How Holacracy has shown its limits

We have been reporting periodically in this blog experiments in a new organizational form, holacracy (see ‘How Holacracy responds to the challenges of the Fourth Revolution organization‘ in February 2014 and ‘How the Implementation of Holacracy Appears Challenging‘ in March 2015). It is now official: the experiment has been terminated as it failed.

vanishing_humanIn the Quartz paper ‘Zappos is struggling with Holacracy because humans aren’t designed to operate like software‘, the demise of the method and the negative outcomes at Zappos are described quite dramatically. The reason quoted is that the human element was excessively removed in the rigid holacracy method: “Ironically, as it seeks efficiency and attempts to eliminate human emotion, Holacracy imposes layers of bureaucracy and adds unnecessary psychological weight on to employees.”

Holacracy is too rigid and bureaucratic. It is not designed to address the challenge of complexity, which requires agility and scalability. This view is developed in the excellent post ‘Holacracy Is Fundamentally Broken‘ on Forbes.

Let’s never forget that organizations and projects are first of all a human adventure!

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How IBM’s next strategic move is in Artificial Intelligence

After reinventing itself as a consulting company in the 1980s (after being a hardware company), IBM is reinventing itself again, this time around Artificial Intelligence, as described in length in this excellent NY Times article ‘IBM is counting on its bet on Watson, and paying big money for it‘. Whether that will effectively replace the struggling consulting activities remains to be seen, but this time this seems to be a major strategic move.

ibm_watsonOne of the interesting aspects from the ability to analyse large amounts of data is the possibility to help human decision. In the example quoted in the article, while in 99% of the cases of cancer diagnostics the machine arrived to the same conclusion as the experts (doctors) it also proposed in 30% of the cases alternative treatments, due to the fact it had digested the 160,000 cancer research papers published yearly.

This move away from consulting (which was very successful in the 1990s and corresponded certainly to a real need) is also another confirmation that the economic future probably lies in developing AI applications instead of IT systems consulting. Food for thought for many IT consulting companies!

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How the Collaborative Age Organization’s Network is Both Identity and Value

The Collaborative Age’s organization identifies with its network, but the network is more than that. Let’s look at it a bit more in detail.

people-in-networksThe network is composed of all stakeholders. It is from where the organization derives its direct revenue (clients) and where it creates its permanent value (collaboration between contributors). Some participants might be at some times clients and at other times contributors. Contributors may be full time or part time, or even occasional. They may have met or they may not have met. They may stay in touch with the organization loosely for some time and suddenly become very close contributors.

The network is the value of today’s organization. The network limits are a bit fuzzy and that is perfectly fine. The network is everything, and maintaining and expanding it should be the aim of all modern organizations, irrespective of if participants are within or outside the core organization.

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What Constitutes an Organization’s Identity Today

In the Industrial Age, the identity of an organization was very much defined by its physical location and assets. In the Collaborative Age, the identity of an organization is rather its network.

network-boundariesIndustrial-Age organizations had definite geographical locations that belonged to it, and often linked to very large and unmovable capital investments. It allowed to define a border between what was inside and outside of the organization. It was rare and even sometimes forbidden to go back home with anything that belonged to the organization.

In the Collaborative Age, walls and geographical locations are not so important. They may exist as just the means to an end: improve collaboration, and will generally be somewhat temporary (as they are not associated with expensive capital investments). Rather the important asset of organizations is its network, both internally and externally to the organization. And it also forms it identity, because the organization is now akin to the network it fosters.

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How Total Happiness is Not Conducive to Creativity

Being too happy makes one not so creative! That’s at least apparently the outcome of serious research quoted in this Quartz post ‘Scientists explain how happiness makes us less creative‘.

multifacemanThe gist of the argument and of the findings is that “creativity calls on persistence and problem-solving skills, not positivity“. Hence, creativity would be found in rather tougher environments where problem-solving is paramount to survival.

It is a rather similar argument about the fact that expatriation and exposure to other cultures promote creativity: because problem-solving abilities are challenged significantly when moving to another country, plus exposure to other ways of thinking, there is a good fertile soil for creativity.

On the other hand there needs to be quite some protection afforded to allow for time and reflection that are involved in creativity. Extremely tough environments will not afford that. There must be some optimal spot in between perfect bliss and total disruption.

Conclusion: to achieve a creative environment, provide a protective setting but don’t pamper people too much!

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How Electronic Services Significantly Change the Service Value Chain

In the banking industry, it is estimated that 80% of the client value (i.e. fees) is still generated by the 5% face-to-face contact. The 95% client contact through internet and mobile does not generate much value. In a context of much lower returns in general for the financial industries, banks are confronted to a key dilemma: increase e-banking and convenience but without losing opportunity for creating revenue!

bank_visits
Most younger customers never visit bank branches

This is a typical example of the impact of the Fourth Revolution on institutions. Bringing services online is not just a transpose of the actual brick and mortar relationship and value chain. It creates the question of creating a whole new value proposition.

And it so happens as well that if simple transactions can easily be carried over to online interfaces, more complex transactions still require a more in-depth contact, either by phone or face-to-face. In the banking industry those transactions carry the most fees: investments and loans. But keeping branches open create significant fixed costs that see their return diminish. The manner of implementing those interactions in an online world still remains to be invented.

The main lesson for the moment is that by bringing current services and transactions online, believing that the value proposition will remain similar is an illusion. It will change significantly and it will need to be reinvented.

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How Information Systems Are Increasingly Set Up by Everybody but the IT Department

“Kill that bulky IT department!”. That could be the war cry of many organizations these days as the influence and size of IT departments tend to diminish significantly. As a result, they don’t have the same regulation impact on investment in Information Technologies.

Two related changes are driving this transformation:

  • the move to the Cloud (and thus the lesser need for infrastructure setup and maintenance), and
  • the related fact that other departments can now spend directly for systems without any infrastructure infrastructure needs and thus without any prior authorization or even knowledge by the IT department

it_spendAccording to Gartner, 38% of IT spend in companies is now out of the hands of the IT departments and this tends to increase significantly over time [reference: attended speech from CapGemini CEO in Oct 2016]. The marketing department in particular for BtoC industries, becomes a major client for information services.

This decentralisation has many positives. In particular it removes the centralizing controlling power of the CIO which was oftentimes excessive, even taking strategic decisions without proper understanding of the business impact. It allows specialist trades to implement the tools that they really require. On the other hand it opens the door to issues related to data consistency, possibilities of business intelligence, and all sorts of security-related issues for company data. Actual control of the expenditure may also become an issue as more and more cloud services are Opex based instead of being visible, centrally authorized Capex.

In any case, for us involved in providing specialist software (cf my company ProjectAppServices), it certainly means that all our marketing effort should be directly with the user, and the IT department is just an annoyance to avoid as much as possible.

Are you fully aware of this change? If your IT department still decides everything you are going into the wall. Time to change!

 

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Why Social Media Presence is a Now a Must

Using social media today is not anymore an option. And this is the case as well in the professional world. If you don’t have any presence on Facebook or LinkedIn, or a minimum proficiency in social media, you look outdated and inadequate in the new world of work.

social_mediaLet’s thus face reality: you have to have an online presence in the world today to exist.

It is not any more adequate to take a position of ‘non interest’ or ‘privacy defense’ to justify not to use social media. Not having any social media account to relate to brands or interests will increasingly become a handicap in the world of work and beyond.

We are not obliged to share the most intimate details of our lives or the faces of our children. But a minimum online presence around our interests, and the maintenance of a minimum social network, is now a must.

Strong message for all of you that have not yet started using social media!

Hat tip to Paul Hermelin, Cap Gemini CEO, for inspiring this post from his remarks at a conference.

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How Large Companies are Actually Large Ego Boosters

I have lately had the opportunity to work at high level in a number of very large companies and I am struck how the social system of these companies is a machine to inflate egos.

egoIt may be due to the fact that in the selection process that presides over the choice of executives and senior managers, having a large ego (and its substantiation by a large company car, a corner office, a pretty secretary, a super tight calendar that can’t allow meeting for the next 3 months…) is  a discriminating factor that fosters promotion.

Anyway, this has two consequences

  • ego being tied to the job title and the associated deference within the organization, the transition will be very hard if moved out of the job or when retiring
  • as top managers will be significantly ego-driven, this may lead to derailment in decision-making with regard to the best interest of the company.

I certainly hope that over time, the organization of the Collaborative Age will be significantly less ego-driven and ego-fostering. Its less pyramidal shape, its openness should provide the necessary antidote.

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How Men and Women Employment Will Be Shaped in the Collaborative Age

While the shifts in the employment market show an increase in women taking part to the economy, it is by no means putting in question completely the role of men (see our previous post ‘Would Manhood be Destroyed by the Collaborative Age?‘). But a shift will happen with women increasingly taking salaried employment and men developing ‘artisan’ self-employment.

The factory worker, retired early 21st century
The factory worker, retired early 21st century

This substantial change, is developed in an interesting article in Playboy (which does seem to include serious papers as well!) ‘Forum: A Path for Blue-Collar Workers in the 21st Century‘ which is also commented on Marginal Revolution ‘Is there economic hope for men?

In substance, this post states that “the ways men and women fit into the economy will come to complement each other. Their roles will change, in some ways becoming more traditional and in others less: Women may be likelier to spend their careers in nine-to-five corporate positions, enjoying the regular hours, benefits and predictable pay those jobs entail. Forty-nine percent of women already work in firms with more than 500 employees, compared with 43 percent of men, and their share of the corporate pie is growing. That certainty will empower men to take on less predictable but possibly higher-paying work in self-employment.”

This is a trend I observe in my small circle of entrepreneur-friends: often the man is the entrepreneur while the woman has a stable job that provides for the family until the venture creates value.

The author continues as an apt conclusion, “A world in which men strive to learn new skills and take on riskier, entrepreneurial household roles may even prove more fulfilling than office work—but this requires changing our definition of a “good job.” Expecting men to be better-educated, office-work-oriented breadwinners is an outmoded idea. The artisan of the future will still be skilled and possess just as much potential to provide for his family. The technological revolution is yet another turn in the cycle of economic progress, and workers of both genders must learn to adapt. The end of men is not nigh; the end of our dated notion of work, however, is.”

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Would Manhood be Destroyed by the Collaborative Age?

There appears to be a number of publications about the loss of power by men in the new society, and the fact it may be a major causes of the current crisis.

Traditional Industrial Age manhood
Traditional Industrial Age manhood

One of the major pieces is a 2010 essay in The Atlantic ‘The End of Men‘ that describes how woman are taking power since the 1970s (since the wide adoption of birth control, noted by us as a key contributor to the Fourth Revolution) and how men have now lost their traditional identity of bread winner for the family. The piece even describes how active discrimination is needed to get enough men into university as women would be much more successful academically.

But these statements can sometimes go a bit over the top like in that Marginal Revolution post ‘What the hell is going on?‘ where the loss of manhood is suggested to the at the root of many contemporary political woes (“The contemporary world is not very well built for a large chunk of males“).

There is definitely a rebalancing act between men and women happening, and it is true that a lot of the blue collar jobs lost to the Fourth Revolution transformation were traditionally held by men, which creates some identity crisis. We should however probably not go to the opposite statement. After all, Silicon Valley is still struggling to get a fair share of women in startups.

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What New Institutions Are Needed for The New World of Work

The new world of work – sometimes dismissively called ‘Uber-ized’ – will require new institutions. This post from Quartz ‘How to make an Uber-ized economy work in America‘ provides some interesting clues.

uber protestBecoming a contractor is an increasing trend: “[Independent contractors] share of total employment is rising, from 9% to almost 16% between 2005 and 2015. And it’s not just low-skill, uber-drivers turning to contract work out of desperation—the increase in alternative work spans all education levels. Americans with a college degree are most likely to be contract workers, and this group saw the biggest gains. Contingent work has also become more common across a variety of industries and occupations.”

One of the main issues with the fact that we will become increasingly contractors is to manage the risk of a sudden loss of revenue; and more generally, the ups and downs of income depending on how often we provide our services. This is a problem I am managing in my consulting company, voluntarily keeping a substantial share of earnings in the company to cope with periods with lower utilization. De facto, the company is being used as an income insurance buffer. It might not be the most efficient way, but it works.

The Quartz post proposes that the state could setup a ‘wage insurance’ against substantial drop of income to cover those extreme events that can really derail one’s life. This could be a very useful institution for the Collaborative Age, together with some sort of collective health and life insurance.

What other institutions could we think of for the Collaborative Age?

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