How we work
We are shifting from hierarchy, through process to networked organisations. Hierarchy, usually synonymous with “command and control” styles of managed, has its strengths, but becomes increasingly challenged during periods of intense change.
“a system in which members of an organisation or society are ranked according to relative status or authority”
The “total quality management” movement brought process to the forefront. The desire to structure a business around its processes is usually driven by the quest for optimisation and quality control. There is change, but the rate of change is controlled, and the challenge is in maximising efficiency, rather than fighting for business survival in the face of dramatic shifts in the environment. The focus of a process-driven organisation is on managing and minimising exceptions, things that fall outside of the process are viewed as negative events…
There has been much buzz about the “networked” organisations in recent years. Flattening corporate structures and collapsing hierarchies isn’t just about optimising the organisation, it is about making it flexible enough to cope with dramatic change, and acknowledging that knowledge is now more evenly distributed through out the organisation.
Successful networked organisations tend to evolve into heterarchies – dynamic structures that assign authority and responsibility according to business challenges as they emerge and dissolve. The desire to build networked structures is usually driven by a quest for innovation. It isn’t about optimising existing processes, it is about ‘questing’ for new opportunities, products and services.
Managing networks – and networks of networks
People generally have a clear view of how management works in hierarchies – they say you do, you say they do. People are less clear about how management works in flat networks. The matrix organisations that are now common in multinational businesses often end up in a grid lock of contention and conflict, because of confusion about responsibility and accountability. So, how do we manage these complex networks?
“Predictability at the point of interaction”
Managers can’t be expected to handle the intricate complexities of every process and every corner of the organisation. Particularly at the senior level, the challenge isn’t “managing the network” – it is managing the network of networks, the collections of teams and sub-teams. The only way to make this manageable is to adopt the methods of the software development: APIs. Managing the interface between the teams. That isn’t the ‘management’ lines, it is the intersections where the actions of one team impact on the activities of another. By managing at the point of interaction, teams can be autonomous and agile, while the organisation can operate at scale.
Turning management backwards
Managers, as control is diluted, become increasingly obsessed with the things that can measured, as opposed to the things that can be measured. It is time to turn things around:
- Outcomes beat activity
- Progress beats movement
- Reflection beats velocity
Commitment based management
The thing that we have most control over, as individuals, is our commitments, and fundamentally, modern organisations exist as a living network of commitments between people in the organisation, and people outside of it. For each commitment we have three options:
Managing the process around each of those events is the fundamental process for a networked organisation. This is the operating model of the Social Business – a network of commitments that adapts to changes in its environment.
Management is too often based on ‘snapshots’ rather that looking at the sequence of events, the context, the ‘story’. Good businesses are measured and managed by the quality of their stories. The key to success, I believe, is powerfully simple, but very non-trivial: Track commitments, create stories… …and learning along the way.