Designing Dynamic Organisations

Shifting hierarchies – moving from ‘who is the boss?’ to ‘how do we work?’

For the past few hundred years, we constructed organisations by ‘hiring the right person for the right job’. However, in a globalised, connected, and rapidly-changing market, job descriptions are constantly evolving, and making all decisions top-down is impossible. For an organisation to thrive in the current landscape, we cannot rely on fairweather, flawless leadership but on having the right processes and culture to enable collective intelligence (rain or shine).

Traditional organisations are constructed as a pyramidal hierarchy, reflected in their default mapping tool, the organisational chart. This model is unidirectional with success reliant on the person occupying the top position and the induction of them selecting each candidate for subsequent roles. Some managers will be very consultative, while others tend towards seeking consensus; some will involve their teams in preliminary discussions, others will decide everything in isolation. But in most organisations, decision-making processes are relegated to the abstract domains of culture or leadership style, instead of being designed explicitly.

Problematically, when the processes to make decisions are left undefined, they tend to change with the humour and preferences of each boss. This local or time-bound adaptation is not intrinsically negative, however, leaving processes undefined and allowing them to oscillate at will, creates uncertainty and makes it hard for employees to collaborate across teams and departments.

As a result, proactive employees have few choices besides escalating each and every issue to those above (yielding bottlenecks) or using soft power and back channels (which foster office politics). Unsurprisingly, traditional organisations, suffer from silos and spend in the £100,000s on consultancy and other support systems every time they face adversity or change.

Until recently, the focus on authority over process was perfectly excusable. We didn’t have any tools to visualise an organisation besides the Organisation Chart, communication software was designed for top-down broadcasting, and bosses were fearful that they would no longer be needed in the new system. But, as it turns out, the knowledge and skills of senior leaders are as necessary as always (although their jobs do change slightly and largely for the better), lateral communication platforms have become ubiquitous, and we have developed tools to map organisations through processes instead of hierarchies.

Companies are adapting and experimenting with everything from complicated matrix organisations to self-organising teams, flatter hierarchies, and networked models. However, most companies are still stuck in a paradigm that focuses on ‘who is in charge’ over ‘how decisions are made’.

But isn’t having the right people a guarantee of perfect process?

Not quite. Let’s take Tom Wujec’s famous experiment on team performance, where different groups are challenged to build the tallest tower with dry spaghetti and marshmallows. In his experiment, teams of CEOs and MBAs routinely underperform when compared to kindergartners. However, when an executive administrator is added to the CEOs’ team, the mixed team surpass the children. Executive admins are not experts in building spaghetti towers, nor do they take the “leadership role” in the team nor possess specialised skills such as engineering or architecture. Instead, admins contribute by dedicating their attention to process and facilitation, thus improving the CEOs team performance by more than 30%.

A way forward

Most organisations don’t have the budget to bring a professional facilitator to every meeting. However, an Organisational Designer can easily create frameworks and toolkits for an organisation. Explicit processes for decision-making and interaction across teams enable organisations to change themselves instead of relying on outsiders or top-down reorganisations. In turn, this improves engagement as employees become both empowered, and responsible for their own fate.

The shift away from undefined decision-making processes also changes how members perceive and exercise leadership in the organisation. In traditional organisations, “leading by example” is touted as a fundamental necessity. However, in practice, it is also the frequent culprit of most dramas. An over reliance on “leading by example” equates to expecting those in a position of authority to always be exemplary. Whether that means being a flawless servant-leader or flawless top-down commander is irrelevant. Leading by example places an unreasonable demand on leaders to be constantly at the top of their game, so even the best will, at some point, let us down.

When we shift the focus to processes, “leadership” does not become unimportant, quite the contrary. Leadership is too important to leave it hanging on a single individual without any other mechanism to fall back on during their dark hour. By shifting the responsibility from the individual to the system of processes, people are under less pressure to cover up their mistakes, allowing the whole team to exercise leadership in framing problems as a learning opportunity and evolving the system. Through constant learning and adaptation, an organisation becomes “anti-fragile”; and by codifying these learnings into processes, knowledge is retained, even after those involved have moved on.

So… how does it look in practice?

A range of innovative organisations has already adopted this mindset shift, giving us food for inspiration:

Quanta – A Latin-American pharmaceutical company, adapted its recruitment practice to start discussing how management processes should align with the company values even before a manager or employee is hired. As part of the recruitment process, candidates are asked to write an essay explaining how they have adapted and plan to adapt work processes to match the company values. The company gives extra points to those showcasing a more systematic approach and to those who involve their teams.

StartupGuide – A startup with a multinational footprint, replaces the organisation chart with a map that specifies who is responsible for decisions in each area as well as who needs to be consulted or informed. Since each person can take on different roles across multiple areas, this map allows both employees and external agents to understand what is expected of them and how they can influence the organisation without regressing to back channels or lobbying those above them for special attention.

Cocoon project – An innovation consultancy, has developed its own “decision-making toolkit” which is given to all contributors to use as part of their daily operations. Moreover, they have designed their key meetings with specific decision-making frameworks for either governance or tactics. This set-up allows Cocoon to work with a fluid workforce, including a large number of part-time collaborators, without compromising the discipline of their operation.

A move away from “WHO is in charge?” and towards “HOW do we make decisions?” enables organisations to become more agile and resilient. It can also repurpose the energy wasted in office politics towards collaboration. However, it is not enough to copy a couple of practices. Process-focus is fundamentally a mindset and culture; and leveraging its full potential, a journey.

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