Earlier this week I spotted a tweet by Hermanni Hyytiälä from Reaktor and it spurred me to write this article.
It is a wonderfully simple illustration making the point that the systems we build are based on the type of thinking we hold, and these two combined lead to certain outcomes. When it comes to modern day organisations, the ‘thinking’ part is still firmly founded on the history of mass production, with its origins in the early car industry. This production line view of the world, on the other hand, is very much based on the Newtonian/Cartesian deterministic model.
In plain English, the early scientific revolution and “scientism” got us to think that we can dismantle everything into pieces, and by rigorously studying those individual pieces we can understand and improve the whole. Production line as a management system for organising work is a representation of that thinking. You take a complicated end product, such as a car, and figure out how to accelerate the manufacturing and assembly of each of its parts.
Similar thinking can be seen in organisations as a whole. An organisation is a complex entity, and in order to understand and optimise it we have taken it apart, split it into functions such as HR, Procurement, Marketing, Accounting etc. Add to that different geographies, product lines, customer segments, and the modern-day love affair with cross-functional project work, and you end up with matrixes of so many layers that no one has clear understanding anymore of how the whole thing is supposed to work, who does what, and where.
These types of hierarchies in disguise and command and control organisations (system), based on determinist principles (thinking), perform well when two conditions are met: First, changes in the business environment of the organisation are predictable and take place at a slow pace. Second, the organisation itself is focused on routine, unchanging outputs, which makes optimisation (another term for incremental as opposed to radical innovation) the name of the game. Think of the early Ford motor company with only one product.
We of course know that the first condition is being challenged in almost every single industry. The speed of change has been accelerating for decades. As for the second condition, more and more organisations perform one-of-a-kind services or develop products that are unlike one another. Think of software development, video games, creative agencies, or even consumer electronics companies facing increasing pressure to create something truly innovative.
With these conditions being challenged, we need to think differently about organisations. And if the thinking–or the underlying principles and perceptions–does not change, organisational improvements are akin to tinkering and tweaking, whereas the real issue can be found at the core, at the fundamental principles of organising.
I wholeheartedly believe that the way to design better organisations can be found in complexity science. Seeing organisations as Complex Adaptive Systems gives you a whole different perspective than the traditional deterministic view. Organisations become alive, not static, and that is reflected in the design principles. The role of management changes from control to guidance. People’s innate talents have more room to flourish, and barriers to innovate get removed. Command and control does not lose its role entirely, but becomes limited to areas where it makes sense.
This is the much needed change. Complexity theory and its principles, together with the concept of Complex Adaptive Systems (thinking) form the basic foundation for designing better organisations (system).
References and further reading:
Anderson, Philip (1999). Complexity Theory and Organization Science. Organization Science, Vol. 10, No. 3, 216-232.
Brown, S. L., & Eisenhardt, K. M. (1998). Competing on the Edge: Strategy as Structured Chaos. Harvard Business Review Press.
Carlisle, Y., & McMillan, E. (2006). Innovation in organizations from a complex adaptive systems perspective. Emergence: Complexity & Organization, Vol. 8, No. 1, 2-9.
McMillan, E., & Carlisle, Y. (2007). Strategy as Order Emerging from Chaos: A Public Sector Experience. Long Range Planning, Vol. 40, Iss. 6, 574-593.
Wheatley, Margaret J. (2006). Leadership and the New Science: Discovering Order in a Chaotic World. San Francisco: Berret-Koehler Publishers, 3rd edition.