On designing organisations

As I was doing the literature review for my MSc thesis this summer, reading about uncertainty, I got in my head the idea that I probably should check what has been written about complexity, as those two things seemed related. Little did I know what I was getting myself into. The result was some very exciting ideas and profound changes in my thinking.

Getting myself familiar with articles by various scholars, as well as books such as Margaret Wheatley's Leadership and the New Science and Peter Senge's The Fifth Discipline brought forth the notion of complex adaptive systems, and I think within this concept lies the future of how organisations should be designed in order to thrive in a business environment that is constantly changing. (1, 2, 3, 4, 5)

Even though the management and design of organisations have evolved from the days of Scientific Management, they are arguably still rooted in the same Newtonian/Cartesian paradigm that makes us see organisations essentially as mechanistic - as opposed to human - systems. A paradigm that assumes that systems can be understood by studying their constituent parts in isolation. This is exemplified in the methods and vocabulary of organisation design; how organisations are largely treated as a collection of functions, jobs, positions, departments, hierarchies, reporting relationships etc. Static pieces of machinery.

Management of organisations, when based on the Newtonian/Cartesian principles, is nothing but an attempt to create order from chaos with the end goal of improving the production of routine outputs. This form of thinking has its roots in the production line and has since crept upon all aspects of organisations. Efficiency is the ultimate goal. Not even innovation management has succeeded in escaping the organisation as a machine. In such a clockwork system stock arrives just-in-time and production can quickly adapt to changes in demand. And anything that can cause a disturbance in that system is seen as a threat that needs to be eliminated. (6)

What is especially disturbing about this belief system - and yes, it is a belief system, nothing more - is that when taken to its logical conclusion the end result is death: A perfect mechanistic organisation has reached the point where all variation is eliminated. It is a machine that happily does what it was set out to do, always in the same way, and always with the same results. And for this to happen the people within that organisation, within that machine, have to become equally invariable parts of it.

Imagine living every day of your (working) life exactly the same way. Same routines in the morning, same tasks performed always in the same way at work, same food for lunch, same activities in the evening after work. After all, we would not want to do anything that causes variance in behaviour and performance the following day. This is not a description of life, but of death. There is movement, like in the blowing of the wind, but that does not mean the wind is alive.

I wonder how many managers can actually identify the core assumptions that lie behind the way their organisations have been designed to operate...

Luckily, however, the reality of the world we live in makes a perfect mechanistic organisation practically impossible. Well, not exactly impossible but inefficient and a poor match to its environment, leading it to be destroyed by selection pressure. Chaos, uncertainty, and unpredictability are essential characteristics of life which ensure that we never reach the state of efficient stagnation that traditional management practice secretly desires. Life itself changes and evolves, and as a result nothing will remain the same. It's just that the speed of change may vary. Many  organisations built on mechanistic principles have learned this the hard way. They are either gone or in a state of permanent decline. Entrepreneurship, incidentally, is one of the many forces contributing to the chaos in the business environment, creating selection pressures to established organisations. (7, 8)

What emerges from this line of thinking is a worldview where organisations striving to reach stability - meaning efficient production of routine outputs - will not survive the next big change in the ever-evolving environment. And this brings us back to the concept of complex adaptive systems. Instead of being designed to create order from chaos, organisations need to be designed to thrive in chaos. Not just to withstand or tolerate changes, but to actually become stronger through them. The two perspectives are fundamentally different in how they affect management, business strategy, organisation design, and the process of organising itself. (9, 10)

This is a topic I intend to focus on more carefully in the coming months, in the writings in this blog, as well as in my research. Consider this article as a sort of an introduction, or an invitation, to a journey that aims to challenge some of the very basic assumptions we have about organisations, and to discover ways to make them truly fit for this complex and continuously changing world we live in.

References:

(1) Wheatley, Margaret J. (2006). Leadership and the New Science: Discovering Order in a Chaotic World. San Francisco: Berret-Koehler Publishers, 3rd edition.

(2) Anderson, Philip (1999). Complexity Theory and Organization Science. Organization Science, Vol. 10, No. 3, 216-232.

(3) Senge, Peter M. (2006). The Fifth Discipline (Revised Edition), London: Random House.

(4) Arthur, W. Brian (1999). Complexity and the Economy. Science, Vol. 284, 107-109.

(5) Gell-Mann, Murray (1994). Complex Adaptive Systems. In Cowan, G., Pines, D., & Meltzer, D. (Eds.) Complexity: Metaphors, Models, and Reality, Addison-Wesley. 17-29.

(6) Cooke-Davies, T., Cicmil, S., Crawford, L., & Richardson, K. (2007). We're Not In Kansas Anymore, Toto: Mapping the Strange Landscape of Complexity Theory, and Its Relationship to Project Management. Project Management Journal, Vol. 38, No. 2, 50-61.

(7) Sarasvathy, Saras D., Dew, N., Read, S., & Wiltbank, R. (2008). Designing Organizations that Design Environments: Lessons from Entrepreneurial Expertise. Organization Studies, 29(03), 331-350.

(8) Sarasvathy, S. D., & Dew, N. (2005). Entrepreneurial logics for a technology of foolishness. Scandinavian Journal of Management, 21, 385-406.

(9) Eisenhardt, K. M., & Brown, S. L. (1998). Competing on the Edge: Strategy as Structured Chaos. Long Range Planning, Vol. 31, No. 5, 786-789.

(10) Drazin, R., & Sandelands, L. (1992). Autogenesis: A Perspective on the Process of Organizing. Organization Science, Vol. 3, No. 2, 230-249.