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Posts Tagged ‘organizational structure

Organizational structure in our times

@benjaminellis, @audio and I had a spirited discussion yesterday on organizational structure.

@benjamellis was exploring mesh models ~ a full p2p model in a small team.

Classic functional organizations and Henri Fayol

@audio was advancing an argument that management theorists will recognize as being a cluster of principles articulated by Henri Fayol at the turn of the century.

Manages have authority (delegated from their managers).  They set a single, unified direction.   The principle of unity of command says they receive orders from one person only (so as to avoid confusion) and they are disciplined.  They decided what to do by reference to those commands.

These are the principles of classical functional organizations and they are a good place to start in organizing anything.  Even in a family wedding, its helpful to let “one person be in charge”.  We might be able to do a slightly better job than that person, on one or more aspects of the organization.  But we get a better result overall  if we pull together instead of in different directions.

Divisional organizations and market led companies

Functional organizational structures run out of steam when we move from simple product lines and simple markets to  complex technologies and complex markets.

The car industry illustrates this point.

Ford made any car provided it was black.  Standardised, cheap and one car for everyone.  The functional model works well.

GM (yes that one) revolutionized the market by making “a car for any purse.”  They began to differentiate the market and from there the divisional structure was born.  The market leads, so to speak, and the essence of the staff and managerial function is to integrate the responses to the different markets and find efficiencies.

Matrix organizations and multiplex leadership

Toyota blew a giant hole in this model.  They began to make customized and inexpensive cars.  They have short production runs. They change lines and retool quickly.  How do they do it?

In short, they cede control.  Workers have the power to stop the assembly line.  They do.  Workers have the power to change the pace of the line.  They do.  It is called kan ban.  Workers are capable of controlling quality and doing the work studies to improve productivity.  They do.  It is standard every day work based on statistics only Honors students learn in the West.

Suppliers have access to Toyota’s production statistics and have Toyota’s loyalty in return.  It feels it should be the opposite doesn’t it?  Remember loyalty breeds loyalty.  Let the big guy be loyal first.

The net effect are better cars, less waste, lower prices, more competitive company.

Local modularization, globalization and the internet

Life has moved on from Toyota, who we know are struggling as well in the downturn.  Our model for organizational structure now is local modularization.  It sounds like lego and it is.

Think Boeing.  They used to make planes.  Think of the specs for one plane.  A giant document.

Well the specs for the 787 (that is behind schedule) is all of 20 pages long. 20 pages to design on giant plane.

How did they manage this feat of simplification?   Well,. it seems they concentrate only on the interlinkages between modules.  They don’t have to design the parts.  They only have to contract to buy parts that will perform a certain function in relation to other parts.

These systems are hard to grasp when they are new.  Take another example from a British industry.  Rolls Royce makes engines.  It takes 10’s of 1000’s of manhours to design an engine and no one, no one, has an overall plan to make the engine happen.  Now if only I could find the link to the Cambridge researcher who documents this magical process.  I know where to find it though.  I’ll get it.

Commander’s Intent or Adding Boundaries to a System

I’ll leave you with an excerpt from a commentary on Obama’s statement on Afghanistan.  An unhappy soldier is asking for the Commander’s Intentthe mission. The one line sentence that explains the group’s goal.  This is very similar to Fayol’s unitary command.

My contention is this. Every system requires individuals and jobs where the purpose is to state the purpose – clearly and concisely.  There are many psychological, organizational and logistical reasons why this is important.

First, lets just look at a good example.   And then lets separate two things.  Distinguish arrogating the right to decide the content from articulating the group intent clearly.

‘3rd Platoon will ensure the delivery of 18 loads of class XII equipment to FOB Oscar, and safely return to base with all personnel and equipment accounted for.’

I could comment more. For now, I’ll repeat my contention.  It is a very important competency to be able to state clearly and concisely what our group will contribute and that competency will become more important in multiplexed leadership.

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Cheese on a market in Basel, Switzerland
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I’m not moving until I can see the cheese

And Google is not coming without lots of keywords. This post is about MOTIVATION and all the misunderstandings and controversies that seem to swirl about us endlessly.

1  Motivation is distance to your goal

The mouse runs faster when it sees the cheese!

Motivation is not constant.  We aren’t motivated by cheese.  We are motivated by distance to the cheese.

Motivation gets stronger when we can see what we want and our goal comes tantalizing closer as we move toward it.

2  Motivation blinds us

When the mouse sees the cheese, it moves towards it . . . and the mouse trap.

That’s why business people and politicians like greedy people! So easy to dazzle.  So easy to trap.

3  Motivation is never so strong that we ignore a better cheese

So we put the cheese where the mouse can see it, and the mouse takes off . . .  Will it keep going, no matter what?

Yes, . . . unless we put a better cheese next to a dull cheese, or a duller cheese a little closer.  Our mouse is as fickle as the English weather.   It doesn’t matter whose day it spoils, the mouse will go where it is easier or better.

We make rapid calculations about what we will gain and change direction in a flash!

4  Motivation makes us stupid

Yet, when someone moves the cheese, we are temporarily confused. The trouble is that seeing the cheese focused our attention. And we forgot everything else. We forgot that other cheese exists. We forgot there are other routes to the cheese.

Take away the cheese suddenly, and we get cross and disoriented. Though there are plenty of alternatives, for a moment we can’t see them or remember them.

5  Motivation needs to be simple

And if we put two equally attractive cheeses in opposite directions, one to the left and one to the right, we get a confused mouse.

Come on cats, now is your chance.

Worse, if two or more mice are discussing which way to go, we may be there all week.

We need to toss two coins – the first to see if we go together or in different directions, and the second to see which way we go.  Most times we just argue. We don’t think of laying out the problem so tidily.  Two cheeses – we can have one or the other.  Shall we go together or not?  If not, who goes first and in which direction? If we are going together, in which direction?

Action is hard . . .

We can’t move, we won’t get moving, until our choices are simple and the end is in sight. We are easily distracted by alternatives and paralyzed by thought.

.  .  . and action it is also dangerous

We are easily entrapped by our greed – or to be kind to ourselves – easily engaged by the plain fun of scampering towards our cheese and wolfing it down.

Someone has to manage the cheese

We do have to work hard to keep the cheese-system simple and to fend off distractions.  While we are busy managing the cheese, we make ourselves vulnerable because we are just as blinkered in that goal as the cheese-chasers are by the cheese-chase.

So we need people to manage the people who manage the cheese

This is beginning to sound like a nursery-rhyme.

We do need lookouts to watch out for when we are getting blinkered.

We also need our lookouts to challenge us and to ask why we need to chase this cheese at all?  Well, the answer is as always, for the fun of it. We’ll chase something, just for the fun of it.  So, the question is which cheese will we chase?  And who will be sufficiently above the action to referee the debate and not get blinded by the thrill of the chase?

We do need some people to manage the people who manage the people who chase the cheese.  That will be their job, their only job.  Because if they get involved in the action, they will be blinkered too.  We will give them their share of the cheese if they ask us, over and over again, whether we should be chasing the cheese at all.

We must have these people.  Or the cats will have us

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The HUMAN Resource album cover
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10 Sun Tzu rules for the networked world

I am currently writing about 10 Sun Tzu rules for the networked world and I stopped to consider the specific issues faced by startups – defining their fans & customers.

For HR too

HR are another group who face special problems. HR are last to the party and we often feel that there is little we can do about the structure and climate we inherit.

Well there is.

HR in the Recession Stressed World of 2009

First, promote positive psychology.

Full press. Positive psychology is the biggest favor we can do for our organization.

And to develop an infectiously positive outlook, we personally will take more vacations, play more golf, laugh more, and have fun! It begins with us.

Second, read the 10 Sun Tzu rules for the networked world

Originally written by Umair Haque to defend networks under attack, the rules provide a framework for an organizational structure that will work in today’s fast moving world.

Our structures will be a little different to the ones we have now.

The job of corporate HR in a networked world

Why do we need an organization anyway?

In the ‘corporate’ office, our task is to develop the collective properties of an organization that the people out in the field need to compete effectively.

We, for example, work on discounts that make it easier to get good rents in the shopping malls. But we don’t sign exclusive deals that block the initiative of the people in the front line.

We conceptualize the meaning of the collective.  But ot in terms of return on our funder’s capital.  Interest on capital is incidental to our business. So are we, actually.

We conceptualize why the field units are better off working under one umbrella and we work out which aspects of the organization must be coordinated and which do not have to be.

That’s what we went to university to learn and that’s how we contribute significant, inimicable value that exceeds the cost of our salaries.

Just how lightweight can the organization be?

And then we execute those aspects of coordination in as light weight form as we can.

If capital is needed, so be it. But we don’t become prats and hand-over the business lock-stock-and-barrel.  We let the funders have their % return.  That is all.

Take the initiative to lead us into the networked world

And we step-up! This is the age of sweat equity. We are in the age of organizing ourselves around our talent and around our relationships with customers.

This is our task as HR managers of the 21st century

1.  Conceptualize the organizational structures that add value to the business.

2.  Organize the corporate office to add that value.

3.  Help talent make the transition from solo operator to team player and from talented employee to customer-oriented professional.

That’s what we do now. We are the entrepreneurs of the 21st century!

And if you are not in corporate HR?

Start learning.

You can activate positive psychology in the workplace without anyone’s permission.

Indeed, if they are inclined to say no, that is all the more reason why you must activate positive psychology, for the sake of your own mental health.

If you don’t understand that argument, contact me, and I will explain.

And activate social media for the functions you do control.

All works parties, sports teams and fund raising can be managed with social media.

Begin, so your skills are up-to-speed when you need them.

To recap: HR in the Networked World

1.  Positive psychology

2.  Social media


1.  We want to find the organizational structure that brings value to business.

2.  We want to organize the corporate office to execute the structure to add that value.

3.  We want to help each and every person in the organization go from being solo-performer with talent to a customer-oriented professional who is supported by a team and supports a team in turn.

I have my mission. I hope I have helped you find yours.

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Day One at Xoozya (cont’d)

While I waited for the kind HR body to take me off to lunch, I doodled away on my nice clean notepad thinking how much organizations have changed since I first studied management.

Classical organizational structure

Eight soldiers march across the country side careful to walk in a straight line so they don’t shoot each other.  They are also spread out so that no more than one soldier is hit in a burst of machine gun fire from the opposition.

And they are limited to 8, because only four either side of their leader can hear his voice and see his hand commands.

The army makes a choice to use ‘voice and hand’ to communicate and that, amongst other factors, constrains their organizational structure.

Social media is a choice and available now

Now we have social media tools available to us to communicate, our choices have broadened.  We can communicate with people out of sight and sound.  We can communicate with more people too.

If I knew more military history, I would know more about how communication has changed warfare through the ages.  I am sure the changes were huge.  And they will be huge in business with the arrival of social media.

Well lunch calls so I will think about this more later.  I wonder what face-to-face communication is like in Xoozya.

Communication channels constrain structure

How does you organization communicate and coordinate?

Have you adopted social media?

How do the physical choices you’ve made determine your structure?

Does your structure allow you to move faster than your opposition?  What structures do they use?

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Thank you for reading and do come back to here what happened at lunch.

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