How can we organize better?

How can we organize better?

# 1: What are the problems with hierarchies? # 2: How can we combine hierarchies and use of social media? # 3: How can we create small, independent innovation teams? # 4: What if everyone votes regularly, for example on who should be leaders? # 5: What if we work independently and use social media platforms to share ideas / knowledge and get things done? # 6: How can we use markets in ways that help create win-win solutions?

Question # 1 What are the problems with hierarchies?

Power for decision making is centralized at the top CEO

CEO assistant

Department B

Department A

Department C

Department D

Level 12: Jeff Bezos.

Amazon’s hierarchy Level 11: Senior vice presidents.

Level 10: Vice presidents.

Level 9: Missing level.

Level 8: Directors.

Level 7: Senior managers with graduate degrees.

Beginning at this level, employees often have to spend a few weeks every few years at a customer service call center or a fulfillment center to get trained in the nitty-gritty tasks of lower employees.

Level 6: Senior product managers.

Level 5: Program managers or product managers.

Level 4: Generally describes a new hire, perhaps a recent graduate with a bachelor's degree.

Levels 2 and 3: Manual labourers who work in the Amazon fulfilment centres and collect an hourly wage.

Level 1: Missing level. http://mashable.com/2013/10/15/amazons-corporate-ladder/

Benefit of one-way communication: Time savings

 By commanding, assignments are coordinated fast.  By commanding, conflicts are ended fast.

Malone, Thomas W.: The Future of Work, p. 53.

http://twotheories.blogspot.ca/2009/02/overview-of-social-evolution-past.html

A problem with hierarchies

In a hierarchy, everyone tends to rise to his level of incompetence.

Sources http://www.businessweek.com/magazine/content/09_15/b4126067338870.htm http://pespmc1.vub.ac.be/peterpr.html

Another problem with hierarchies

Organization charts do not show how outside collaborators connect to support key parts of the value delivery process.

Source Kaplan, Saul. http://www.amazon.de/Business-Model-Innovation-Factory-ebook/dp/B007SIFI7C/, location 670.

More problems with hierarchies 1. Politically intelligent people are promoted.

2. Experience and holding on to the past is overweighted.

3. People who nod and obey are encouraged.

4. People who object / challenge status quo are discouraged.

5. The most productive and farsighted people are not promoted.

6. People have difficulty attracting money for investments in innovative work. https://hbr.org/2014/11/bureaucracy-must-die/

Bureaucracy is the pyramidal architecture of “command-and-control.�

Bureaucracy is based on the principles of unitary command and positional authority. https://hbr.org/2014/11/bureaucracy-must-die/

Closed system Rational actors

Social actors Adapted from: W. Richard Scott, 1981.

Machine bureaucracy

Open system

Low degree of controlling detail

High degree of controlling detail

Many controlling layers

Unmature Bureaucracy

Mature Bureaucracy

Few controlling layers

Market

Self control

The recipe for a bureaucracy

1.

2.

3.

4.

5.

6.

7.

8.

Strategy gets set at the top.

Power trickles down.

Big leaders appoint little leaders.

Individuals compete for promotion.

Compensation correlates with rank.

Tasks are assigned.

Managers assess performance.

Rules tightly circumscribe discretion.

https://hbr.org/2014/11/bureaucracy-must-die/

Question # 2 How can we combine hiearchies with the use of social media?

https://www.yammer.com/ and https://twitter.com/ are among the tools that can help get information flowing across functions and hierarchies.

Adapted from http://research.gigaom.com/2013/11/the-new-visionaries-kris-gale/

http://www.mckinsey.com/insights/organization/Revisiting_the_matrix_organization http://hbr.harvardbusiness.org/2008/06/the-secrets-to-successful-strategy-execution/ar/1

# 1 Role clarity and # 4 free flow of information are among most effective traits for creating good results.

In the collaborative model, the executive elite drive strategy and operations. They also engage in an on-going and extensive process of consensus building.

http://research.gigaom.com/2013/12/todays-business-organization-is-an-oligarchy-and-that-needs-to-change/

http://research.gigaom.com/2013/12/todays-business-organization-is-an-oligarchy-and-that-needs-to-change/

Further inspiration https://www.teacherspayteachers.com/Product/Rethinking-organization-1673492

Question # 3 How can we create small, independent innovation teams?

At Buurtzorg, there is no management structure and no hierarchy.

Teams of nurses are responsible for patients and have the autonomy to deliver the best possible care. https://www.linkedin.com/pulse/20141025094435-6099884-buurtzorg

Instead of working in separate departments, like most large corporations, the 80,000 employees working for http://www.haier.net/ work in about 2000 fluid teams.

Any employee can propose an idea and if it is voted a winner then that person becomes the team leader. The team manages itself and is responsible for the profit or loss of the project. http://knowledge.ckgsb.edu.cn/2014/12/15/china-business-strategy/the-gary-hamel-interview-unleashing-another-revolution/ http://www.destination-innovation.com/articles/meet-chinas-champion-innovator/

At http://www.haier.net/, each unit regards itself, and is evaluated, as an independent business earning a profit or loss.

Managers are there only to make sure that the [self managed] units get what they need. If managers do not help the self managed units well, people can vote managers out.

Zhang Ruimin.

http://management.fortune.cnn.com/2011/07/15/zhang-ruimin-managements-next-icon/

Define 1 product or 1 service.

Then create a multidisciplinary team of about 7 people.

This team will have total control of everything they do. It is completely autonomous and self sufficient. There is zero interruption and interference from the remaining company.

The team works like a start-up.

The goal of the team is to create a winning product / a winning service. The team is responsible for its results. https://medium.com/the-ready/the-last-re-org-youll-ever-do-f19160f61500#.42d4adn5j

Increasingly, high performing staff will demand greater autonomy - not for selfish reasons, but to get things done quickly.

http://research.gigaom.com/2013/12/todays-business-organization-is-an-oligarchy-and-that-needs-to-change/

Zappos is made up of different circles.

People can have any number of roles within those circles. http://qz.com/161210/zappos-is-going-holacratic-no-job-titles-no-managers-no-hierarchy/

Small teams at http://www.lifung.com/

http://youtu.be/6OoFZG2s2E0

Organizational structure needed to initiate an innovation

http://hbr.org/2000/03/meeting-the-challenge-of-disruptive-change/ar/5

Hewlett-Packard’s laser-printer division in Boise, Idaho, was hugely successful, enjoying high margins and a reputation for superior product quality. Unfortunately, its ink-jet project, which represented a disruptive innovation, languished inside the mainstream HP printer business. Although the processes for developing the two types of printers were basically the same, there was a difference in values.

It was not until HP’s managers decided to transfer the unit to a separate division in Vancouver, British Columbia, with the goal of competing head-to-head with its own laser business, that the ink-jet business finally became successful. http://hbr.org/2000/03/meeting-the-challenge-of-disruptive-change/ar/5

Once the acquisition’s managers are forced to adopt the buyer’s way of doing business, its capabilities will disappear.

A better strategy is to let the [acquired] business stand alone and to infuse the parent’s resources into the acquired company’s processes and values. This approach truly constitutes the acquisition of new capabilities. http://hbr.org/2000/03/meeting-the-challenge-of-disruptive-change/ar/6

P&G as well as Samsung both established innovation funds.

Investments in development of ideas, that anyone has, are made independently of the traditional budget cycle. http://blogs.hbr.org/cs/2013/03/getting_crazy_ideas_off_the_gr.html

Increasingly, coordination will come from lateral communication and social networks where peers across the organization can discover for themselves where coordination needs to happen, where we need to be working together and then solve those problems. http://knowledge.ckgsb.edu.cn/2014/12/15/china-business-strategy/the-gary-hamel-interview-unleashing-another-revolution/

Question # 4 What if everyone votes regularly, for example on who should be leaders?

Strengths of democracies

 Individuals can participate in decision making, for example by voting.  Group decisions can force individuals to do things for the overall good.

Malone, Thomas W.: The Future of Work, p. 70.

Weaknesses of democracies

 Much communication required.  Everyone’s opinions count equally - even when some people may be more competent than others.

Malone, Thomas W.: The Future of Work, p. 70.

Further inspiration https://youtu.be/TOWRoDey6Xk

Question # 5 What if we work independently and use social media platforms to share ideas / knowledge and get things done?

What if many tasks currently done by large companies were done instead by temporary combinations of small companies and independent contractors?

Taking this idea further, what if most businesses consisted of 1 single person?

Malone, Thomas W.: The Future of Work, p. 74.

IT is critical to creating organizations where  ideas are shared in an open marketplace.  people get real-time feedback from customers and peers.  relevant information from everyone gets integrated into peer-based compensation decisions. http://www.mixhackathon.org/hackathon/contribution/alternatives-bureaucratic-model

Temporary, flash communities can be formed to solve a problem or to tackle an opportunity more easily, more cheaply and faster than ever before.

https://medium.com/@EskoKilpi/connecting-the-dots-da8c91cb053a#.wxuszf8ps

The Web is an opt-in economy.

Whether contributing to a blog, working on an open source project, or sharing advice in a forum, people choose to work on the things that interest them. Everyone is an independent contractor. http://blogs.wsj.com/management/2009/03/24/the-facebook-generation-vs-the-fortune-500/

People, who do work for https://github.com/ and http://www.valvesoftware.com/, are encouraged to work on whatever they want — to find the projects that engage them.

To be done well, this self organizing and open allocation model requires that people 1. trust each other to make all their own decisions, and 2. communicate openly with everyone. https://medium.com/the-ready/the-last-re-org-youll-ever-do-f19160f61500#.42d4adn5j

http://www.valvesoftware.com/company/Valve_Handbook_LowRes.pdf

Method to working without a boss

The best kind of platform invites the involvement of diverse participants, some of whom build their own offerings, tools, and applications on top of it.

In practice, platforms typically take the form of a website, app, or other digital tool that connects different types of users. http://www.mckinsey.com/insights/organization/Organizing_for_the_future

http://www.slideshare.net/ https://www.teacherspayteachers.com/

Consider the uses of workplace platforms in hospital systems.

Nurses must constantly be matched to departments and cases, taking into consideration their specialized training, availability, doctors’ preferences, and technical requirements.

Sophisticated software can better deploy the substantial float pool of nurses and per-diem physicians, and the platform’s real-time communication tools can help frontline medical personnel access specialists immediately. http://www.mckinsey.com/insights/organization/Organizing_for_the_future

Sources https://www.betreut.ch/ https://seniorservice24.ch/

Closed system

Open system

Rational actors

Social actors Adapted from W. Richard Scott, 1981.

Platforms

https://www.atizo.com/

http://nform.com/publications/social-software-building-block

http://research.gigaom.com/2013/12/todays-business-organization-is-an-oligarchy-and-that-needs-to-change/

In any Web forum there are some individuals who command more respect and attention than others and have more influence as a consequence.

Critically, though, these individuals haven’t been appointed by some superior authority. Instead, their clout reflects the freely given approbation of their peers. http://blogs.wsj.com/management/2009/03/24/the-facebook-generation-vs-the-fortune-500/

Question # 6 How can we use markets in ways that help create win-win solutions?

http://99designs.com/

https://www.etsy.com/

Sources http://www.nachsitzen.ch/ https://tutor24.ch/

http://www.jd.com/ http://www.alibaba.com/

http://www.taobao.com/

http://www.tmall.com/

http://www.paipai.com/

Closed system Rational actors

Social actors Adapted from: W. Richard Scott, 1981.

Open system

Markets

3 strengths of markets # 1: Autonomy People have the power to decide things individually. # 2: Freedom and flexibility Anyone if free to work on any aspect of the problem.

# 3: Efficiency People move to assignments where they can generate value.

Adapted from Malone, Thomas W.: The Future of Work, p. 106.

Low degree of controlling detail

High degree of controlling detail

Many controlling layers

Unmature Bureaucracy

Mature Bureaucracy

Few controlling layers

Market

Self control

http://twotheories.blogspot.ca/2009/02/overview-of-social-evolution-past.html

As economists like Ronald Coase and Oliver Williamson have noted, markets work well when the needs of each party are simple, stable, and easy to specify, but they’re less effective when interactions are complex. http://hbr.org/2011/12/first-lets-fire-all-the-managers

Markets are very good at doing something where hierarchies typically underperform.

Over the last 50 years, the New York Stock Exchange has outperformed every company on the New York Stock Exchange. http://knowledge.ckgsb.edu.cn/2014/12/15/china-business-strategy/the-gary-hamel-interview-unleashing-another-revolution/

Weaknesses of markets

# 1: Incentive problems Agreements that would be good overall often don’t happen because they are not in the self interests of the parties involved. # 2: Communication needs A lot of communication is usually needed.

Malone, Thomas W.: The Future of Work, p. 106.

Further inspiration https://www.teacherspayteachers.com/Product/How-should-people-be-paid-1374105