1. What are the deep-seated impediments, or “design flaws,” that limit the capacity of organizations to adapt (to change without trauma); to innovate (to mobilize the imagination of everyone, every day); and to engage (to create environments that inspire extraordinary contributions)?
There are three core “design flaws,” each of which matches generally with one of the three challenges, although they also overlap and interrelate:
1) Weak adaptation: Flat salaries based on time passing (rather than achievements or being billable for clear tasks on a project), combined with people fiercely defending the “turf” of their territorial job descriptions, create an inertial bias towards stasis (“just mark time as comfortably as you can to make money, and be passive aggressive to make sure nobody rocks the boat in your job domain”). Only top management has an incentive to drive through disruptive change, but they’re pushing against an incredibly resistant organization with tremendous inertia.
2) Weak innovation: A hierarchical chain of bosses, any of which can say “No” to kill any new ideas, or to anything that threatens their power, interests, or the status quo.
3) Weak engagement: The straight-jacket of constraining job descriptions. Few employees are likely to be in the “Flow” state of optimal productivity (not bored or burned-out/overwhelmed) unless they can control their portfolio of roles to stay in that “zone.”
2. Given these systemic impediments, and the new demands that will confront organizations in the years ahead, what should be the agenda for 21st century management innovators? That is, what are the “moonshot challenges” that must be addressed if we are to create organizations that are truly fit for the future?
Organizations need to be more like the free market Silicon Valley ecosystem internally:
1) Compensation driven by value-added accomplishments (billable time for clear tasks on projects) rather than general time passing, creating an instant constituency for change, improvement, and adaptation.
2) Nobody’s “turf” is sacred – anybody can be challenged at any time.
3) A new idea can seek support/resources from multiple sources throughout the organization – no single gatekeeper, or, worse, a chain of hierarchical gatekeepers. Imagine if Silicon Valley had only one VC firm…
4) Replace single jobs with portfolios of ever-shifting roles so people can keep themselves in the highly engaged “Flow” state. Employees can trade roles with each other – for instance, passing down a role that has become stale and boring for one employee to another who sees it as a promotion to a new and challenging opportunity. This portfolio approach will also help reduce unproductive territorial defensiveness of job “turf,” since it’s only one part of their broader portfolio of roles.
The moonshot challenge is this: How can organizations become more like the Silicon Valley ecosystem internally, while avoiding anarchy, presenting a single face to the world, and acting in a cohesive strategic direction?
3. Can we imagine, even in outline form, some potential solutions to these challenges, and if so, what sorts of experiments might be useful in helping us to test these ideas in real world settings?
At OpenTeams, we call it the Open Model Entrepreneurial Organization (OMEO). The “entrepreneurial” part is obvious from the description above. What the “open model” is referring to is breaking up our single monolithic hierarchical organization maps into two parts: 1) an “open model” of all the assets, systems, processes, and day-to-day operational roles in the company, and 2) a collection self-organizing employees (with their own portfolios of project-based roles) as well as funding sponsors (“internal venture capitalists”) to support projects to change the open model (adapt, innovate, improve). Of course, individuals could straddle both parts of the organization with a combination of both operational and project roles – or even an internal venture capitalist role if they are given discretionary time to invest (as Google famously does with their engineers’ “20% time”).
4. More generally, what could be done to help accelerate the evolution of management in the years to come, that is, what is it that limits the pace of management innovation and how might these limits be overcome?
If you look at the case study of the transition from Manufacturing 1.0 (Ford) to 2.0 (Toyota), it took Edwards Deming influencing a prototype flagship company that became the paragon role model for industrial companies around the world. We need a similar prototype flagship for Management 2.0. It must be widely acknowledged as far more adaptive, innovative, and engaging than normal companies, and it must do it with a *system*, not just culture or leadership personalities. Once Management 2.0 has proven itself in a high-profile company, other companies will flock to emulate it, just as they did for Toyota.