to think of any workable alternative to accountability. Taking away accountability means that you end up with two scenarios:

  • Seldom: Hippy island, campfire Comfort Zone where people have a good time, and nothing gets done
  • Most of the time: Working zombies, 9 to 5, “I am in for the money,” Apathy Zone where people have a bad time and work results are uninspiring

There is no alternative to high accountability in human groups that want to achieve something of higher value. But Accountability alone is not enough. It must be combined with Fairness, or as Edmondson puts it “psychological safety”: A climate where people feel free to express relevant thoughts and feelings. 

Harvard Business School Professor and psychologist Amy Edmondson sums up the zones in a matrix.

4zones.png

Tough guys, this might come as a shock to you: Psychological safety is universally recognized in the academic literature as being the most fundamental requirement of high performing teams.  It’s the number one of the 5 criteria that make a good, high performing team (see Good Managers – Good Teams: Lessons from Google).

 

Beware of Fear induced Accountability

Accountability can be created by fear.

Harsh punishment of failures, by firing, demoting or shaming persons fosters accountability, which is a good thing – is it not? People will certainly take care not to let their responsibilities slip again. This recipe for accountability has been tried successfully over thousands of years.

And no, strengthening accountability by instilling fear is not a good thing. By focussing single-mindedly on accountability  and employing the methods of fear, people will:

  • Cease to speak-up
  • Cover up failures
  • Choose unambitious, risk-free targets
  • Seek to keep in the shadows: hiding at their desks
  • Feel the emotional costs

Accountability is tough, and it needs tough actions – but fear will kill off innovations, learning, and performance.

Combine Fairness with Accountability

Instead of using fear with all its unintended collateral damage, use fairness. Fairness in the organizational, managerial context has three practical dimensions:

A. Distinguish the type of failure

A punishable offense is any failure that is not based on well-intended efforts. The more complex or experimental work-environments are, the more failure is unavoidable. Alas, with the digital revolution work is getting ever more complex and experimental. That means that failure should even be rewarded, as long as the effort was well intended. Thereby risk-taking is incentivized, a fundamental requirement for any entrepreneurial organization.

B. If faced with a failure, be proportionate 

Small failures should be embraced as opportunities to learn. Learning occurs through feedback or group reflections with the target of understanding the root cause. Some failures are just a fact of life and can’t be prevented in future, but the totality of all failures an organization makes gives it a good chance to learn and improve.

Big failures are bad. But even those should be framed as opportunities to learn. Consequences need to follow and might be harsh, but always based on the factual, cool-headed analysis of what is to be done to prevent or mitigate those in the future

The credo of iterative ways of working is powerful in that context. By working iteratively towards a target, in small increments, failure can be held small, and learning is immediate. The number of big failures can be reduced. That is the very concept of agile projects methods such as SCRUM or modern Start-up methodology (e.g.,missiles Lean Start-up).

C. Be impartial

Handling failure is always nasty for everyone involved. For a manager (or a self-managed team) this means the willingness to face the facts and dish out the hard truth in an impartial manner.

It takes courage to stand proud and upright on the deck in times of failure and crisis. But standing on the deck, you must, in order to direct the ship.  

Even in more liberated organizations, this courage is hard to summon. On the one hand, the level of trust and caring enables much more insight, but on the other hand, people are reluctant to act cool, analytically towards people known well to them.

When it comes to privacy and accountability, people always demand the former for themselves and the latter for everyone else. (David Brin, Author)

Yet Fairness means different things to different people. Like Truth, fairness is often a high minded concept, as Rawls has shown. In the toolset of Liberated Organizations some tools help to push things towards fairness:

  • The way feedback is given and built into daily work routines
  • The way work is transparent
  • The way meetings are run in an inclusive manner
  • The way teams are set up to resolve tensions themselves
  • The true north that a hierarchy of purpose gives each team and the whole organization

Nothing might be ever genuinely fair. But by building in management practices that implicitly foster fairness, the sense of fairness can be increased for everybody.

The Learning Zone

This is where high accountability meets high psychological safety.

A workplace is the more psychologically safe, the more a team member would agree with the following statements:

  • If you make a mistake on this team, it is dealt with constructively
  • Members of this team are able to bring up problems and tough issues
  • People on this team sometimes do not reject others for being different
  • It is safe to take a risk on this team
  • It is not difficult to ask other members of this team for help
  • No one on this team would deliberately act in a way that undermines my efforts
  • Working with members of this team, my unique skills and talents are valued and utilized

In short: A climate where people feel free to express relevant thoughts and feelings is one where the perceived chances of being yourself and straightforward, without being subject to negative consequences, are high.

Intellectually leaders may endorse psychological safety and the voice and participation it enables, but it is difficult to forgo the raised voices or angry expressions that signify dominance. And for the coworkers is more natural to flee into the safety of silence.

Psychological safety does not imply a cozy environment. On the contrary: Make an environment too cozy and groupthink follows and performance drops.  There is a natural tendency to end up in a comfortable environment once you encourage psychological safety. We are primed by Evolution to value warmth, trustworthiness, and morality more than competence. Evolutionary, the intents of others are more critical for survival than the other’s competence.  People with evil intends are more dangerous than incompetent humans. Still, America, you shouldn’t let a world-class incompetent get access to missiles that could destroy the world several times over…

The Learning Zone:

  • It’s safe to speak up
  • It’s safe to admit failures
  • It’s safe to ask for help
  • Every failure is framed as an opportunity for learning
  • But consequences are still tied to results, especially if the effort has not been well-intended

How to Change from one Zone of Engagement to Another

The Apathy Zone is the one dominating most companies today. With disengagement at about 85% of the workforce (according to a yearly, long-term global Gallup study) withdrawal is rampant. Whats even worth, this disengagement level is not different between work and management level: Only 15% of Managers are engaged.

4za

So what is to be done to engage workers and get them out of the Apathy zone?

  • Moving an organization towards a comfort zone does not engage anyone. It helps social well-being, but not economic results.
  • Using fear to spur people into action is much more effective. Results will come from management by the time-proven approach of management by fear. There is a human cost to this, but economic results will improve compared to apathy or comfort.
    The trouble is: The more an organization needs to use the intelligence, creativity, and willingness to experiment and improve the status-quo, the less able management by fear is able to produce positive results. Management by fear violates the fundamental foundation of high performing teams: Psychological safety.
  • The silver bullet is to use the principles of Liberated Organizations (The 10 Habits of Liberated Organizations) to get from Apathy, with low Accountability and low psychological safety, to high Accountability and high psychological safety.
    The downside is: The path towards high accountability and psychological safety is a journey. It can’t be done at once and has to be done in a process. Waypoints for this journey are the maturity levels of Liberated Organizations (see 4 Steps to Release the Full Potential of Organizations)

cm.png

This is what I think. What do you think?

___

Sources:

A Recipe for High Performance: Combine Tough Accountability & Wise Fairness​​

Do you believe in the following three sentences?

  • Hire the best people, give them clear goals, give them the authority to achieve those goals, and then you get out of their way
  • Accountability is holding someone’s feet to the fire
  • If everybody is responsible, nobody is responsible

A company is a Sociotop of performers and slackers, introverts, and extroverts, engaged and apathetic, liers and uprights.  In this wilderness you want people to be motivated and engaged. The first step is to hold any of these personality types accountable for results.

Accountability is an Individual Commitment

Accountability is a necessary condition for any form of organization to succeed. One of my all-time favorite probing questions is “Who is feeling accountable?”:

  • If no one is feeling accountable, get one. Getting someone accountable is more than just assigning accountability. The person must feel a sincere desire to live up to that accountability – the person must commit as wholeheartedly as possible
  • If no single person is feeling accountable, get one person accountable. Shared responsibility – a shared urge to achieve something- is valuable and should not be done away with. Still, if push comes to shove individual responsibility is much more powerful in most situations
  • If no one can be pinpointed to be accountable, the solution is often not to declare a critical thing that must be achieved a shared responsibility but to redefine the problem to a higher level of abstraction. Usually, this means giving out a broadly defined mission and leaving the way how the work is done to the accountable person

This is a recipe for organizational success that has been proven and proven again since time immemorial. Individual rewards and punishment are still vital, even in the digital revolution.

Making Teams Accountable

In classic organizations, that are high on hierarchy and low those structures supporting self-management, making teams accountable does not work. There is simply not enough alignment of purpose, not enough trust and relationship capital around to make shared commitments work.  Therefore, a manager and not a group is made accountable for any more significant task.
In more self-managed organizations, that have invested in the 10 Habits of Organization,  making teams accountable becomes a real option. The need for accountability does not go away, but a team pledge becomes as good as an individual pledge to perform.
Making teams instead of individuals accountable is an option, once a high level of maturity, say level 3+ on the scale of liberated organizations is achieved (see 4 Steps to Release the Full Potential of Organizations).

An Accountable Environment is a Tough, Results-Oriented Environment

Holding people accountable is a tough job: Using carrots and sticks in a manner that benefits the organization, in the long run, is an art. It requires personal impartiality, empathy, and a long-term perspective.
Rewards and punishment do not need to be material (e.g., money or career progress). Often immaterial rewards and punishments work better. Even the pain of having other people let down might be significant punishment for some people. Turn up the heat by highlighting that failure through individual feedback or a team based post-mortem session. The same goes for rewards. There is power is the simple act of giving praise for good work in public.
It takes an active, engaged manager or co-worker to do the straight-talking. But that is the essence of holding people accountable. In traditional settings, managers are somewhat left to their own devices to do this. In more liberated organizations structured meeting formats (76 Agile Workouts & A Fish)  help to deliver feedback regularly, in an environment where it is ok to talk about feelings and failure.

There is No Good Alternative to Tough Accountability

I challenge you to think of any workable alternative to accountability. Taking away accountability means that you end up with two scenarios:

  • Seldom: Hippy island, campfire Comfort Zone where people have a good time, and nothing gets done
  • Most of the time: Working zombies, 9 to 5, “I am in for the money,” Apathy Zone where people have a bad time and work results are uninspiring

There is no alternative to high accountability in human groups that want to achieve something of higher value. But Accountability alone is not enough. It must be combined with Fairness, or as Edmondson puts it “psychological safety”: A climate where people feel free to express relevant thoughts and feelings. 
Harvard Business School Professor and psychologist Amy Edmondson sums up the zones in a matrix.
4zones.png
Tough guys, this might come as a shock to you: Psychological safety is universally recognized in the academic literature as being the most fundamental requirement of high performing teams.  It’s the number one of the 5 criteria that make a good, high performing team (see Good Managers – Good Teams: Lessons from Google).
 

Beware of Fear induced Accountability

Accountability can be created by fear.
Harsh punishment of failures, by firing, demoting or shaming persons fosters accountability, which is a good thing – is it not? People will certainly take care not to let their responsibilities slip again. This recipe for accountability has been tried successfully over thousands of years.
And no, strengthening accountability by instilling fear is not a good thing. By focussing single-mindedly on accountability  and employing the methods of fear, people will:

  • Cease to speak-up
  • Cover up failures
  • Choose unambitious, risk-free targets
  • Seek to keep in the shadows: hiding at their desks
  • Feel the emotional costs

Accountability is tough, and it needs tough actions – but fear will kill off innovations, learning, and performance.

Combine Fairness with Accountability

Instead of using fear with all its unintended collateral damage, use fairness. Fairness in the organizational, managerial context has three practical dimensions:
A. Distinguish the type of failure
A punishable offense is any failure that is not based on well-intended efforts. The more complex or experimental work-environments are, the more failure is unavoidable. Alas, with the digital revolution work is getting ever more complex and experimental. That means that failure should even be rewarded, as long as the effort was well intended. Thereby risk-taking is incentivized, a fundamental requirement for any entrepreneurial organization.
B. If faced with a failure, be proportionate 
Small failures should be embraced as opportunities to learn. Learning occurs through feedback or group reflections with the target of understanding the root cause. Some failures are just a fact of life and can’t be prevented in future, but the totality of all failures an organization makes gives it a good chance to learn and improve.
Big failures are bad. But even those should be framed as opportunities to learn. Consequences need to follow and might be harsh, but always based on the factual, cool-headed analysis of what is to be done to prevent or mitigate those in the future
The credo of iterative ways of working is powerful in that context. By working iteratively towards a target, in small increments, failure can be held small, and learning is immediate. The number of big failures can be reduced. That is the very concept of agile projects methods such as SCRUM or modern Start-up methodology (e.g.,missiles Lean Start-up).
C. Be impartial
Handling failure is always nasty for everyone involved. For a manager (or a self-managed team) this means the willingness to face the facts and dish out the hard truth in an impartial manner.

It takes courage to stand proud and upright on the deck in times of failure and crisis. But standing on the deck, you must, in order to direct the ship.  

Even in more liberated organizations, this courage is hard to summon. On the one hand, the level of trust and caring enables much more insight, but on the other hand, people are reluctant to act cool, analytically towards people known well to them.

When it comes to privacy and accountability, people always demand the former for themselves and the latter for everyone else. (David Brin, Author)

Yet Fairness means different things to different people. Like Truth, fairness is often a high minded concept, as Rawls has shown. In the toolset of Liberated Organizations some tools help to push things towards fairness:

  • The way feedback is given and built into daily work routines
  • The way work is transparent
  • The way meetings are run in an inclusive manner
  • The way teams are set up to resolve tensions themselves
  • The true north that a hierarchy of purpose gives each team and the whole organization

Nothing might be ever genuinely fair. But by building in management practices that implicitly foster fairness, the sense of fairness can be increased for everybody.

The Learning Zone

This is where high accountability meets high psychological safety.
A workplace is the more psychologically safe, the more a team member would agree with the following statements:

  • If you make a mistake on this team, it is dealt with constructively
  • Members of this team are able to bring up problems and tough issues
  • People on this team sometimes do not reject others for being different
  • It is safe to take a risk on this team
  • It is not difficult to ask other members of this team for help
  • No one on this team would deliberately act in a way that undermines my efforts
  • Working with members of this team, my unique skills and talents are valued and utilized

In short: A climate where people feel free to express relevant thoughts and feelings is one where the perceived chances of being yourself and straightforward, without being subject to negative consequences, are high.
Intellectually leaders may endorse psychological safety and the voice and participation it enables, but it is difficult to forgo the raised voices or angry expressions that signify dominance. And for the coworkers is more natural to flee into the safety of silence.
Psychological safety does not imply a cozy environment. On the contrary: Make an environment too cozy and groupthink follows and performance drops.  There is a natural tendency to end up in a comfortable environment once you encourage psychological safety. We are primed by Evolution to value warmth, trustworthiness, and morality more than competence. Evolutionary, the intents of others are more critical for survival than the other’s competence.  People with evil intends are more dangerous than incompetent humans. Still, America, you shouldn’t let a world-class incompetent get access to missiles that could destroy the world several times over…
The Learning Zone:

  • It’s safe to speak up
  • It’s safe to admit failures
  • It’s safe to ask for help
  • Every failure is framed as an opportunity for learning
  • But consequences are still tied to results, especially if the effort has not been well-intended

How to Change from one Zone of Engagement to Another

The Apathy Zone is the one dominating most companies today. With disengagement at about 85% of the workforce (according to a yearly, long-term global Gallup study) withdrawal is rampant. Whats even worth, this disengagement level is not different between work and management level: Only 15% of Managers are engaged.
4za
So what is to be done to engage workers and get them out of the Apathy zone?

  • Moving an organization towards a comfort zone does not engage anyone. It helps social well-being, but not economic results.
  • Using fear to spur people into action is much more effective. Results will come from management by the time-proven approach of management by fear. There is a human cost to this, but economic results will improve compared to apathy or comfort.
    The trouble is: The more an organization needs to use the intelligence, creativity, and willingness to experiment and improve the status-quo, the less able management by fear is able to produce positive results. Management by fear violates the fundamental foundation of high performing teams: Psychological safety.
  • The silver bullet is to use the principles of Liberated Organizations (The 10 Habits of Liberated Organizations) to get from Apathy, with low Accountability and low psychological safety, to high Accountability and high psychological safety.
    The downside is: The path towards high accountability and psychological safety is a journey. It can’t be done at once and has to be done in a process. Waypoints for this journey are the maturity levels of Liberated Organizations (see 4 Steps to Release the Full Potential of Organizations)

cm.png
This is what I think. What do you think?
___
Sources:

Can Agile, Liberated Organizations Succeed in Overturning the Status Quo?

To be an idealist is a great asset to the world as it takes a non-conformist to change the world. But the graveyard is full of – mostly young – idealists whose ideas fell victim to the harsh realities of the status quo they were (naively) trying to change.

The whole Agile Movement is an idealistic movement. A movement of smart people who want to change the way people collaborate into a more liberated, engaging and fundamentally more humane way. In this effort, the Agile Movement has much better chances to succeed than many other idealistic endeavors, as it appeals to the profit motive that is so predominant in today’s business world. The obvious success of Silicon Valley and those liberated ways of working provide companies with a justification to try those high minded agile management practices. In other words: The profit motive is a strong reason to embrace Agile.

But still, the odds are steep, and the fight will be one for generations. Let me explain why.

Being a Great Company is Optional

Peter Drucker listed the three things that a company really needs to be great.

knauli.png

A company can only exist if it serves a customer need by supplying a product.  This is mandatory. In contrast to this, having a great company culture is helpful but not required to build products, good economic results or to simply survive as a company in the long run:

  • A company may survive quite comfortably for a long time if the competition is as badly organized as it is
  • A great culture improves the odds of building a great product, but you might end up with a great product just by chance even with a mediocre culture
  • The law of high numbers is at work here – provided that many try, some will get lucky

According to economic theory, competition will come in the long run and uproot the underperforming companies, simply because there is a profit to be made. This might be what is happening today in the digital revolution, but this process takes time.

The Status Quo is far from abdicating

Agile or Liberated companies (as I prefer to call them) have great working cultures. They are, therefore, systematically more likely to achieve great results than companies running a command and control model. But is that enough to win against the status quo en masse? Here are some reasons why the command and control paradigm might still win:

su.png

  • More and more Start-ups are sold directly to corporate investors. Mostly, they become a part of the established way of doing business thereafter
  • Every generation, even the youngest, is still primed for command and control. The Education system is still built on conformity to hierarchical norms
  • The economy gets more and more geared towards monopolies or oligopolies. It is the very nature of the platform and digital economy that the winner takes all benefits (e.g. Amazon, Google, Facebook). By their very nature, the dominant strategy for monopolies and oligopolies is to exploit their customer, as this is a much safer way to compete than risky innovation
  • Income inequality and the rise of the new right in global politics (e.g. Trump, Brexit) and of autocratic leaders (Erdogan, Orban, Al-Sissi, Putin) will not leave economic structures of the companies unaffected. With the suppression of free speech in the political realm, facts becoming optional alternative facts and filter bubbles companies will not be able to hold a space for truthful and open speech, two core pillars of liberated companies in jeopardy
  • The prevailing mindset today is that of shareholder value, which is centered on making profits no matter what while still being legally compliant. With Liberation, managers got to pick up a trick: In order to achieve profits, it is better to approach the profit target indirectly,  obliquely: Do not go directly for the Sale or the cost cutting but manage by values. Sales and efficiency will follow.

In total: Not a pretty picture- the Imperial forces are strong, young padawan.

What can be Done?

The most often heard criticism of Liberated Companies is that it takes an enlightened benevolent dictator for it to succeed. A leader who holds the space for the values of the Agile Manifesto, for the 10 Habits of Liberated Companies and who allows people to implement Agile management practices.

laa

That kind of leader is hard to find. Plus, an organization running on liberal principles is inherently unstable, once its top leader changes (or changed her mind). This instability is even greater in Liberated Companies than in Command & Control Companies. Things like trust, open speech and individual autonomy and freedom to act are very fragile things, time-consuming to grow and very easily destroyed. In contrast to this, command and control organizations are much more stable: Everyone knows the rules, the direction might change with a new leader but the way work is done is almost never changing to a significant extent. People might need to learn a new trick to please their superior, yes. But not much more.

As long as there are private property rights, people remain entitled to run their companies (or delegate running their companies) the way they or the stock market wants. This won’t change over a foreseeable period.

Hold the space, young Padawan

Let me explain why I still think that liberation is worthwhile:

  • Every period of Liberation is likely to produce superior economic results
  • Everyone involved in a Liberated Organization picks up skills and mindsets, that will make it easier to work on a higher level for her at any point in time in the future
  • With every agile practice the DNA, the organizational memory of the Organization, evolves. A part of this DNA might become inactive for a time, but it can be reactivated

Meanwhile, we Corporate Rebels, Management 3.0 enthusiasts or Holacracy champions, need to work on achieving a tipping point. There definitely is momentum for Liberation within even the conventional business community, and the Liberation movement is getting at least nearer to a Tipping point:

  • There are more and more important multipliers embracing the values of Liberated Organizations, like for example Management Thinker Gary Hamel or Microsofts CEO Satya Nadella.
  • The staying power of the leading figures (e.g. Brian J. Robertson, Jurgen Appelo or Frederick Laloux) is strong and their number of energized followers is expanding
  • Liberated Organizations have all the hallmarks that deliver a deep sense of motivation to individuals: Innovation, Self-Fulfillment, Human Betterment and even Profits and Efficiency – what a package!

This package might feel too good to be true. But many inventions made people feel that way. Liberated Organizations are a social invention. Social inventions take more time than technical inventions to take root. But it might propel humans to new heights by enabling humanity to use our collective intelligence more systematically than ever before.

So young Padawan: Hold the space.  Embrace an Agile Mindset. Fill organizations with the 10 Habits of Liberated Organizations. Management Practice by Management Practice.

___

This what I think. What do you think?

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.

76a.png

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.

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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.

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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.

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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

 

The 10 Habits of Liberated Organizations

I must confess. I am a Nerd. A special type of Nerd. I am a Nerd in Organizations. I am captivated by the way organizations work, by the ways humans arrange themselves to collaborate with one another.

Like every Nerd, I think that my thing, “Organizing”, is the most important thing in the world. Let me explain why.

Like so many boys I liked adventures. While playing, listening, reading, or just imagining there were so many adventures to be found, everywhere. The biggest ones to me were the stories of conquest and mortal peril: The Legions of Caesar, Pirates, Prussia, the Byzantine Empire, Genghis Khans Hordes, Japanese Senguko Jidai or the two world wars – all stories. Or the epic business stories of the East India Companies, Apple, Elon Musk, Richard Branson, etc.

That fascination stayed with me until now. It just metamorphosed from a boyish adoration of heroes to a quest to understand the inner workings of the organizations.  After all, most great people could not achieve anything without great organization and management.

That’s why I want to share with you what I call the “10 Habits of Organization”. It took me 48 years, a couple of hundred books and a lot of reflection to identify them.

10Habits

A word about naming: Please not that I alternatively rfer to the “10 Habits” as “10 Wonders”, too.

I. The Habit of True North

Screenshot 2018-03-12 10.13.06.pngSome think the power of a unifying vision lies in being a great motivator. I disagree. The motivational aspect of share vision is not what is really important in an organizational context. For organizations, the coordinating aspect of a vision has far greater usefulness.

Motivation is a fickle thing, as humans are fickle. Most of us can’t be Mother Theresa all the time. But if we fall on hard times and got to make difficult choices, a vision will help. Moreover, the vision will help us to predict how others in the organization will act.

There is the illusion that a monolithic vision of a company will suffice: The one sentence like Facebooks “connect the world” or Googles “organizing worlds information”. But it is much more important to break down the vision so that every unit has a purpose so that an organization becomes a purpose-driven organization:

The Habit of True North: A hierarchy of purpose helps to replace a hierarchy of coercion.

Yet most organizations neglect visions and thereby relegate themselves to “just another place to earn money.” A pity, as it prevents people from bringing out the best version of themselves.

Working on a vision is hard, and it needs to start at the top. It takes a disciplined visionary at the helm of the organization – a combination seldom found.

II. The Habit of Caring

Screenshot 2018-03-12 10.15.20.pngThe deeper we dig in us, the more we know that everything that matters is what we do for others. This is no sentimental sentence of a Gutmensch (do-gooder), this is an empirical fact according to worlds longest running study performed at Harvard University.

The Habit of Caring: Give people something to care of, and they will care.

Give everyone a clear line of sight to the customer – no matter if external or internal customers. Give each individual the chance to make someone else happy.

III. The Habit of Teams

Screenshot 2018-03-12 10.16.07.pngPsychology and Neuronal science have shown again and again how fallible the individual human mind is. Every one of us is so blinded by his senses, prejudges, moods, attitudes and the very mechanics of his brain. There is no way around that, no matter how hard we try.

But if we engage in open, mindful exchange with others and allow us and others to reflect, the team can produce results that far and reliably outstrip the results that anyone alone can do.

We are, especially in the western world, so enamored with the narratives of the lonesome hero, that we tend to trust individuals more to do great things than we trust teams -despite all empirical evidence.

The Habit of Teams: Truely united teams are the nucleus of high performance

The conventional management hierarchy fails to produce high performing teams. It does so systematically, as autocratic structures foster fear and dependence – which are poisonous to a teams performance.

But wait: More Teams means more meetings, right? Most of us hate meetings: A waste of time. But we might fail to realize that all that tedious meetings are just a symptom of the failure to lay the foundations of successful teamwork. Some of those foundations are trust, deep relationships, shared missions and a structured meeting format which allows everyone to participate and open up – not just the talkative ones.

Indeed, good teams will have fewer meetings, as they do not require them: They achieve their coordination by more personal, shorter and more meaningful exchange.

IV. The Habit of People

Screenshot 2018-03-12 10.16.41.pngSince the eradication of slavery, the right of every adult to make her or his own decisions is right, front and center of our global culture. We trust individuals to make the right decisions every time, no matter if the individual takes up sky-diving or purchases a house for hundred thousand dollars, or opt for a facial tattoo. Go ahead, you are the master of your own fate!

But since the abolishment of the medieval menial service of farm hands, achieved in the industrial revolution, there remain basically two areas where humans are not trusted to make the right decisions. In the education system, and in companies people are subordinated to other persons. In exchange for regular pay, employees forego their right to make their own decisions.

This is, of course, an advance from slavery and menial labor, but still, people are not welcomed as adults in a company. With the signature of their work contracts, people enter organizations as kids, not as adults. Bosses can order people around like they are kids. And as kids employees try to please their parents, even if it means bending the truth.

Having a good “parent” in business is fantastic, but much rarer than in families. After all, the connecting tie is not one of blood but one based on an economic relationship between superior and subordinate. Cold hearted exploitation is often the result.

The Habit of People: Treat people like adults, and they will start to make adult decisions.

It’s not easy, but even in hierarchical organizations there are techniques to do that, see, e.g. 4 Steps to Release the Full Potential of Organizations.

V. The Habit of Freedom

Screenshot 2018-03-12 10.17.19.pngRules and Policies stifle innovation. They restrict the freedom to act so much, that organizations may fall into sclerosis by entangling everyone in the organization in a byzantine web of bureaucracy.

It is as simple as that: Most company rules punish everyone for the misbehavior of the few. The more rules there are, the more loopholes there are, the more apparatchiks will prosper, and the less entrepreneurial an organization will be- but an Enterprise without Entrepreneurs in it should be a contradiction in terms.

The Habit of Freedom: If you want your company to fly, don’t lock everyone up in secure boxes.

Do not make a mistake to equate a company with a minimal number of rules to an Anarchy: As long as there is discipline, grown trust and shared values, the organization will be functional and innovative. Not just functional, as most hierarchies are.

VI. The Habit of Seeing

Screenshot 2018-03-12 10.18.49.pngTake a step back and look at an organization. What do you see?

  • An Organization Chart showing a lot of boxes
  • People working in predefined jobs, doing their duty
  • Offices where people labor on their assigned tasks

This is all good and well for the industrial age, where work can be neatly parceled out to employees by all-knowing superiors. Efficiency dictated that the amount of information available to an employee is determined by what the employee needs to fulfill a job. To give more information was simply uneconomical.

The Habit of Seeing: Everything there is to know beats all you need to know.

Nowadays, in complex, ever-changing environments it’s more and more unclear what an employee needs to know to do a job. Even more important, research has shown time and again that good teamwork can only happen in an environment of mutual trust. Transparency, the pervasive availability of information to anyone, is creating trust, it is enabling decentralization of control and is enabling learning.

VII. The Habit of Learning

Screenshot 2018-03-12 10.18.02Learning is the only sustainable competitive advantage there is. By now, this piece of wisdom might feel rather stale. So many companies have tried to become a “learning” organization – and so many failed.

Robert Kegan, a Harvard psychologist, and organizational researcher argues that much of these failures can be attributed to our lack of understanding of learning:

  • Learning happens not before or after the action, but primarily during the action
  • If we put feedback loops into every day to day activities, in an environment built on trust and openness, people will learn
  • Managers have to master pedagogy (techniques how to teach) and have a curriculum (whats useful to learn) in mind

The Habit of Learning: Saturate an organization with opportunities to learn and it will learn

People will not learn because they should. Some will want to learn. Other simply can’t avoid learning if nested in an organization where learning opportunity is abundant and embedded in every activity that they do.

VIII. The Habit of Gardening

Screenshot 2018-03-12 10.19.18.pngDuring the last 100 or years, most managers have been thinking about themselves as problem solvers, with a heavy streak of day to day, “street-wise” (pragmatic), troubleshooting.

In a fast-moving, knowledge-driven economy, this self-view is fundamentally outdated. Now, decisions need to be made at the location of highest competence. They need to be made fast, on the spot. Therefore, a manager becomes both the designer of an organization and its caretaker and is less involved in the day to day actions.

In the words of Tim Brown, the CEO of IDEO (which arguably is worlds most innovative organization): A Manager needs to become a Gardner.

The Habit of Gardening: Tend to an organization: Seed, water and protect it- and it will blossom.

Well, that’s a huge shift. From an all-knowing, often micro-managing decision maker to a Gardner that steps aside and lets ideas, people and finally business performance blossom. Many Managers won’t be able to do this shift, despite all evidence that the age of the servant leader has begun.

But do not mistake this for a green utopia. A Gardner arranges his garden for a purpose, and he cuts back rigorously if need be.

IX. The Habit of Exploration

Screenshot 2018-03-12 10.20.48.pngIn today’s knowledge-driven economy, there is so much knowledge inside co-workers and so much data to be analyzed. Basically, making ever new hypothesis, trying out things, reflecting, revising the hypothesis and experimenting, again and again, becomes a core individual working technique rather than a high profile exercise of research teams.

Today, we are all explorers who try new things and are rewarded by our efforts. Just look at the way you are working on your smartphone. Chances are that the more you invest in getting to know its capabilities, the more personal utility you derive from the device. The quickest way to learn is to watch others and imitate their way of doing, for example, calling a taxi via uber or solving a tricky excel problem by finding a youtube tutorial.

Like it or not, we are all already explorers in today’s vast worlds of knowledge.

The Habit of Exploration: In a knowledge economy, everyone is an explorer.

The more everyone is stepping out of his daily work, explores, and brings home new nuggets of knowledge that are put to work in the local context, the better business performance will be.

X. The Habit of Practice

Screenshot 2018-03-12 10.21.11.pngThe new, modern organization is a journey, not a destination. The speed of the journey will be determined by the quality of the practice. Willy-nilly adoption of this or that practice won’t achieve anything. What is called for is:

  • Deliberate practice
  • Encouragement to experiment & tolerance for failure
  • Iterative ways of working in small increments, in forever self-correcting feedback loops

The Habit of Practice: Organization is a journey that will go nowhere without value driven discipline.

Moreover, an Engineer-like (or should I rather say “Gardner-like”?) self-restraint in doing one thing after another without losing sight of the big picture. There is no point in expecting everyone to perform at stellar champions league level all of a sudden. It takes practice, blood, sweat, and tears to built great organizations.

But the discipline does not lie in slavishly following a method. The discipline must be in following the agile mindset and the values described in the 10 Habits.

laa.png

How to start

Seldom an organization will be able to follow all Habits of Organization. I suggest starting with aquiring at least one habit, as the benefits are immediate. Just pick one, any of the ten will do.

Screenshot 2018-03-12 10.21.58.png

Experience shows that work on the other habits will follow in due course: Go forward and allow – for example – more transparency and trust will likely increase, enabling more delegation and more autonomy.

I will elaborate how to start liberating in a later post. For now, have a look at 4 Steps to Release the Full Potential of Organizations.

A Wonder to Awe the World

There are few things that are more worth aspring to then to liberate people. Still,  the way we organize work today is build on – often mindless- subordination. This is one of the last left-over of the feudal and industrial age.

I think it’s time to move past that, by using the tail-wind of the digital age: The Economic results of Liberated Organizations are simply superior.

It all comes down to this: It makes a huge difference weather you just show up at work or you really engage in it.

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This is what I think. What do you think?

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Special thanks to Sketch Note Artist Yasmin Cordes of Sketchworks. I met Yvonne last year at Re:Publica in Berlin and she ventured her help in visualizing the concept. A pleasure to work with you, Yvonne!

The Liberated Organizations Canvas – A workshop tool to sketch directions for aspiring builders of wonderful Organizations

liberatedCanvas.png

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:

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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.

mffo2.png

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:

 

Going Native: The Best Way to Link Traditional​ Companies and Start-ups

From a corporate perspective, the Startup world is chaotic, hard to understand, seemingly irrational and even irresponsible. Similar feelings come into play if just a unit inside a Company adopts Agile working principles, for example, an IT Unit adopting SCRUM as its project method.

It is here that the paradigm of Control & Predict meets the paradigm of Autonomy & Evolutionary Purpose. There are bound to be misunderstandings, crisis, conflicts, drama, and frustration in this interface between the traditional corporate world and the Start-up World.

Yet many Companies are rather inept dealing with this interface. A typical reaction is to assign a single point of contact (SPOC) by each supporting unit, such as IT, Logistics, Purchasing, Accounting or Legal to take care of any issue raised by the Startup. The well-meant message to the Startup is: “Do not worry. We will take care of your issues”. And so the trouble starts – boys and girls working for the startup usually:

  • Don’t know which question to ask. There are there for a mission, but the intricacies of e.g., corporate IT, Legal finesse or accounting laws are not their area of expertise nor their primary concerns. All their focus is to get a product with a viable business proposition off the ground
  • Don’t know how to formulate question, so that the experts in the supporting unit can understand it
  • Are not sure who should ask a question. In such a fluid way of working as a Start-up environment demands, responsibility can hardly be pinpointed to single person
  • Have other concerns. Yes, there might be this or that – for example – legal quirk with this or that decision, but this is often a secondary concern. Too many decisions need to be taken at a moments notice
  • Change their questions fast. Even if a question is formulated, with all the experimentation going on, there is no guarantee that the question will not be outdated tomorrow
  • Need answers real fast. A hierarchy, where there is an awareness that answers are nothing else than commitments, and commitments costs resources, needs a lot of time to come up with an answer. After all, the hierarchy is built for reliability and efficiency – not for speed and effectiveness

Giving these problems, the single point of contact model is doomed to fail.

Going Native

So what is the alternative to the SPOC model? It is not waiting for issues to be raised by someone in the Startup but integrating some co-workers deep in the Startup. Thereby those co-workers, which might be described as liaison officers, agents or advisors, stay  in the full context of the Start-up and are able:

  • to scout for issues with all their knowledge
  • to solve issues by directly addressing real or potential issues with their support unit
  • to work relive the tensions between the Supporting Unit and the Start-up

Int.png

Costs

The support unit has to dedicate the liaisons, which can be hard given that the liaisons will be the more effective, the more knowledgeable, the higher their social skills and the better their existing network is.

The Start-up has to accept an increase in their number of co-workers. If multiple supporting units do send liaisons, the number of persons to be integrated can be quite large. But Start-ups need to be close-knit teams where communication is plenty and relations are close and meaningful.

Therefore the liaisons should be integrated not into any single team of the start-up. In the open space facilities so typical of start-ups, the liaisons should have their own table. But they have the permission to change their desk to this or that team table from time to time, just like the situation demands it.

It is the liaison’s job to make themselves useful to the start-up, to seek meaningful work where the start-up team might not be able to identify it and be instrumental in solving it.

Conclusion: Time to move, HQ!

I think that going native is a very good option – after all, the agile way start-ups are working, with lots of experimentation and engagement, lights a way for the corporate world to change.

It is the corporate units that got to integrate into the new world of working- not vice versa.

“Going Native” allows this. It is challenging for the leadership of the support unit to be faced with this new way of working, that provides so much autonomy and decision making authority to the liaisons. But this is exactly what needs to be learned to survive in the digital age.

This is what I think. What do you think?

___

Sources:

  • Kotter, John “Accelerate” 2014 – gives a good hunch what it takes to lead a conventional, command and control organization (first “operating system”) and simultaneously a second agile one (second operating system)

Special thanks to Holger Balderhaar for making me rethink my position on Kotter’s 2nd Operating system.

 

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.

agilewo.png

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.

Screenshot 2018-01-19 12.52.44.png

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.

Screenshot 2018-01-19 12.49.56.png

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.

Screenshot 2018-01-25 12.18.53.png

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.

Screenshot 2018-01-25 12.21.22.png

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?

Screenshot 2018-01-19 12.55.33.png

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.

Screenshot 2018-01-25 12.23.54

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.

Screenshot 2018-01-25 12.14.57.png

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.

Screenshot 2018-01-19 13.19.44

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.

Screenshot 2018-01-25 12.22.41.png

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?

__

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.

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.

agilewo.png
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.
Screenshot 2018-01-19 12.52.44.png
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.
Screenshot 2018-01-19 12.49.56.png
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.
Screenshot 2018-01-25 12.18.53.png
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.
Screenshot 2018-01-25 12.21.22.png
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?
Screenshot 2018-01-19 12.55.33.png
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.
Screenshot 2018-01-25 12.23.54
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.
Screenshot 2018-01-25 12.14.57.png
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.
Screenshot 2018-01-19 13.19.44
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.
Screenshot 2018-01-25 12.22.41.png
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?
__
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.

4 Steps to Release the Full Potential of Organizations

What would you say is the most crucial challenge that a manager faces these days? I would argue it is to release the true potential of workers. That’s what every Manager should be really concerned about, because everything else, be it arcane strategy or mundane day to day actions, follows from that.

Engaging workers, and releasing their creative energies needs more Self-Management. If you doubt that, just read the last couple of posts. Hell, even the late Peter Drucker, king of all management thinkers, recognizes this need. He states that:

dr2.pngDrucker cites 6 factors that determine Knowledge Workers productivity:

  1. A broad definition of the Task, as the question: “What is the task?” is much harder to define than in the realm of manual work. It’s really outside the ability of the manager to determine that, i.e., the manager needs to rely on the worker to find it out himself
  2. Autonomy of the individual to do what she deems best
  3. Continous innovation, with learning on individual, team and organizational level
  4. Learning: Reflection and iteration
  5. Quality, not just quantity
  6. Treat a person as an asset and recognize the intrinsic motivation

With surprising egalitarian swagger he concludes:

dr4.png

Now, that’s your case for self-management right here – for those not wanting to read the last posts. Now on to the model.

Big Bang vs. Gradual Adoption of Self-Management?

In the last post, I summed up the dilemma faced by anyone wanting to “max-out” the contribution of Knowledge workers as follows:

bsvsbb

The good news is: I think there is a middle way.

Charting out the Middle Way

But first, let’s explore the criteria that a way to move organizations towards self-management can be measured against. I came up with 6 criteria and applied them versus the two approaches mentioned above.

xxx

1. Acceptability

The very starting position of any move towards Self-Management is that the approach to adopt Self-Management is acceptable to the ones in charge, owners, and managers. It is easy to agree on the overall target,  i.e., better results through innovation driven by an engaged workforce of knowledge workers. But going all out for Holacracy is thousands of steps too far for 99% of owners and managers.  Taking baby steps and try this or that agile work-out is, on the other hand, natural to accept.

2. Forcefulness

Even if the way to adopt more self-management is acceptable, the approach needs to be forceful enough not to peter out like so many other well-meaning corporate initiatives. Adopting Holacracy is as forceful as it can get, with all managers devolving their powers for good and basically ceasing to exist as managers. Doing agile exercises, while having really low really low barriers of entry into organizations, is as weak as it can get. Daily needs are sure to override, or worse hollow out the optional, “nice to have,”  work-out.

3. Realistic

The third condition is realism: Is it realistic to get more self-managed by adopting one of the three approaches? The Big Bang approach is the real thing. It can’t get any more practical than that. Agile Baby steps, however, are used to let some fresh air into organizations. To loosen the mental concrete and valuable for people to get to know each other better. But fundamental change? Maybe over very long periods, but are they enough to diminish the hierarchy significantly? I do not think so.

4. Measurable

Fourth, the approach needs to be measurable to be sure that progress is achieved. Both approaches are entirely quantifiable, for example by keeping track of the number of vigorous work-outs or processes in planning, tested and adopted per team or on an organizational level, on a KANBAN Board.

5. Manageable

The resulting transparency is a prerequisite for the transformation to be manageable. Clearly, Management stays in control of in the “Baby steps” approach. But by adopting Self-Management by a big bang, no single person is entirely in control. There is a leap of faith to be made. A chasm which is hard to cross for all: Owners, managers, and workers.

6. Cost-effective

The sixth condition is cost-effectiveness. Given the incumbent profit oriented hierarchy, no initiative whatsoever will be launched, without an expected payoff. Here is a major short-coming of nearly all self-managed approaches. While the link is made between employee engagement, more productive Knowledge work, Innovation and Self-management, the profit motive is somewhat hidden. Far more prominent are explanations about human health, human stages of development, happiness, and self-fulfillment. I think that these high minded aspirations fail to bring the typical, rational and cynical executive to sign up for self-management.

7. Outward-looking

That the seventh condition, an outward-looking focus on the customer, is neglected in most Self-Management Models is hard to understand. Yes, there is some lip service to customer centricity in those models, but 98% of the models are about explaining the inner workings of organizations. In these digital, customer-driven times, this is a critical neglect which can only be understood by looking at the origins of self-management, a theory called Sociocracy, Sociocracy was invented in the 1920’s by Kees Boeke, a Dutch educator, as a way to humanize and democratize command and control organizations. It was directed to fight the misuse of power, but not to deliver the speed and learning that succeeding in the digital revolution needs.

In summary:

  • With the Baby steps method of doing agile work-outs, nothing much will be achieved.
  • Going for a big bang of Self-Management (by Holacracy, Liberation or “Collegial enterprises” or whatever model) faces such high barriers of entry into the market, that it won’t happen except in the rarest of cases

Both approaches are so extraordinarily light or so extremely heavy-handed that I think there must be a third way: A gradual move towards Self-Management…

  • that makes it easier to convince owners and senior executives to sign-up for

  • that utilizes the current, profit-oriented way of thinking to get human development inside organizations going

  • that puts the customer in the center of almost all that a company is doing. To link Self-Management to the digital age, to the lean start-up and all its learnings

So how could this roadmap look like?

A Roadmap for the Gradual Adoption of Self-Management

In my discussions with clients and colleagues, I find it useful to think of organizations as being in a particular stage of maturity. The best-known model for describing organizational maturity is the Capability Maturity Model (CMM) which explains how advanced an organization is based on 5 Maturity Levels. Each Level is, of course, a simplification of reality, as the level of maturity might vary by individual, department or process. But it is a useful model to identify problems, potentials and get the discussion going.

So in the spirit of the capability maturity model, here is the sketch of a model for self-managed organizations in four maturity levels.

rI.pngThe rows criteria are aligned to the view that Corporate Rebels, a Dutch-based missionary consulting start-up spreading the word of self-management, has. I just added the second criteria “From Internal Focus to Customer Centricity,” which I think has to be a vital characteristic of any responsive, agile organization.

Let’s continue to explore what the different maturity levels are like.

I. Hierarchical (Status-quo)

I do not really need to describe the workings of the hierarchy in a company, do I? Every one of us knows how to work in those environments. Do not get me wrong: It’s not that bad. Work can be productive and usually is. Even some element of fun can be found here and there, and there are various forms of social engagement.

The fundamental issues with the hierarchy can be reduced to seven main points. These, I think, are so fundamental that I put them in a graphic.

7f.png

That said, the hierarchy has its place: Execution in predictable environments. It still is a useful human invention. Even with the movement to self-managed organizations hierarchy won’t go away. There will always be hierarchies of knowledge, informal and formal leader-follower arrangements. It will still be there, on a back-seat, but it will no longer be the dominating driver of future organizations.

II. Empowered

Empowered organizations are created by delegating more and more responsibility to workers.  Organizations move from a command and control to a mission control style of leadership. There is more thought spend on purpose, strategy, customers, agile teams, participation, learning, values and ideally on data-driven decisions.

This is typical for today’s mainstream, knowledge driven company. Time is spent doing agile team work-outs, SCRUM projects, Lego building exercises for a change of perspectives in a design thinking workshop, setting up Kanban boards and product logs. All under the confines of the hierarchy.

This is all well and fine. Getting more “Startupy” is nice. Here come the downsides:

A. Empowered or Agile practices don’t align well with the hierarchy

Agile relies on autonomous groups making their own decisions. It relies on a safe environment to participate and contribute. It relies on Managers stepping aside and getting into a coaching role, refraining from direct interferences, and learning to rely on giving subtle nudges instead.

Alas, experience has shown that the workings of the hierarchy systematically undermine any vigorous exercise over time:

  • Managers fail to step aside and intervene, thereby destroying the sense of responsibility the autonomous team had. Destroying the very core of Agile.
  • Managers are often awful coaches: People will not open up to someone who has vast power over them, who fails to ask open questions and tends to tell and not listen. They will rather stick to their role as a courtier trying to please the manager
  • The velocity of teams, i.e., the ability to deliver quantitative results fast, will, over time, become all that is important. Quality is only an after-thought. The hierarchy re-establishes itself with its long-held norm: Valuing efficiency higher than effectiveness

B. Empowered or Agile Practices are just a “bolt on” to the organization

Agile Exercises are viewed as features. They do not change anything about values, behaviors and worst of all the hardest of all facts, the organizational hierarchy. To flatten the hierarchy by removing some layers, by increasing the span of control of each manager, to decrease the total number of managers and management layers, is almost always neglected.

C. The dominant Parent-Child relation between Manager and subordinate is maintained

Over time, Empowerment is felt by employees as just a bluff. A maneuver of managers to deceive Employees. The fundamental contradiction in terms is: “You are empowered because I say so.” This empowerment is entirely arbitrary and can be revoked at any time.

In fact, Managers adopt the role of a well-meaning parent to a child. And we know how fraught with problems this relationship can be.

Conclusion: Empowerment is useful if done right

Still, empowerment is helpful if the tough questions are tackled at this stage of organizational maturity, too:

  • Flatten the hierarchy, increase leadership spans, reduce the number of managers
  • Reduce the Rules, the number of “strict,” disenfranchising processes that a company has
  • Change the organization structure to give each unit a clear line of sight to the customer. for internal units that means to mirror their organizations to the internal customer’s organizations to create direct accountability

Very few companies do Empowerment right. They just talk about values, dabble in an occasional agile work-out and provide some well-meaning leadership exercises. They should get real and face the hard facts, too. Without addressing them, they are just rearranging the deck chairs on the Titanic.

III. Self-Organized

The Self -Organized Stage is reached when organizations did work on the hard facts listed above. They flattened the hierarchy, they reduced the management tax ( see  Big Tax Cut! Flatten the Management Hierarchy).

Out of necessity, fewer managers means more self-organization. The team takes over much of the work. They might be “seeded,” i.e., set-up by managers, but how they work is up to them. Even what teams are working on is decided by the teams themselves as they begin to “pull-in” work instead of having work “pushed” to them by managers. People and teams learn to actually look for the work that is to be done because they care about their part of the company.

More and more critical decisions are delegated to teams of non-management individuals. In fact, more and more people become “defacto” managers, in all but name.

In such an environment, the fundamental relation between manager and subordinate shifts towards an “Elder- Citizen” Relationship. The Elder is treated with respect, and her advice is appreciated, but the Citizen is much more free to pursue her own path.

In this stage, it becomes crucial to think in Memes, i.e., coherent sets of cultural ideas that organizations introduce, maintain, adapt or discontinued. This is the stage where culture needs to grow to such an aligning force that a reorganization acts in unison without required much direction from the – still existing, but reduced, hierarchy.

Haphazard introduction of Agile exercises won’t be enough to reach this state. Senior management needs to have a plan where the organizations should grow into and what are the steps to get there.

Crossing the Chasm

So far so good. The Hierarchy has relented its iron grip and thinned out its ranks and layers. Stage III “Self- Organized” is a status that is seen by innovation leaders such as the iconic IDEO, AirBnB or Netflix. There the hierarchy is still there, but managers stick to the sidelines of the organization, i.e., they adapt their leadership role to that of an Explorer, Gardner, and Coach.

To go further into self-governance means to be crossing a chasm: It means to get rid of the organization entirely. This is a leap of faith that few owners are willing to make. Here is a list of those how did.

Is it worthwhile to do this step? Empirically, no one knows. But it is doable and realistic. There are a lot of successful Stage III, self-organized companies.  But there are a lot of successful stage IV, self-governed enterprises too. In fact, a lot of self-organization seems to be the sweet spot that today’s companies aim for, without crossing the chasm and abandoning the hierarchy. 

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Source: What kind of Organization do modern Companies aspire to be?

So why crossing the chasm to self-governed organizations?

  1. For some owners, this is a crusade for humanitarian values.
  2. For others, its a way of relinquishing control and earn a smart passive income.
  3. Others do not trust the stability of a self-managed company, as the hierarchy is still around and may reassert itself at any moment, especially in the event of an exchange of senior management. There are numerous examples for that, one of prominent one the rise and fall of the Bell Labs. At these labs, lots of the inventions for the digital age (Computing, Networking, Internet, Mobile Phone) have been made in self-organized environments. Before the hierarchy took over and stalled innovation. It is today a subsidiary of Nokia.

IV. Self-Governed

There are three hard criteria that indicate that a company is no longer self-organized but is now self-governed:

  1. There is no management hierarchy
  2. Hiring and Firing are done by teams
  3. Salaries are negotiated by teams

Sounds like anarchist chaos? Let’s address the main questions on self-governance in an FAQ:

A. How can the organization ever act in unison, quickly and decisively?

The Coordination misperception: Someone needs to see the big picture and act. Given all what is known about human biases, don’t you think that this someone should rather be a group and not an individual?

Coordination is Self- Governed Organizations is achieved through a hierarchy of teams – instead of a hierarchy of individuals. The top-level team directs the organization, not unlike a board of directors does. In other words:

The Hierarchy of Individuals is replaced by a Hierarchy of Teams

Holacracy, Sociocracy and many of the forms of Liberated Companies are following this pattern. Obviously, hierarchy is important. There needs to be a single voice giving a clear direction. It just doesn’t need to be an individual.

B. How gets anything controversial ever being decided in this workers paradise?

Oh yes, the consensus misperception. Just because teams are in charge, doesn’t mean that everything has to be debated without end in order to achieve the often elusive consensus.

There are other decisions mechanisms available: Take a vote. Determine an individual decision maker for a specific action. Have discussions in such a scripted way as to hear everyone out, not waste too much time on talking and come up with better, more reflected decisions than ever before. Curious? Read the last post: Delegation on Steroids.

C. Will people not just slack off, enjoy their pay cheques and do what they want?

Ah, the Slave Driver misperception: In order to make people work, show them a carrot while holding a stick in the other hand. While it is true that carrot and stick works in lower levels of the Maslow pyramid, Knowledge workers are very likely to have their basic material needs satisfied.  Carrots and sticks have a limited use, here.

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But it’s not that carrot and sticks are no longer in use in self-governed organizations. It is only that this power is no longer wielded by individual managers. Teams set salary, hire and fire and give directions to lower level teams.

Still, work is not assigned to employees. Employees volunteer for work, they “pull the work into their area of responsibility. That process of “pulling in the work” is facilitated by social cohesion, a commonly shared mission and last not least social pressure multiplied by transparency over everything that gets done and not done.

Imagine someone slacking off in a vastly transparent work environment, thereby burdening the team with his presence. Chances are the Slacker won’t be a Slacker for long – at last not in the Self-Governed organization.

It much harder to hide a lack of engagement to co-workers than it is to hide it from managers.

Conclusion

All indications are that we need more self-management in this VUCA world, where innovation is the key to delight customers.

I think we can get there by addressing the hard questions in our efforts to empower an organization. We do not all of a sudden need to become Missionaries, Communists or Anarchists to benefit more from self-management. As a manager, you just need to do your work thoroughly, as you really should and work on the hard questions of empowering: Flatten the management hierarchy.

To compete with world leaders such as Netflix, Airbnb and the creative parts of Amazon, a company needs to move to the sweet spot of innovation. It needs to move to Maturity Level 3 and become Self-Organized.

Maturity Level 4 is not for the faint-hearted and its results are by no means certain. But it is a viable alternative and is likely to be much more stable than Maturity Level 3, where the Hierarchy always looms in the shadow and threatens this sensible “Sociotope” that Self-Management has created and that lets innovation blossom.

This is what I think. What do you think?

Sources:

  • Drucker, Peter “The Effective Executive,” 2006
  • Drucker, Peter “Management Challenges for the 21st Century”, 2001
  • Oesterreich, Bernd “Das Kollegiale geführte Unternehmen,” 2017
  • Denning, Steven “Radical Management,” 2011
  • Ries, Eric “The Lean Start-up,” 2011
  • Pontrefact, Dan “Flat Army,” 2013
  • Featured image by Stefan Wagner “Project Sociotope,” 2011, andsychrony.net

Last not least, here is a different layout of the Capability Maturity Model of Self Management.

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