Morning Star is one of the world’s leading processors of tomatoes—and one of the most progressive models of a self-managed enterprise we’ve seen. The company was founded in 1970 with a distinct philosophy: people are most productive, creative and happy when they have personal control over their own lives. And the best organizations are those in which people are not managed by directive from above but when coordination happens among peers who manage their own relationships and commitments. In the last 30 years, founder Chris Rufer and his colleagues have built a company to bring that philosophy to life: no bosses, no titles, not job descriptions, and a sweeping scope of authority for every individual. ... At the heart of this peer-regulated collection of colleagues who determine their own roles and responsibilities is the “Colleague Letter of Understanding” or CLOU. Four years ago, the company introduced a custom social network to support a more dynamic, transparent, and scalable approach to self-management. Today, an ever-evolving (and immediately visible) network serves as “org chart” and peer-to-peer responsiveness replaces hierarchical control.If you'd like to learn more, check out the Self-Management Institute.
The boss-less organization: From bosses to mentor/investors
A hack from Tory Gattis
How do you move from a “command-and-control” leadership structure to one focused on motivating and mentoring? That’s the challenge Tory Gattis, founder of OpenTeams, takes on in his hack. Gattis argues that organizations need to abandon the boss-subordinate hierarchy in favor a new relationship that brings internal “mentor investors” together with intrapreneurial teams. Like Silicon Valley’s angel investors, mentors would provide funding, offer advice and make connections—but wouldn’t directly manage.
Key elements of the hack: Employees pitch ideas for investment—for a small project aimed at operational improvement or something grander. There is a large network of mentor investors who are able to provide funding and project teams are free to shop their ideas around. Investors can form syndicates to back bigger, riskier investments. Over time, successful investors and teams would command a larger share of resources.
In an organization built around Gattis’ hack, every idea would have the chance to compete on an equal footing and no single manager would have the power to kill a great idea. That would be a huge spur for innovation and proactive change.
"That’s really the great mystery about bureaucracies. Why is it so often that the best people are stuck in the middle and the people who are running things—the leaders—are the mediocrities? Because excellence isn’t usually what gets you up the greasy pole. What gets you up is a talent for maneuvering. Kissing up to the people above you, kicking down to the people below you. Pleasing your teachers, pleasing your superiors, picking a powerful mentor and riding his coattails until it’s time to stab him in the back. Jumping through hoops. Getting along by going along. Being whatever other people want you to be, so that it finally comes to seem that, like the manager of the Central Station, you have nothing inside you at all. Not taking stupid risks like trying to change how things are done or question why they’re done. Just keeping the routine going.And that's why Management 2.0, Organization 2.0, the Bossless Organization, or whatever you want to call it is so critical to the future of not just our country, but all of human civilization.
...environments where what is rewarded above all is conformity... I realized that this is a national problem. We have a crisis of leadership in this country, in every institution."
I'm so pleased to inform you that you've won an M-Prize for the Hack you contributed to the MIX: The Bossless Organization: From Bosses to Mentor InvestorsJudges for the M-Prize included CEOs and thought leaders such as Harvard professor and former Medtronic CEO Bill George, W.L Gore's CEO Terri Kelly, Whole Foods' Founder and CEO John Mackey, "Future of Work" MIT professor Tom Malone, and venture capitalist Leighton Read. I'd say that's quite a list of endorsements!
We combed through hundreds of contributions from MIXers from around the world and from every kind of organization—looking for boldness, originality, thoroughness, and the ability to inspire and instruct in equal measure. We certainly found those qualities in your contribution!
The official announcement of the winners is tomorrow morning (10am EST). The McKinsey Quarterly will publish an article about the M-Prize and will send an alert to hundreds of thousands of subscribers. We'll celebrate you and your fellow winners on the MIX home page, M-Prize page and in a series of blog posts from me and Gary Hamel. You'll also receive recognition on the MIX and the Quarterly's Facebook and Twitter streams and in a variety of our partner's forums (from the Wall Street Journal to opensource.com). We'll keep you posted as these announcements go live. And, of course, you are now a lucky ticket holder for the 2011 World Innovation Forum.
The BP oil spill disaster has shown us all too vividly the catastrophic consequences of excessive organizational complexity and the potential risks to corporate longevity. This paper sets out a model for both the horizontal and vertical compression of organizations to simplify them for enhanced risk mitigation, with additional benefits for innovation, decision-making, employee engagement and action. Horizontal compression involves complex systems visualization, modeling, and simulation for cross-organizational integrated solutions, leading to better decision-making, action, and risk mitigation. We also propose vertical compression of the bureaucratic, command-and-control hierarchy into a flat, entrepreneurial, market-based, self-organizing Bossless Organization. This model is inspired by the Silicon Valley and open source ecosystems to improve innovation, employee engagement, and adaptation to the rapidly changing business environment. Bosses are replaced by non-controlling Mentor Investors—modeled on the angel investors of Silicon Valley—who then sponsor self-organizing, intrapreneurial project teams. Linus’ Law of the open source movement also enhances risk mitigation (and therefore corporate longevity): “Given enough eyeballs, all bugs are shallow.” The combined horizontal and vertical compression components of the SIDEARM model can provide a powerful and sustainable competitive advantage to any organization.If you have any questions or would like to explore the SIDEARM model for your organization, please don't hesitate to comment here or contact Howard or myself (tgattis (at) openteams.com).
...the trends here are big and undeniable. Change is rapidly accelerating. Transaction costs are rapidly diminishing. And as a result, everything we learned in the last century about managing large corporations is in need of a serious rethink. We have both a need and an opportunity to devise a new form of economic organization, and a new science of management, that can deal with the breakneck realities of 21st century change.
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The new model will have to be more like the marketplace, and less like corporations of the past. It will need to be flexible, agile, able to quickly adjust to market developments, and ruthless in reallocating resources to new opportunities.
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This is the core of the innovator's dilemma. The big companies Mr. Christensen studied failed, not necessarily because they didn't see the coming innovations, but because they failed to adequately invest in those innovations. To avoid this problem, the people who control large pools of capital need to act more like venture capitalists, and less like corporate finance departments. They need to make lots of bets, not just a few big ones, and they need to be willing to cut their losses.
The resource allocation problem is one Google has tried to address with its "20%" policy. All engineers are allowed to spend 20% of their time working on Google-related projects other than those assigned to them.
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In addition to resource allocation, there's the even bigger challenge of creating structures that motivate and inspire workers. There's plenty of evidence that most workers in today's complex organizations are simply not engaged in their work. Many are like Jim Halpert from "The Office," who in season one of the popular TV show declared: "This is just a job.…If this were my career, I'd have to throw myself in front of a train."
The new model will have to instill in workers the kind of drive and creativity and innovative spirit more commonly found among entrepreneurs. It will have to push power and decision-making down the organization as much as possible, rather than leave it concentrated at the top. Traditional bureaucratic structures will have to be replaced with something more like ad-hoc teams of peers, who come together to tackle individual projects, and then disband.
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The new model will have to go further. New mechanisms will have to be created for harnessing the "wisdom of crowds." Feedback loops will need to be built that allow products and services to constantly evolve in response to new information. Change, innovation, adaptability, all have to become orders of the day.
Can the 20th-century corporation evolve into this new, 21st-century organization? It won't be easy. The "innovator's dilemma" applies to management, as well as technology. But the time has come to find out. The old methods won't last much longer.
The MIX is an open innovation project aimed at reinventing management for the 21st century. Here on the MIX impassioned innovators from around the world are working together to tackle today’s — and tomorrow’s — toughest management challenges.Great stuff. I'm looking forward to actively monitoring and participating.
As it celebrates the 40th anniversary of the Apollo moon landings, NASA may be facing its greatest challenge in history. Envisaged is a return to the moon, the establishment of a base there and a push on to Mars, all within far more severe budget and safety constraints than the Apollo program. Failure could mean the end of the organization. As former astronaut Bob Crippen pointed out recently (“The next step in space exploration,” Outlook, June 28, Page B8), the growing time gap between retirement of the space shuttle and new manned launch vehicles threatens the economic and technical base of the U.S. aerospace industry. Meanwhile, China’s space program, flush with funds, continues to rise as a competitor. Imagine what it will achieve with the same focus and funding that was lavished on the 2008 Olympics.
A radical breakthrough is needed. There are well-documented problems with the existing bureaucracy, and heavy reliance on private contractor outsourcing has not been a panacea. To succeed, NASA will need an organization that can enable something like a “Moore’s Law of Space Travel” — yielding continuous reductions in the costs and risks of space travel similar to the rapid improvements we’ve seen in computer technology.
At the same time, the Obama administration wants to pioneer “Government 2.0” based on modern “Web 2.0” collaboration technologies to improve both efficiency and effectiveness. It wants government to be more agile, innovative and entrepreneurial, and has hired federal information and technology officers to make this happen. What the administration needs is an agency to create a prototype of these new approaches — a “Google of government” able to transplant the Silicon Valley entrepreneurial ecosystem inside its organization to yield a continuous stream of innovations. Who better than NASA to pioneer this approach?
NASA is in an absolutely unique position to prototype a 21st-century organization. Given current political and budget constraints, many may consider the mission near impossible, but NASA has a mandate for change. It is expected to be creative, innovative and future-oriented. The public expects most of government and the private sector to be safe and conservative, but people understand that NASA must take risks to achieve great things with limited resources.
The rise of the open-source software movement is another example of the new, innovative organization. These very loose, voluntary associations have created massively complex applications like the Linux operating system and the Apache Web server — both now dominant applications on the Internet. The open-source movement has a principle known as Linus’ Law: “Given enough eyeballs, all bugs are shallow.” With the extreme consequences of potential “bugs” in the Moon-Mars mission model, the open-source approach may have useful applications at NASA. It could also be an effective way to work with international, academic and private-sector partners, as well as to build public engagement.
To kick off NASA’s transformation, we are calling for the creation of a permanent blue-ribbon advisory commission drawing on leading private and academic experts, such as Massachusetts Institute of Technology’s Center for Coordination Science, the Management Innovation Lab (MLab), McKinsey & Co., and even Google itself. By integrating these cutting-edge organizational tools and concepts into a single prototype organization, NASA can create a successful model that can be emulated elsewhere in government and industry. This next-generation organization may be more valuable to society than all the accumulated spin-off technologies from a Moon-Mars mission, perhaps even besting the greatest government spin-off to date: the Internet.
Gattis, a Houstonian, blogs on Organization 2.0 as a social systems architect with OpenTeams Software. Bronk is the fellow for technology, society and public policy at Rice University’s James A. Baker III Institute for Public Policy.
If you look at how people think about getting things done in large complex organizations, they basically sort stuff into three broad categories. The first is about power: the organization is a hierarchy where information flows up and orders flow down, and you do what you’re told or you’re fired or demoted. … This tends to create silos: the hierarchy is very up and down and doesn’t work well for work that requires cooperation across different units or functions. It’s pretty slow as well; it takes a long time for information to get up the structure and for orders to find their way down.More on this approach in a followup post here.Another approach that really started to gain traction in the 1950s in Japan, and became more well-known in the 1980s, is management by process... the organization as a bundle of processes. Six Sigma…TQM [Total Quality Management]…all of these are variations on the same theme. This is hugely helpful—it allows you to squeeze out excess resources and continuously improve on what you do. Bit here we also have limitations, probably the biggest one being that standardization gets in the way of innovation... the higher an organization’s commitment to standardized processes, the lower the level of innovation.
Which brings us to our third approach: managing by commitment. Here, we look at an organization as a network of overlapping, continually evolving promises that people make to each other to get things done. The advantage and the power of this approach is that it lends itself quite well to situations that cannot be standardized: emergent strategies, innovation, one-offs or one-of-a-kind crises. It also works well when you coordinate among people who don’t report to you: suppliers, distributors, etc. And that kind of work is quite important. There was a study done a few years ago that said 40 percent of all employees in the United States added most of their value to their organizations through these non-routine activities. And about 70 percent of the growth of employees in the U.S. was among people who did this non-routine, non-hierarchical work, so it’s a big idea in the context of the economy as a whole.
...commitments within their teams. The most effective have five characteristics. First, they are public. They’re made publicly and their progress is tracked publicly. Next, they’re active. Parties understand what they are agreeing to and what each party is requesting; people don’t just nod, they really have to take responsibility for the commitment. Third, these are voluntary. The other party has the option to say something other than “yes”; they can refuse or make counteroffers. Fourth, commitments are explicit: it has to be clear who is committing. These aren’t committees making promises, they are individuals. And it works best when it is perfectly clear to whom the commitment is made. And fifth and finally, they’re motivating: the rationale is made clear…why it matters to the individuals and the organization is made clear.
The list proves that these principles are not just theoretical, but work in real organizations in the real world. Check it out."The purpose of the WorldBlu List is to acknowledge the most successful organizations in the world that are choosing to operate, not using the traditional, command and control model of business, but a democratic model based freedom and possibility.
In these challenging economic times, nothing could be more relevant than honoring organizations built on transparency, accountability, integrity, and fairness that give us all a reason to believe that business can truly uphold and model humanity's highest values."
Every day evidence mounts to support the need for companies to transform the way they operate internally. For the most part this is no longer even a matter for debate. Too much social evidence has already accumulated on this subject.The section on the external impact (in terms of marketing and branding) is right on too. In fact, we're trying to expand OpenTeams' efforts in this regard. We now have groups on
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...put into place the social media channels and systems that will allow the corporate community itself to communicate, reward, suggest, ask questions, offer solutions, raise issues, list complaints, and other engagements designed to produce a company united in vision and purpose.
• “Modern” management, much of which dates back to the late nineteenth century, has reached the limits of improvement.
• To lay out a road map for reinvention, a group of scholars and CEOs has created 25 ambitious challenges.
• Unless management innovators tackle those issues, companies will be unable to cope with tomorrow’s volatile world.
Management's Grand Challenges1: Ensure that the work of management serves a higher purpose. Management, both in theory and practice, must orient itself to the achievement of noble, socially significant goals.
2: Fully embed the ideas of community and citizenship in management systems. There’s a need for processes and practices that reflect the interdependence of all stakeholder groups.
3: Reconstruct management’s philosophical foundations. To build organizations that are more than merely efficient, we will need to draw lessons from such fields as biology, political science, and theology.
4: Eliminate the pathologies of formal hierarchy. There are advantages to natural hierarchies, where power flows up from the bottom and leaders emerge instead of being appointed.
5: Reduce fear and increase trust. Mistrust and fear are toxic to innovation and engagement and must be wrung out of tomorrow’s management systems.
6: Reinvent the means of control. To transcend the discipline-versus-freedom trade-off, control systems will have to encourage control from within rather than constraints from without.
7: Redefine the work of leadership. The notion of the leader as a heroic decision maker is untenable. Leaders must be recast as social-systems architects who enable innovation and collaboration.
8: Expand and exploit diversity. We must create a management system that values diversity, disagreement, and divergence as much as conformance, consensus, and cohesion.
9: Reinvent strategy making as an emergent process. In a turbulent world, strategy making must reflect the biological principles of variety, selection, and retention.
10: De-structure and disaggregate the organization. To become more adaptable and innovative, large entities must be disaggregated into smaller, more malleable units.
11: Dramatically reduce the pull of the past. Existing management systems often mindlessly reinforce the status quo. In the future, they must facilitate innovation and change.
12: Share the work of setting direction. To engender commitment, the responsibility for goal setting must be distributed through a process in which share of voice is a function of insight, not power.
13: Develop holistic performance measures. Existing performance metrics must be recast, since they give inadequate attention to the critical human capabilities that drive success in the creative economy.
14: Stretch executive time frames and perspectives. We need to discover alternatives to compensation and reward systems that encourage managers to sacrifice long-term goals for short-term gains.
15: Create a democracy of information. Companies need information systems that equip every employee to act in the interests of the entire enterprise.
16: Empower the renegades and disarm the reactionaries. Management systems must give more power to employees whose emotional equity is invested in the future rather than the past.
17: Expand the scope of employee autonomy. Management systems must be redesigned to facilitate grassroots initiatives and local experimentation.
18: Create internal markets for ideas, talent, and resources. Markets are better than hierarchies at allocating resources, and companies’ resource allocation processes need to reflect this fact.
19: Depoliticize decision making. Decision processes must be free of positional biases and should exploit the collective wisdom of the entire organization and beyond.
20: Better optimize trade-offs. Management systems tend to force either-or choices. What’s needed are hybrid systems that subtly optimize key trade-offs.
21: Further unleash human imagination. Much is known about what engenders human creativity. This knowledge must be better applied in the design of management systems.
22: Enable communities of passion. To maximize employee engagement, management systems must facilitate the formation of self-defining communities of passion.
23: Retool management for an open world. Value-creating networks often transcend the firm’s boundaries and can render traditional power-based management tools ineffective. New management tools are needed for building and shaping complex ecosystems.
24: Humanize the language and practice of business. Tomorrow’s management systems must give as much credence to such timeless human ideals as beauty, justice, and community as they do to the traditional goals of efficiency, advantage, and profit.
25: Retrain managerial minds. Managers’ deductive and analytical skills must be complemented by conceptual and systems-thinking skills.
While I agree with most of his points, I think the emphasis of the solution needs to be free markets more than democracy. Silicon Valley is successful because it allows hundreds of startups to bloom and the market sorts out the winners from the losers - not because they hold some sort of big vote every year to pick the "best" startups. Companies need to shift their thinking from "managers" controlling departments to "internal venture capitalists" putting resources behind the best ideas, and they should be judged on the results of those investments. Talent needs the freedom to move to the most promising and best funded projects. (more on Organization 2.0 here)...if free market democracy is such a good idea, why are most businesses run like military dictatorships?
Think about it! Most companies:
- Are controlled by a junta of corporate “officers.”
- Strive for tight top-down financial controls.
- Spy upon employee emails and activities.
- Obsess endlessly about the chain of command.
- Dictate rules and regulations from the top.
By contrast, I’ve seen very few companies that encourage internal competition beyond initial R&D efforts, and I’ve NEVER seen a company where the employees get to vote for the new President. Heck, even the stockholders don’t get to do that.
It seems to me that if CEOs really believed the Republican “talk”, they’d “walk the talk” and voluntarily set up their companies with internal free market economies and hold regular elections to determine who should manage each function.
However, since no CEO is willing to put his money where his mouth is, it’s logical to assume that most CEOs secretly believe, consciously or unconsciously, that organizations are better off when they’re run like military dictatorships.
With all due respect, I disagree. In my view, most corporations are successful in spite of top-down management, rather than because of it. In fact, I think that most businesses would benefit if the employees were running more of the show.
“Market-based economies outperform those that are centrally planned. …markets are better than hierarchies at getting the right resources behind the right opportunities at the right time. The average company, though, operates more like a socialist state than an unfettered market. A hierarchy may be an effective mechanism for applying resources, but it is an imperfect device for allocating resources.”We designed OpenTeams to act as that self-organizing ideas+talent+$ marketplace for projects.
–“The Quest for Resilience” by Gary Hamel and Liisa Välikangas, Harvard Business Review, Sept. 2003
Are we just trying to foster more "benevolent monarchies", or are we really moving on to create our equivalent of "democracy": a completely new form of organization that breaks from the old, dysfunctional, command-and-control, hierarchical model?
Looks like a great event on democratic organizations. If you'll be there, find me and let's chat about next generation organizations (or, my new label, Organization 2.0 - short overview pdf with 4 content charts here). Here's quick head shot so you know who to look for.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.
OpenTeams is an impressive service... OpenTeams’ high point is adding structure to a wiki. If you need to organize pages into folders, create outlines, track files, and work with a group of users, OpenTeams is definitely worth checking out.It's also a pretty good overview of how to actually use OpenTeams. Check it out.
Just 21% of the employees surveyed around the world are engaged in their work, meaning they're willing to go the extra mile to help their companies succeed. Fully 38% are partly to fully disengaged. The result is a gap - which Towers Perrin has dubbed the "engagement gap" - between the discretionary effort companies need and people actually want to invest and companies' effectiveness in channeling this effort to enhance performance.OpenTeams increases employee engagement by helping them self-organize into entrepreneurial teams around innovative ideas. Entrepreneurs are the personification of "engagement," and having more of that spirit within an organization can do wonders for motivating employees to tap their full potential.
The study found that companies with the highest levels of employee engagement achieve better financial results and are more successful in retaining their most valued employees than companies with lower levels of engagement.
"It's impossible to overstate the importance of an engaged workforce on a company's bottom line," said Julie Gebauer, managing director and leader of Towers Perrin's Workforce Effectiveness consulting practice. "The Global Workforce Study establishes a definitive link between levels of engagement and financial performance and, for the first time, begins to quantify that link. It demonstrates that, at a time when companies are looking for every source of competitive advantage, the workforce itself represents the largest reservoir of untapped potential."
The most striking data about the linkage between employee engagement and financial performance come from a study of 40 global companies which involved a regression analysis of company financial results against engagement data. It found that firms with the highest percentage of engaged employees collectively increased operating income 19% and earnings per share 28% year to year. Those companies with the lowest percentage of engaged employees showed year-to-year declines of 33% in operating income and 11% in earnings per share.
Caught this book review of "Strategic Intuition" in the Wall Street Journal, which is a great fit with what OpenTeams can do for your company:Of course, OpenTeams is a great environment for sparking and developing opportunistic innovation options by tapping the wisdom and insights of employees at all levels.Set big goals. Do whatever it takes to reach them. These muscular sentences form the core of commencement addresses, business-advice books, political movements and even the United Nations approach to global poverty. In "Strategic Intuition," a concise and entertaining treatise on human achievement, William Duggan says that such pronouncements are not only banal but wrong.
Mr. Duggan, who teaches strategy at Columbia Business School, argues that the commonplace formula has it backward. Instead of setting goals first, he says, it is better to watch for opportunities with large payoffs at low costs and only then set your goals. That is what innovators throughout history have done, as Mr. Duggan shows in a deliriously fast-paced tour of history.
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One of the insights of "Strategic Intuition" is that business makes progress by following the opportunistic innovation model, while governments and international-aid agencies aim repetitively at rigid social goals.
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If there are still businessmen who feel compelled to follow a fixed-goal plan -- missing out on the profits of opportunistic flexibility -- then at least there is the free market to punish them. Market feedback is surely one big reason that we have so many innovative entrepreneurs.
Research shows that staff source between 50%-75% of information relevant to their work from other people. It also shows that more than 80% of an organisation’s digitised information resides on individual hard drives and inside personal files. This means that individuals - rather than the organisation - control the bulk of essential knowledge within an agency.And a very pointed conclusion:
The need for better knowledge management in creative processes is evident. Campaigns are becoming more and more sophisticated to succeed in a fragmented media environment. If agencies don’t learn from mistakes and successes, they can never be better than their current workforce allows them to be. And since any key person leaves an organization at some point, they take with them a wide spectrum of extremely valuable knowledge, including industry and target group insights, confidential data and relationships. If the agency’s creative knowledge then only consists of static files on servers, a bunch of emails and the rented brains of the current employees, it isn’t much more than a name with a reputation, a building and a fancy coffee machine.
The authors discuss how traditional management models do not enable businesses to adequately respond to today’s competitive forces. In a new environment that places a premium on collaboration and talent, they view old organizational structures as impediments to innovation and creative strategyIt is well worth registering to read the whole thing, but here are a few excerpts which caught my eye and seem particularly relevant to OpenTeams and The Entrepreneurial Organization:
Hear, hear!The Internet is making it possible to amplify and aggregate human capabilities in ways never before possible. But most CEOs don’t yet understand how dramatically these developments will change the way companies organize, lead, allocate resources, plan, hire, and motivate—in other words, how new technology will change the work of managing. Throughout history, technological innovation has always preceded organizational and management innovation.
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I think the technological revolution that occurred in the past 15 years was basically equivalent to the industrial revolution—a fundamental discontinuity. And just as technologies have S curves, the technology of management also has an S curve.
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The availability of powerful new tools for coordinating human effort will profoundly change the work of management over the next few years.
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Highly talented people don’t need, and are unlikely to put up with, an overtly hierarchical management model. Increasingly, the work of management won’t be done by managers. It will be pushed out to the periphery. It will be embedded in systems. I think we’re on the verge of what I would call a postmanagerial society. The idea that you mobilize human labor through a hierarchy of overseers and bureaucrats and administrators is going to look extraordinarily antiquated a decade or two from now.
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The outlines of the 21st-century management model are already clear. Decision-making will be more peer based; the tools of creativity will be widely distributed in organizations. Ideas will compete on an equal footing. Strategies will be built from the bottom up. Power will be a function of competence rather than of position.
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I don’t think you shuffle your way from one S curve to the other. You have to jump. Frederick Taylor often talked about the need for a mental revolution when he was trying to move organizations from the craft-based model to the factory model. Today we need a new mental revolution.
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Assuming you’re well managed, the direction that most companies need to go in is improving how they enable their people to collaborate with one another at much lower cost by dramatically reducing unproductive search and coordination costs. And that means deploying such devices as talent marketplaces, knowledge marketplaces, and formal networks to make intangible assets flow throughout the company, as opposed to going up and down vertical chains of command.
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Ideas are being monetized in ways never before possible, and the world is a richer place. I’m not just talking about creating financial wealth; I’m talking about a much more stimulating work environment, with more interesting jobs for employees to create more valuable products and services for the world’s consumers. It is just an incredibly exciting time to be alive.
Reading book excerpts, as well as watching some of his videos here, here, and here, I was deeply inspired, and am really looking forward to the book. There are many similarities to the concepts we espouse in The Entrepreneurial Organization, as well as with the Enterprise 2.0 movement, which is discovering the management changes as a side effect of the new Web 2.0 technologies inside the enterprise.In "The Future of Management," a book due to be published this autumn, Mr. Hamel argues that Google's innovations go beyond the fine points of search-engine algorithms -- extending into big, enduring aspects of general management. The Mountain View, Calif., company is packed with intriguing, distinctive ways of running itself, he says. These include radical decentralization; small, self-managing teams; a just-try-it approach to rolling out new products before they are fully finished; and a willingness to let engineers spend sizable chunks of time on offbeat projects.
Put it together, Mr. Hamel contends, and Google is committed to building a company that can evolve as fast as the Web. That is crucial in today's turbulent business climate. Old ways stop working. Powerful new rivals pop up in the most unexpected places. Many well-established companies, even renowned ones, thrash helplessly as traditional strategies lose their potency.
, on the future of management. Here's part of the abstract summary:
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