Talk: Can the Latest Organizational Innovations Really Help Us?
Dear
Ken,
As
head of HR, I’ve been searching for something to help our organization run more
smoothly. Reading about ideas such as holacracy and the agile approach makes me
wonder whether we are missing the boat on a critical organizational innovation.
But are these just old dogs dressed up in millennial clothing? Can these new
approaches really help us?
—Skeptical Baby Boomer
Dear
Skeptical,
Organizational innovations are never
everything they are cracked up to be, but they usually have a nugget or two
that can help. The trick is to separate the wheat from the chaff, and that can
be a challenge when a new approach is surrounded by hype. Start with the
fundamentals of what makes an organization run smoothly, and use that to zero
in on where or why your organization is not working as well as it could. This in
turn will help you spot the aspects of an organizational innovation that could
be most helpful to your particular situation, which you can then cherry-pick
and benefit from without having to turn your organization upside down.
Theories on what makes an organization work
effectively abound, for example, fostering engagement and empowerment,
sharpening accountability and authority, enhancing autonomy and alignment,
cultivating shared purpose and goals, and increasing transparency and openness.
But two determinants of organizational effectiveness stand above the rest:
clarity and collaboration. These are the corporate ligaments that make teams
more than the sum of their members and organizations more than their teams.
Clarity means that every individual (frontline employees,
board directors, and everyone in between) and every team (product, customer,
functional, and regional units; executive and operating committees; boards and
their subcommittees; sales groups; task forces; and the list goes on) knows
what they are supposed to be doing and why. Collaboration means
that individuals and teams are engaging with those who can improve their work
and with those whose work they can help improve.
Systemic clarity and collaboration enable you
to have sharp lines of accountability and to coordinate across internal
boundaries without excessive, overly formal processes. The combination of
clarity and collaboration helps everyone see who is responsible for doing what
and where the company’s strengths and weaknesses lie. Where there’s good
clarity and collaboration, people feel highly engaged, empowered, accountable,
and autonomous because they don’t have to wait to be told what to do. And they
aren’t burdened by processes designed to fix the lack of coordination that
occurs when clarity and collaboration go AWOL.
Moreover,
research (for example, in Harvard professor Heidi K. Gardner’s recent
book Smart
Collaboration) has shown that good collaboration increases
employee productivity, forges loyalty, reduces attrition, and strengthens
recruiting. All these benefits of clarity and collaboration make your
organization more effective at adapting to market changes, while also achieving
the performance that gives you the license and wherewithal to evolve.
On the flip side, lack of clarity and
collaboration makes you and your team hesitant to decide and act; breeds
“make-work” for yourself, your team, and other teams; produces actions that
create headaches for others; and leads to both over- and under-delegation. It
also promotes groupthink; stunts creativity; keeps hidden where the company’s
expertise, skills, and capabilities reside; and suboptimizes customer solutions
and service.
Bad
meetings are both the perpetrator and the victim of lack of clarity and
collaboration; so are bloated bureaucracies and coordination snafus.
Constant, unnecessary firefighting is a symptom of poor clarity and collaboration; so
are turf protecting, tribal warfare, and matrices that don’t work. Without
clarity and collaboration, companies gravitate to top-down command and
soul-destroying control.
Take holacracy, a system of organizing around “circles” —
self-organizing teams of six to eight individuals assigned a domain and
accountability by their parent circle. Zappos, which announced
in 2013 that it would adopt holacracy, has
since set up 500
such circles, and each one has an articulated purpose
statement that is posted online for everyone in the company to see and even
comment on. This enhances clarity and fosters collaboration because every
individual in a circle (team) knows why it exists and what it’s supposed to be
doing, and every circle can see how its purpose could be supported by other
circles, and vice versa. But you don’t have to adopt holacracy wholesale to
introduce the standard of every team in your organization having a clearly
written statement of its purpose.
Spotify is attempting another kind of organizational
innovation, which is to apply the principles and processes of agile software
development to an entire organization at scale. But you don’t have to do that
in order to benefit from a number of ideas Spotify has implemented. For
example, many people at Spotify are “player-coaches,” meaning they lead one
“squad” (Spotify’s term for scrum teams) while playing on another. This
improves collaboration because as a leader you see firsthand how your squad
benefits from collaboration and who’s good at it, so that as a player you are a
better, more willing collaborator yourself.
Another example from Spotify is “fail walls”
that make every squad’s successes and failures as visible as possible. This
promotes both clarity and collaboration, because by knowing what has and hasn’t
worked, people understand better what they should be doing to help their team
and other teams succeed. A third idea is Spotify’s mantra of “be autonomous,
but don’t suboptimize” — which you can’t do very well unless you are clear on
what you are supposed to be doing and unless you collaborate.
There
will always be a constant stream of serious attempts at organizational
innovation. Today’s holacracy and agile management were yesterday’s business
process reengineering and centers of excellence. And there’s already talk of
tomorrow, in the form of flash
organizations and the use of blockchain technology to innovate how
organizations form and work. You should learn as much as you can about each
approach, because you’ll likely find an idea or two that will help your
organization work better — without the need for a major transformation and all
the risk that entails.
Ken Favaro
Ken
Favaro is a contributing editor of strategy+business
https://www.strategy-business.com/blog/Strategy-Talk-Can-the-Latest-Organizational-Innovations-Really-Help-Us?gko=e0f96&utm_source=itw&utm_medium=20180104&utm_campaign=resp
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