How Dealing with Complexity Requires New Organization Frameworks

To those of us that are passionate about understanding how to deal with an ever increasingly complex world, I can’t recommend enough to read General McChrystal‘s book ‘Team of Teams‘.

Stanley McChrystal - team of teamsManagement models based on planning and predicting instead of resilient adaptation to changing circumstances are no longer suited to today’s challenges. Organizations must be networked, not siloed, in order to succeed. Their goal must shift from efficiency to sustained organizational adaptability. This requires dramatic shifts in mental and organizational models, as well as sustained efforts on the part of leadership to create the environment for such a change.

This is exactly the organizational approach I support for large, complex projects in my consulting role: organize projects as open space, removing people from their department of origin and creating a team cohesiveness around the common goals of the project.

It is surprising how this is still a new way of organizing work for many organizations that are still very much in the departmental, top-down industrial organization model. And, as reinforced in the book, “Efficiency is necessary but no longer sufficient to be a successful organization. It worked in the twentieth century, but it is now quickly overwhelmed by the speed and exaggerated impact of small players, such as terrorists, start-ups, and viral trends.”

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What We Should Trust From the “Man on Site”

There are two schools of thought regarding how truthful the information from the man on site can be. One school follows Winston Churchill: “Never trust the man on the spot“. Another school believes that local knowledge offers sometimes a better insight than what is available in headquarters.

Worker on construction siteWhat’s the right way about this? It’s all about what information we want to have.

Information about the actual progress and the actual situation on the ground is best retrieved from site. Far-away management does not work and leads to unrealistic assessments of the situation. I observe this effect all too often in large projects.

On the other hand, do not expect the site people to have a very worthwhile assessment of the whole strategic or even tactical picture. They can only have a limited view of the whole due to their position. The breadth of the subjects they can apprehend depends on their scope. Local representatives in a particular country will often have a much better assessment of the political situation of that entire country and what can or cannot be done than the global headquarters. A local representative on a site can only apprehend very local issues. In general I have observed that often the local representative can be trusted on a scope slightly larger than his assignment.

In general, I tend to trust more the people on site except if the topic is clearly beyond their observation range.

Churchill quote from H. R. McMaster Dereliction of Duty (a recommended read about how the US politicians and top military got embroiled in the Vietnam war)

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How Diversity Creates Value: The Business Case

There is actually a business case for diversity. Beyond the impression that diversity in a team or a business creates value by making various points of view available and opening more markets, the results are demonstrated. In the post ‘The Business Case For Diversity In The Workplace‘, a number of studies are quoted.

diversity business caseIn one study, sociologist Cedric Herring found that companies with the highest levels of racial diversity had, on average, 15 times more sales revenue than those with the lowest levels of racial diversity.

Herring found that for every percentage increase in the rate of racial or gender diversity, there was an increase in sales revenues of approximately 9 and 3 percent, respectively.

A study at the Kellogg School of Management found that diverse teams outperform homogeneous ones because the presence of group members unlike yourself causes you to think differently.

In a Catalyst report called The Bottom Line: Corporate Performance and Women’s Representation on Boards, researchers found that Fortune 500 companies with the highest representation of women board directors performed better financially than those with the lowest representation of women on their board of directors.

And [..] McKinsey found that diverse companies perform at least 35% better than their homogeneous counterparts.

The case seems to be made… even recruiting a diverse team requires us to have the discipline to overcome our natural preferences!

Hat tip to Tim Berry’s blog for the reference.

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How Our Office Space Setup Really Critically Determines Team Performance

In complex projects, open space project spaces are a must. I realize this is probably the case in most instances where complex situations have to be managed. To the point where actually, if the space is poorly adapted, performance will certainly lag.

open_space_officeIt is the experience told by General McChrystal in his highly recommended book ‘Team of Teams‘, which I will certainly comment in quite a few future posts as I believe that it is quite a fundamental book for the organization of the future.

In the book he explains the extreme organizational transformation that his special forces command had to undergo in order to be able to respond to a complex insurgency situation in Iraq and Afghanistan. The most fundamental transformation was to create a command center as an open space, with representatives of all relevant agencies and sections of the military, where open communication was promoted. It was a revolutionary move in an organization pervaded by a culture of secret and segregation of knowledge, but it worked.

What amazed me again in his description is how organizing the physical space (prolonged by a virtual space with participation of geographically removed contributors) was really the one transformation that made the change.

When I talk to clients that want to tackle complex problems, I now ask first about the type of office building. If it’s old-fashioned with closed offices and cubicles that reach the ceiling, I know we’re up for disaster.

What about your office space?

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How Artificial Intelligence is Still Mostly Human-Sourced

There is a lot of buzz nowadays about Artificial Intelligence (AI) starting to be present in our lives: virtual assistants and else. However as this excellent article in Bloomberg shows ‘The Humans Hiding Behind the Chatbots‘, this AI is still very much human powered. We are not really talking only to a clever machine, but to a system that is still highly facilitated by humans.

chess_turk
Like the chess machine, humans “turks” often hide behind Artificial Intelligence!

AI will certainly become sometimes in the future a real feature in our environment. For the moment we mainly observe systems that do increase human productivity to respond to requests. The limit is fuzzy to a real AI system that is only being administered, but we can be on the safe side to affirm that real independent AI it not there yet.

In fact, numbers are not known precisely but moderation on all social networks is certainly one of the first tasks that could be handed over to AI and at the moment it is still very much human powered (using workers from low wage countries). And that may remain the most economic option for a while.

Related posts: How humans intervene in Internet’s workings (2013)The best digital maps are created by humans and crowd-sourced (2012)

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Why Emotions Remain So Important in Organizations

Google is generally trying to use data to drive its performance. But it has found itself unable to predict the performance of teams based on data only. Actually it was more about emotional interactions. This research – the Aristotle project – is explained in a very interesting NYT article, ‘What Google Learned from Its Quest for the Perfect Team‘.

emotions at workProject Aristotle is a reminder that when companies try to optimize everything, it’s sometimes easy to forget that success is often built on experiences — like emotional interactions and complicated conversations and discussions of who we want to be and how our teammates make us feel — that can’t really be optimized.

As Hugh MacLeod (Gapingvoid) puts it, “Why is business so hard? Simply put, we think it is due to a lack of humanity. Our obsession with data is conflated with a belief that emotion in business is bad: Data and emotion are incompatible, so we have a bias against connecting emotion to business and we work in sterile workplaces that do not value our humanity.

But what happens, when the data support the paradox that it is our emotional connections that create better, more efficient, smarter work?

Let’s develop emotional connection to create more efficient work.

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How Long Complex Projects Require Regular Reorganization

One of the interesting properties of long and complex projects or programs is the need to periodically re-assess and remodel the delivery organization. Many project managers shy away from such reorganization, in particular because of rigidity often imposed by management and/or the client. However they should implement them proactively.

reorganizationThe organization needs to be adapted every few months to the new focus and challenge that arises from the progressive execution of the project. Complex projects and projects that develop over a long time are not like manufacturing organizations, the scope and even the composition of the team will evolve over time and this needs to be taken into account.

Having a single, rigid, preset organization will necessarily lead to disaster and low morale as contributors struggle to make sense of the evolution of their scope and do not concentrate on what is important for the project at that particular moment.

It is sometimes interesting to have an external advisor giving a view on the adequacy of the current organization and how it should evolve.

In long complex projects, do not take the organization for granted. It needs to evolve regularly, and this is a key success factor.

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Why It is Important to Take the Time for Real Work

At many companies the proportion [of responding to emails and other solicitations] hovers around 80%, leaving employees little time for all the critical work they must complete on their own” (HBR – Collaborative Overload). That is evidently consistent with daily observations in most organizations today (when it is not 100% of the time spent interacting, and the important work done on overtime). Yet value is created mainly when one does the real work – reflection, strategic planning and research. There is thus an interesting contradiction, which is mostly created by the bureaucratic effect (organizations creating work for themselves with low value for the client).

collaboration excess
Collaboration Excess?

Reserving certain space for doing the important creative work is an increasingly demanding challenge, in particular in international organizations where time differences add to the calendar strain, and with the interruptions from smartphones. Yet it is so essential to create that value that it is nowadays a strong differentiator in the workplace.

It has actually come to a point where so many people are just reacting to the influx of information and triggers that it is less difficult than before to make a difference by taking some time on some longer term projects and contributions. For example, as a consultant, not being involved in the daily grind of my clients’ organizations is a tremendous competitive advantage that allows me to create value much quicker and effectively than if I was an insider.

Multiply your effectiveness by reserving 20% of your time for an interruption-free focused work on important matters. It will increase significantly your impact and make the difference!

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How Institutions Design Human Nature

In this interesting TED talk ‘The way we think about work is broken‘, Barry Schwartz describes how society and institutions shapes the way we think and we are – our human nature.

The military, an institution that definitely influences human nature
The military, an institution that definitely influences human nature

He elaborates how the Industrial production system (Adam Smith) aimed at making us cogs in a system with limited initiative, and how this shaped human nature in the past decades. “It is only human nature to have a human nature that is very much the product of the society in which people live. That human nature, that is to say our human nature, is much more created than it is discovered. We design human nature by designing the institutions within which people live and work.” Barry Schwartz then calls for decision-makers to shape their organizations and institutions in a manner that would create a new type of human nature in the Collaborative Age.

What I find interesting in the concept is to consider how institutions do influence human nature. It is quite true in a way, as we tend to act and respond according to some learned patterns from institutions and organizations we served; probably with some limits I think. But then as institutions evolve or are replaced, human nature needs to fit in a new way of being in society. That is possibly the most challenging side of the Fourth Revolution – former human nature will become obsolete as new institutions will shape another new one. And which sides of human nature do we want to develop?

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How Decentralized Organizations Can be Effective

In the early 20th century, big companies were synonymous with efficiency. In the late 20th century they were synonymous with inefficiency.” writes Paul Graham in his post ‘Refragmentation‘.

centralize_decentralizeThis is of course a bit simplified, however it fits with the historic trend of outsourcing and contracting a lot of the value chain out of the main industrial conglomerates into networks of suppliers and contractors, and the emergence of loose networks of small entities that prove to be more flexible and resilient than large organizations.

At the same time to be successful in large endeavors and projects, large organizations are still needed to leverage the appropriate financing and create the local conditions of low complexity and alignment that are necessary to make these endeavors successful.

It is difficult to combine the flexibility of networks of small, relatively independent entities with the coherence and leverage that are necessary for large endeavors. There is no fixed recipe, however that is probably quite the form of organization that will be the future in the Collaborative Age. We need to find the right approaches, and that is certainly one the challenges I encounter on a regular basis in my consulting activities.

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Why We Should Reconsider The Reason We’re Doing Startups

In this refreshing post ‘Reconsider‘, David Hansson, the cofounder of Basecamp, exposes his philosophy of startups and why he considers the general view of looking for fast-growing, billion dollar valuation startups to be a general conspiracy.

Life is too short not to to do something that mattersPart of the problem seems to be that nobody these days is content to merely put their dent in the universe. No, they have to fucking own the universe. It’s not enough to be in the market, they have to dominate it. It’s not enough to serve customers, they have to capture them.”

On the contrary, David explains his approach: “I wanted to work for myself. Walk to my own beat. Chart my own path. Call it like I saw it, and not worry about what dudes in suits thought of that.” He then declines it on several dimensions:

  • “I wanted to make a product and sell it directly to people who’d care about its quality.”
  • “I wanted to put down roots. Long term bonds with coworkers and customers and the product.”
  • “I wanted the best odds I could possibly get at attaining the tipping point of financial stability.”
  • “I wanted a life beyond work.”

I am personally rather on his small, human adventure side. What serves to develop a great venture that will eat me out? Let’s make a significant dent in the universe and stay small and human. And we can do so today with the internet and the Fourth Revolution. Be small and have a global impact.

“Life is too short not to do something that matters”: It can matter immensely and still remain small and human.

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How Collaborative Networks Always Rely on Few People

In collaborative networks, forums and wikis, actual production only relies on a small percentage of users. This is confirmed in a business environment in a post from the Harvard Business Review ‘Collaborative Overload‘: “In most cases, 20% to 35% of value-added collaborations come from only 3% to 5% of employees“.

cogsThe reasons are multiple:

  • Collaborative systems act as complex systems and hence, contribution follow a ‘long tail’ curve: major contributors really produce a large part of the value (however the aggregated value of the contributions of all the others should not be neglected)
  • Most users generate interactions of low value to the community
  • Most users are swamped by daily urgencies and do not have the time to do longer term contributions.

This small percentage has an interesting implication when it comes to organizations’ internal collaborative networks – they can only work if there is a sufficient number of potential users so that the core group of 3-5% of users generating most of the value is large enough. That is why a minimum of a few hundred to a few thousand potential users is necessary for successful internal collaborative networks.

The entire HBR’s paper is quite an interesting read as it focuses on the emotional drain for the key collaboration contributors and the fact that their contribution is often not recognized enough.

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