New organisations and new work

A historical take on new organisational forms and new work

I’ve spent some time sitting in meetings hearing people say that we don’t have an exact idea about how new work will ultimately look like. Given the variety of enterprises applying new models and the different flavors of leadership you would think that organizational structures would greatly differ. But legitimate cautious mitigations and a shareholder centric mindset have led to similar applications or even copies of the same models within industries. Now, just a few months back the pandemic has challenged the status quo. Also, people started to voice some questions. There is the technological side of data and information management, the organizational structure, the way relationships are represented, work is structured and performance is indicated with the underlying and consequential questions of budget and ROI. I believe the pandemic carries a promise of a phenomenal opportunity if you are willing to reconsider your preferences and are open to new ways of thinking to seize the tide. Everyone had to stay at home and work remotely, all of a sudden organizations and leaders had to deal with virtual teams. Let’s make the case that all of us have had a vision of where we could go. So now as we will slowly start to cope with the distresses and severity of the situation you might want to collect those visions on a whiteboard and share them within your organization. But also, let’s pause for a moment to map out where we are coming from in our organizational development history. We can think of classic line-organisations, matrix-organisations, holacracy, agile, collegial or network structures.

It’s amazing to look at moments in time where society enjoyed leapfrog development. Just like the time around 1910 or 1960-70, the era of the moon landing. Many organizational forms, societal ideas and conception of man institutionalized during that time are still applied in todays’ organisations.

Frederick Taylor was an innovator of his time, as he introduced his works such as „Shop Management“ or the „The Principles of Scientific Management“ (1903-1915). The idea of dividing tasks where some where thinking and distributing work while others where producing according to clear processes was a trail-blazing idea at the time. Funny if you think about how we just don’t know how todays innovations will be seen 100 years from now. Today Taylorism is no longer “en vogue” and will be dismissed as it has developed into an invective for an old view and conception of man. Still if you think about the processes within your organization, process optimization really is something that needs to be considered all the time. With every new strategy, implementation of a new technology and the corresponding target operating models. All of this requires new thinking and change of mindset. Today everyone within the organization is engaged in this process.

Let’s take Douglas McGregor and his management theory X and Y from 1960s. He stated that according to theory X people are lazy, do not want to perform and one has to drive and push them to accomplish anything. That’s the contrast to theory Y where people are seen to have an own motivational driving system, are performance oriented and want to contribute. Of course, everyone says they are theory Y. But looking at enterprises you’ll see many different points of view and that things are being done in many different ways.

Peoples’ attitude towards work has changed over time. Again around 1960-70 a common idea was to go to the factory or the office to do a 9 to 5. There was a timestamp to check in and out. Workers were loyal to their employers. There was a clear service is service and liquor is liquor mentality. Workers thought to themselves they are telling me exactly what to do and they are looking after me in return. This attitude was invigorated by a psychological contract and the stigma around the topic of unemployment. Today we still have a psychological contract aside the legally binding one with implicit expectations between the employer and employees. But today the psychological contract is a very different one.

Sociocratic organisations

Sociocratic organisations developed around the 1960s wanted to breake up the top down vacuum. There were representants in lower triangle systems who were selected to report into an upper triangle to generate an influx of input and information buttom-up.

This changed the direction of power and decision making. In terms of communication structures there was a discussion around the differentiation of the terms consensus vs consent. While in seeking consensus making, we present decisions to a group of people that everyone can agree with, in finding consent we seek a way to eliminate relevant objections that could hinder getting to a decision. There are several ways and procedures to achieve consent.

Today in traditionally organised companies we usually seek for consensus, and we try to bridge opinions by looking for compromises. But we do this without a structured procedure to examine an objection and how we could integrate and solve it.

Holacracy

Truly sociocratic organisations are not well established in business. There are some companies in the Nordics and the USA and there are non-profit organisations worldwide giving an example of how things could work in such structures. Holacracy is such an example. It was developed by Brian Robertson (amongst others) as an advancement of sociocracy. Holacracy is an operation system that can be applied to any organizational form. The principles are about giving power to an organism through signing the constitution of Holacracy ONE and applying the method as stated in the constitution. The constitution tells you that you are about to be working in the system with your own operational tasks and function in the system. While at the same time you have the institutionalized possibility to work on the system for continuous further development. The basic idea is: change behavior first, the mindset will follow. There are tactical levels, operative value creation and governance structures to change the organism.  Organizational development is done in structured meetings and tensions are seen as driving forces. Tensions experienced in daily work are taken into the tactical or governance meeting. Someone in a role being responsible for communication can experience tension because they don’t get content delivered. Then there is a decision-making procedure where people can make suggestions on how to develop a solution in real time; fast and on the spot to solve the tension. Then we ask if anyone has objections that will be tested before validation. A common test question is: «if we use this solution by the way we just designed it and implement it to practice, will there be a non-revisable damage for our organization? » Clearly in this setting we don’t want the perfect solution. We want the organization to act and have to ask if the solution is safe enough to try.

Holacracy offers a recipe for tactical procedures and governance meetings because there is little formal exchange at interpersonal levels. As a consequence, the operational system is a game changer being practical and authentic but it lacks of any human touch.

Sociocracy 3.0

Bernhard Buckenbrink and James Briest have developed Sociocracy 3.0 and enriched it with agile operation principles and an agile mindset.

Sociocracy 3.0 is no operation system alike Holacracy with a constitution but there are 70 different paradigms and models to implement to an existing established organization step by step. It’s a developmental path to choose while one can go in a modular way starting with implementing decision making, feedback, or consens making principles. The principles to consider are similar to the agile manifest of equality and transparency. But it is also somewhat alike a toolbox. You can take out what is currently needed.

As it is demanding to develop an organisation from 0 to 1 Sociocracy 3.0 can offer a flexible solution to modularly pick single elements and integrate them into the company depending on where it stands right now.

The collegial circle model

The collegial circle model highlights a possible organisational structure applying the principles of sociocracy 3.0 and how it could function. It is not as rigid as Holacracy (where you have the rules and there are no others) but a possible example. Bernd Österreich has developed the circle model (2012) as a guideline in his book «Collegial Leadership» the book also contains an abstract about organizational forms and how the circle model works. The idea is built with a shu-ha-ri principle which is a Japanese martial art concept that describes the stages of learning to mastery and thereby showcases principles for learning and development.

The architecture of this model is about getting a first distinction between the market and ownership represented in the circle. At the outer circle the value creation structure is represented with all the value creation areas, units and elements of providing direct value creation. In a second circle the central services are integrated along with the supportive functions. At the center of the circle you’ll find all groups with a co-ordinational function, such as strategy.

Looking at the level of a single circle you get to see how a team could be collaborating and how leadership functions are distributed onto many shoulders. You see different tasks of a leader: there is a host who makes sure interaction and exchange is taking place regularly within a circle, that people are informed and are feeling well.

There are coordinating functions who coordinate with the above level circle. And there is the role of an economist, who makes sure the circle is acting as economically as anticipated.

The collegial circle is always about that cycle of: “inform, lead, follow and reflect”.

While traditional top-down leadership models take the point of view that everyone wants to be lead-on. Leadership and followership in a collegial circle are seen from the point of view of the role and function within a circle. A person can be in a leadership role in one circle while being clearly a follower in other circles.

The Agile Manifest

Then we have the Spotify model which is a mix of a line structure and sociocracy. This model is mainly used in an agile context while there are Tribes, Squads, Chapters and Guilds. It’s also being used in the development method of SCRUM. It states that these teams are functioning in a self-organized way while they resemble to operate in a sort of Matrix organisation. Several development teams are combined in a tribe that has a tribe lead. There are overall professional groups with specific Chapters of software testers, who compare notes in a cross-disciplinary way. Guilds are sections who exchange over different Tribes throughout the entire organisation. It’s a safe model to scale agile methods from a single team and transfer results onto the entire organisation.

Before the pandemic many organisations have been at the stage of the Spotify model, being agile or acting agile. Some have gotten to some sort of collegial circle formation or network system collaborations.

This is the area where our Talent- und Performance Management is located. We like to see our services and tools to bridge todays and the future challenges of work from an individual as well as from a corporate people strategy perspective.

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