On Organizations

Overview

“Organizations exist only for one purpose: to help people reach ends together that they couldn’t achieve individually.” ~Robert H. Waterman~

I live in a society that exults the individual, yet organizations shape much of our lives. Most of us spend our careers working in organizations, small or large. Our laws give some organizations rights that we associate with individual humans. For most of us it’s natural to work with others to accomplish what we cannot do alone.

Given how pervasive organizations are you’d think we’d be great at building and running them. But anyone who has worked in an organization larger than a small team (say over 10 people) knows the difficulty of improving its effectiveness (how well it achieves its objectives). And the difficulty of improving its efficiency (minimizing the effort that doesn’t contribute to its effectiveness).

It’s not for lack of trying. Many organizations spend significant resources on improvement efforts. (It’s hard to say just how much because of the way these efforts are organized, funded, staffed, and tracked, which of course contributes to the shortfall of results.)

This work proposes an approach to improving an organization’s effectiveness and efficiency when refining existing execution, appropriate in some cases, or where necessary designing and implementing a new execution model.

Introduction

I spent 30+ years working in organizations that were much larger than the small town I grew up in. I had the great good fortune to take on a number of roles, as individual contributor, project leader, team manager, manager of managers, general manager of a business group, and a series of staff leadership roles. I greatly enjoyed the experience. I learned a lot, had the opportunity to do things I found interesting and satisfying, to learn, to develop skills, to succeed, and to fail.

My last decade of work entailed influencing policy and organizational direction more than operational responsibilities. I spent my time identifying what changes in business execution would improve business outcomes, persuading organizational management to adopt those changes, building related execution plans, and leading pilots and proofs of concept to validate the changes were feasible and would produce the desired outcomes. I had a few successes along with many failures.

Throughout my career I’ve struggled to understand why efforts to change an organization to produce different outcomes or improving existing outcomes nearly always fail. In my experience organizations strongly, sometimes perversely, resist change. A successful organization establishes massive inertia that produces the initially desired results, which of course is a good thing. At least until improving outcomes requires non-incremental change, at which point overcoming the inertia ranges from difficult to impossible.

*** TODO *** I’ve encountered some great sources of relevant insight. Clayton Christiansen’s work on disruption and the importance of Resources, Processes, and Values in predicting whether an organization can succeed in a new endeavor. ?Deloitte’s? work on distinguishing Core from Adjacent and the related risk of failure. CK Prahalad’s (something). ?Who? distinction between process improvement and creating new ways of doing things. “?” and a host of others on viewing change management programmatically.

In my experience these insights, while helpful, don’t translate easily into a successful approach to change. Organizational leaders engage with the concepts but seldom see them as relevant to the challenges they face. They frequently reject all conceptual approaches as academic, theoretical, and non-actionable. Common objections include:

1. Timing–we need improved results now. Once we’re in better shape we can take a longer view.
2. Too big a gap between the general analysis and a specific plan of attack.
3. Requires too much preparation.
4. Benefits are too hard to quantify with confidence.
5. What matters is people. The right leaders will build the right teams and we’ll win.
6. Our existing leaders, processes, structures, and offerings represent our greatest strength. Any new opportunity can be addressed with minimal incremental change (effectively any adjacency is near, not far).

These objections should carry real weight, though they in no way justify rejecting an approach grounded in a meaningful conceptual framework. Instead they should be understood as requirements:

1. Applying the framework must produce meaningful actions and benefits in the near term. Especially a fundamentally new offering to new clients (so very different from the current business) must focus on activities that improve confidence, decrease uncertainty, and enable scaling investment to match returns as closely as possible.
2. Grounding the conceptual framework in the specific circumstances must enable progress to be made without gathering huge volumes of data, applying extensive analysis, and covering the domain of concern both broadly and deeply up front. Instead a successful approach must allow flexibly switching between broad/top down analysis and point/bottoms up work; it must support sparse data; it must support successive refinement.
3. A new initiative always lose a cost/benefit analysis compared to an incremental investment in existing operations, because it lacks history, so less is known, with less confidence. The successful approach depends on building a track record, gaining experience, and shifting between theoretical speculation to practical demonstration quickly and consistently.
4. Understanding the human dimension is necessary but not sufficient. Any change will be instantiated by real people collaborating, and having the right people with the right expertise and the right soft skills is critical. That said, they’ll fall short without the right framework.
5. No change agenda can succeed without exploiting every relevant competency an organization can bring to bear. Knowing whether an existing capability is a strength or a weakness requires accurate self-assessment (what are we really good at?) and a dispassionate evaluation of required capabilities. It also requires real work, which seldom flows from extra-credit assignments.

Meeting these requirements remains out of reach even if you master the insights and disciplines listed above and apply them through traditional approaches to formulating strategy and execution. Two key barriers remain:

1. Inertia-based organizations usually satisfy expectations and can make and meet commitments to achieve specific outcomes, but that doesn’t guarantee anyone has a clear end-to-end view of how those outcomes are produced. The lack of a widely understood model for what the organization does and how it does it leaves us building our change plans on shifting sands.
2. The outcomes produced by an organization depend on more than its internal actions. Those actions occur in a context and the outcomes produced depend on the context. A systemic view of the organization must encompass its context as well as its internals. Such a system is intrinsically complex, which is to say that (at least the external) participants are lightly constrained (you can’t dictate everyone’s behavior) and cause and effect are poorly understood (because participants can respond unpredictably, influencing how others respond, and so on).

*** some description of modeling for extended complex systems here ***

Overcoming these two barriers–the lack of a systemic model of the organization in context and the complex nature of that system–with the appropriate method can satisfy the requirements listed above: 1. Produce meaningful actions and benefits in the near term: an improved understanding of how the existing organization functions provides immediate benefits, feeding incremental improvements while providing a rich foundation for considering more aggressive change initiatives. 2. Large gap between general and specific: Complex systems don’t lend themselves to detailed “how” descriptions,

Most organizations can’t provide a formal answer to the question, “How does your organization achieve its expected outcomes?” For the few who can the description tends to be expressed as business process flows (a schematic view of Order-to-Cash, Concept-to-Production, and similar long-lived business processes). Even these abstract descriptions of an existing business frequently differ significantly from how the business works in fact.