Simplifying Future-Work Part 1

[Note: Schumpeter the blog is only named after Joseph Schumpeter and is a shared identity of several contributors.]

That is an oversimplification, but the reality of networks has been much talked about but we are only beginning to understand the dynamics per organizational structure and the tools we need for this future. Richard Martin, Head of Knowledge Management at UK railway industry firm RSSB, agrees and puts it as “Hierarchy gives way to wirearchy, and networks become the new companies.”

Let’s begin with the views of complexity at the Forum. The Economist article focused on how organizations can simplify in two ways:

(a) understand how to apply the new form of order that we misread as complexity;

(b) focus on simple, replicable ideas the eschew too many levels of direct hierarchical order.

To give a perspective, let’s look at how companies that start out with an ethos of simplicity evolves into hierarchical organizations with levels of management complexity. David A. Garvin wrote in Harvard Business Review, How Google Sold its Engineers on Management, and shares how Google evolved from a few hundred to the 37,000-person organization it was now.

What began as a rather flat startup at Google with only one level of management evolved into structure as the leaders found themselves responding to the many minutiae of work (e.g., expenses, corner cases of technology, product direction, etc.) The company still maintains a low overhead of management. The article indicates about 6100 people in four levels of management, about 16% of the company, and that it isn’t unusual to find one manager to 30 direct reports. The goal: reduce micromanagement of employees (a decidedly un-motivating aspect of work).

In addition, Garvin indicates:

And as the company grew, the founders soon realized that managers contributed in many other, important ways—for instance, by communicating strategy, helping employees prioritize projects, facilitating collaboration, supporting career development, and ensuring that processes and systems aligned with company goals.

It begs the question: is this path of organizational maturity inevitable, even when the organization starts out as a heavily meritocracy-centric organization? Will it still always give way to a hierarchical organization? Is this polarization the natural consequence of business at scale?

Two approaches to handling complexity

Getting back to the discussions at the Forum, author and thought leader Don Tapscott, posits that there are entirely new orders that only look complex now because they don’t fit this model. They are, in origin, on a different path with different characteristics. However, they can also scale to substantial size and impact. Take for example platforms like CrisisCommons that can help mobilize thousands of people to aid during natural disasters with little top-down direction. Other prominent examples of Mr. Tapscott’s idea of Multi-Stakeholder Networks (MSNs) helps the world create practical global solutions like standards for the Internet (the Internet Society and the IETF), or the Web (the World Wide Web Consortium).

MSNs are decidedly different in nature from purely commercial product-oriented organizations. They work in both to support public need but also allow for commercial interests to play. More importantly, it is how work gets done within these groups that are of interest. They do not follow the command-and-control approach typical of hierarchical systems, but rather the slower path of group consensus development.

Productivity still matters as for traditional organizations, but the input resources and the decision-making processes differ. Because there can be many stakeholders involved representing different interests, there is a magnitude of significance in how participants carry their commitments to completion. This is commitment between the participants themselves rather than centralized authority like a management chain. This both demands and drives trust as individuals consider their history of interactions with their colleagues and teams.

There is a stark difference here between the traditional single-stakeholder and the MSN approach. Both involve collaboration. In fact, many of the same methods of collaboration, whether open shared wikis, or highly directed & managed teams, can fit into either a single or multi-stakeholder system. What differs is the commitment necessary towards the shared goal can be much more difficult to understand.

In the second approach to reduce complexity per the Schumpeter article is to establish simple replicable models. At the GPD Forum, Prof Lynda Gratton (London Business School) and a leading researcher on the future of work, interviewed leaders of two key case studies: Rick Goings, CEO of Tupperware Brands with its 3 million freelancers, and Natarajan Chandrasekaran, CEO and Managing Director of 300,000-person Tata Consultancy Services. Even branding and franchise organizations such as Coca-Cola and McDonalds, fall into this purview per the Schumpeter blog. These organizations range from the self-organizing to the same hierarchical situation of Google; and from networked partnerships to a single massive in-organization network.

This second view of managing complexity takes a carefully designed yet simple set of guiding principles, values, and rules.  It then creates the situations to allow individual actors to build their own networks and areas of responsibility. It tends to work in businesses where there is an uncomplicated or uniform end-product to offer (plastic containers, managed IT services, soft drinks, or burgers); the Chinese menu approach, if you will.

In Snowden’s Cynefin framework, they move the organizational model from the complex to the complicated or even the simple category, by limiting the considerations into simpler factors and eliminating decision overhead. In a way, it deconstructs the larger organization into a network—sometimes quite vast, per the 3 million participants of Tupperware—of smaller more easily deployable units.