How to redesign your organisation for people-centricity

This is the third of my articles on Making HR truly strategic on HR Zone: 

Employee experience and journey mapping are great, but can feel a bit like putting shiny engagement lipstick on a clunky organisational pig!

This was my first article in the series: People centricity vs business support

And the second: Why the human-focused workplace leads to competitive success

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Overall Reflections on Creating Inspirational Business from WOBI

I really enjoyed WOBI (World of Business Ideas) last week, and it's definitely had me thinking. I don't think I've changed my mind on anything, but I've connected a few things together a bit differently.

So what were my main insights? Firstly, that there wasn't a lot of focus around the conference's non-social media tagline, Exponential. I might go for something like Inspirational. I'm not saying it was, though I wouldn't say it wasn't, but I'm not one of those who look for inspiration from speakers, I look for insight. But there was a lot of focus on running business in a way that will inspire employees (Hamel, David, Sinek and SMR Covey) customers (Lindstrom) and society (Porter).

So how do you create an inspirational business and / or organisation? Well, I think in a number of ways Hamel got very close. I do think becoming more human is the key. I just don't agree that eliminating bureaucracy, especially managers and management layers, is the main way to achieve this. Managers do add costs and layers do make businesses inefficient, but they're not the biggest thing to point at. Using Porter's ideas they're part of operational effectiveness or execution, they don't impact strategy. Using my terminology, they're value for money, not adding or creating value.

Layers are becoming more important with an increasing focus on being more human, and on employee experience, etc. And I accept that if you were to design an organisation just to develop a compelling experience, you probably wouldn't invent hierarchy to do it. But hierarchy doesn't really get in the way of experience that much. I don't agree with Hamel that being 8 layers down in an organisation feels like being buried under the other 7. I accept that organisational life is often awful and we do need to be more ambitious the way we sort that. But do we really need to start with layers to do that. In my view, not so much. For one thing, hierarchy provides some really useful benefits that it's still difficult to provide as easily through other means. Eg I thought Porter made a very good case for a hierarchical aspect to strategy in our interview.

I'm absolutely not saying that we don't need to redesign our organisations. As Hamel says, our business models have changed but our organisation models haven't done so to anything like the same extent. They now need to do so. That's why I think the opportunity of applying Porter's thinking about business strategy to our organisations is so important.

I loved the way he described this in our interview: "Competition is about what you actually do in the marketplace to achieve value for the customer. Then you back up and that’s where the resources are. There is a cause and effect. We can keep on going further and further back up, keep going upstream to look at cause and causes. Supporting every piece of the value chain there’s another value chain like activity which are the steps you take to get there. And as get more about insight about management we have more insight into what some of those things are. What’s helpful is that we’re getting up the causal chain. Business strategy is about what you do in the marketplace but how you get to doing that is a fascinating question. That’s why I’m interested in the dynamic view of strategy."

We need to start thinking about creating unique and differentiated organisational strategies by developing best fit activities in the organisation value chain. These activities then need to provide the right outcomes which will add and create value for the business. Porter seemed to agree with this perspective too, saying: "if they’re good resources they can be an advantage, part of doing it better."

 

But as well as what our organisation needs to provide, we also need to think about how it is going to do this. So Hamel is absolutely right in suggesting that we need to set clear organisation principles. These provide an additional driver for our organisation design.

And because employees are now more important we need to include their expectations as the third main driver, so that we don't just end up trying to make horrible organisations less awful for people through things like journey mapping (putting experience lipstick on a nasty pig). Or, and this may be the one change I have come away with, we introduce more of a shared value perspective by focusing on societal expectations here.

If these three objectives indicate that we need to reduce hierarchy then so be it, but in my experience that's not the main result most of the time. What I think is a more common result is that we align our organisational groups with the business that needs to get done, including through the use of horizontal teams, networks and, as Hamel mentioned, communities. Doing this ensures that people can get their work done easily and provides a much better basis for their engagement than worrying about bureaucracy.

I think the above steps need to take place before we do anything else, but they're not the most important thing. Hierarchical thinking is a bigger problem than hierarchical structure. And sorting this is about developing David's emotional agility, Sinek's infinite game or Covey's trust and inspiration. Which could of course be principles for  the organisation design. Or simply deeply embedded leadership behaviours getting people to act differently and to provide time and attention for themselves and each other. My worry is that this is difficult to achieve unless you've got the right organisation in place first, so again, I think redesigning the organisation is the most urgent thing. But then you can move on to the most important (I admit I was inspired by SMR Covey's father) and ensure people are acting in a human way in the newly human organisation. (In The Social Organization I call this these the organisational society and architecture).

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More from Gary Hamel and Humanocracy @WOBI #WBFLON (part 2)

This is the second part (part 1 is here) of a review on Gary Hamel's session discussing Humanocracy at WOBI's first conference in London. I've been trying to be really appreciative, as I do think Hamel makes a lot of sense (the fact that I've felt the need to do two posts on one session is evidence of this), and also critical, where I do have other views.

But one of Hamel's points which I really, really agree with is about the importance of principles (for any problem, you need principles, processes and practices to provide performance). Hamel suggests that the principles of bureaucratic organisations get in the way of change and innovation, and in people bringing their passion and creativity to work. We therefore need new principles for post-bureaucratic, humanocratic organisations. I completely agree with this - principles are part of the secret sauce of organisational transformation and are generally much more useful in gaming traction that organisational value.

(However, Hamel talked a little about Ray Dalio from Bridgewater who is probably most famous, in OD circles at least, for his list of what is it, a hundred and something principles. Don’t do that - 10 is quite sufficient. But I did like Bridgewater’s use of ‘dots and polls’ where people give their colleagues a rating against 7 or 8 criteria during the normal course of work. The average person gets well over 2000 ratings during a year. This helps separate competence and entitlement, and supports the development of different hierarchies for different things.)

But whilst I support the idea of meritocracy, I don’t see the problem with using hierarchy to get it. Hamel suggested bureaucratic organisations, the bigger the title the bigger the decision but this doesn’t need to be the case.

Hamel talked about one organisation which sent out a competency framework to 70,000 employees, therefore telling them that 95% of the organisation doesn’t need to worry about new business models or unmet customer needs. But that’s actually much more about the challenge in fitting something meaningful into one slide. All employees need to do strategic thinking but the organisation doesn’t expect the same level of competence it does from executives.

Hamel also suggests that by the time an organisational issue has captured attention at the top it’s often already too late to take advantage of it. But there’s nothing in hierarchy which says all decisions need to be taken by the CEO.  Plus these days there are ways of getting that information shared around quickly. And hierarchy doesn’t stop everyone acting as leaders, or the top team acting as a team.

And there’s an article by P&G’s former CEO AG Lafley in HBR suggesting that there are some opportunities only CEOs can see, some calls only they can make. Which Hamel calls horseshit. So who are you going to ask about whether you should acquire another company or another big strategic issue  in the business then? For me, bigger titles will generally take broader decisions because they have a higher level (strategically, not just hierarchically) perspective, and this will often correlate with bigger decisions too. But that’s not the intent of logic of the allocation. Anyway, I’m going to ask Michael Porter about this today and will report his view back to you to.

I do, however, particularly like the inclusion of community in Hamel’s post bureaucratic principles. The UK is undergoing a loneliness epidemic (I spoke about this on a webinar last week). You would imagine that organisations are a place that people can find connection. But it turns out not. Only 2 out of 10 employees have a close friend at work.

Today’s problems cross functional boundaries and we need to build up social capital - employees who care about each other, trust each other, are emotionally invested in each other and are therefore more prepared to go the extra mile. Without this, businesses can’t solve these new problems.

I also liked the suggestion that moving to humanocracy needs to be human and social too, about building a coalition of the willing by starting with the people around you. People who have power are often reluctant to give it up. Don’t expect change to come from the CEO or HR (ahem!).

There was a lot more but I’ve summarised more than enough. My final and very small point would be that whilst I’m a great fan of Hamel’s work, particularly The Future of Management which I still think is brilliant, and I’m eagerly looking forward to reading Humanocracy as soon as I get a review copy, I do wish he wouldn’t talk about humanocracy in such a hierarchical way (non stop, no questions, no interaction). Both Susan Black and especially Simon Sinek actually demonstrated humanocracy in practice much, much better.

Read more on the need for principles, community, and social capital and network based change in The Social Organization. I do write about reducing hierarchy too but for me, modern organisation design isn’t as simple as moving from hierarchies to networks. Instead, we need to supplement (not replace) traditional functional design (which I don’t think has to be inhuman or bureaucratic) with horizontal teams, communities and networks, but tend to be less hierarchical. Delayering or moving to self management is often a result not the objective of good design.

And often, it’s no organisation design which is required. We just need more of that emotional, social and prosocial perspective Hamel, David and Sinek all talked about - Sinek probably the most clearly. I’ll be posting on that next...

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Gary Hamel on Humanocracy vs Bureausclerosis (part 1)

I’m at WOBI in London and have been listening to Gary Hamel providing an early overview of his book Humanocracy, out early next year.

Hamel has assembled a range of evidence supporting his view that we need to move beyond today's bureaucratic organisations and create new humanocratic ones. I think some of this data is a bit ropey. Gallup's Q12 results don't show that a third of global employees are saboteurs, just that they haven't responded positively to 12 (admittedly important) questions. But from my experience, if we make it easier for them to do a good job than a bad one, most of these people will still try to do good work. And actually, they're not the issue anyway, it's their organisations, which I’m sure Hamel would agree.

Eg, the fact that less than 20% of people are consulted about their goals (European Workforce Study) is a bit stupid. And 70% of jobs having no, or very limited opportunities for originality (US Bureau of Labour Statistics) is quite appalling. 

I'm less concerned about growth in the bureaucratic class (a 108% increase in managers and operations since 1983 compared to 44% in other occupations, and now at 14% of, and with operations, nearly a third of the total workforce). I think the number of pure managers or managers who think their job is about controlling their underlings has actually declined in this period. And most managers are doing valuable work for their organisations, in fact one of the reasons many people are so disengaged is that they're prioritising doing this work, rather than managing their people. (However, I don't agree with the 14% getting 30% of the compensation.)

Hamel describes a range of issues about this, but all of these are open to challenge. Eg management layers will get added, and this imposes a cost, but other ways of coordinating people will have different costs too. I love the way Morning Star has its people agree commitments with each other, but we shouldn't pretend this comes without a time penalty or some frustration for employees.

Bureaucracy -

Humanocracy -

However, we've also been hearing from Susan David about the importance of emotional agility and I think it's actually Hamel's belief and passion for this topic, not his evidence, which is most convincing. Though again, I'd challenge some of the emotional imagery - eg having people buried under 7 or 8 layers of management sounds terrible, but hierarchy doesn't necessarily need to bury people, and I don't believe most people at the bottom of hierarchical organisations feel like they are buried (any more than most people in a network organisation feel like they're lost). For those that do, a true focus on servant leadership would get rid of this.

This point on emotion has relevance for modern organisations too. Yes, we do need to look at our organisation and job designs and management processes. But we also need to spend time on connection. As David noted, innovation is a myth unless we connect with out own emotional agility, and the emotional agility of those we connect with. But we won't do this when we're stressed and thinking transactionally rather than relationally (cognitively vs pro-socially).

Hamel summed it up like this: people don’t bring their private lives to work but if they are struggling there or at work and can’t talk about it - you can’t expect them to be engaged at work if they’re not engaged in each other. Later on, Simon Sinek also made a similar point suggesting that leadership can be lonely and that we need to invest in deep, meaningful relationships and support networks in order be effective.

Making that shift doesn't actually need most of the changes Hamel has suggested - just the encouragement for people to create a bit more time and space for themselves and each other. Eg if over two thirds of people in larger businesses report new ideas are met with skepticism or hostility then we've got a lot of businesses, leaders and managers who need to take a good, long look at themselves and change what they're doing with each other. But they don't necessarily need to change anything about the organisation to do that. Similarly if people feel that they can only get to the top by managing up and stiff arming their colleagues.

It's why in The Social Organization I add a Connections element to my organisation model, and explain why organisation design needs to be supported by organisation development interventions too.

I do agree with Hamel that organisations need to change, and often use the same logic he does to explain this - that business models have changed very radically but our organisation models, ie the ways we allocate resources, change and compensate people, haven't. As Hamel notes, Mary Parker Follett's desire to free the energies of the human spirit still feels like a very distant dream. Most people have very inspiring stories but organisations too often feel like emotional dead zones.

I do believe organisations need radical innovation, and use a lot of Hamel's examples myself. As Sinek explained, there's only a handful of organisations doing things significantly differently and better than all the others, so everyone uses these cases. 

But I'm just not convinced, still, that fighting bureaucracy (mainly management and management layers) is the biggest need to deal with the problem. I see lots of dysfunction, but not that much bureaucracy, and very few bloated, highly inefficient organisations.

More in part 2...

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Digital HR Summit: Squads, Tribes and Chapters

We've had a few sessions today on new digital organisation designs. Several of these have been based on Spotify's model of squads, tribes and chapters.

To an extent, this is a good thing. As Gerard Penning from Shell (above) challenged us this morning, traditional organisations designs don't support design thinking, lean or agile, ie today's digital world, that well.

Some things to note however.

• Traditional designs (primarily functions) don't support digital approaches but they don't stop it - you just need to put something else in place to help this, eg adding a project dimension in a matrix, changing / splitting the role of line managers, etc. Often the traditional design will still be the best fit.

• If it's not the right design you should try to develop your own, not copy someone else's. It doesn't work. Those organisations which copied Dave Ulrich's three legged stool for HR without thinking about it know this point well. You may just want to implement agile / scrum as you've seen elsewhere but don't scale it up that way. Don't think Tribes, think process areas.

• Spotify's model included Guilds (communities) too. This is really important! Squads / teams without communities wear people out and reduce not increase the organisation's humanity (eg Amazon), which is another really important requirement today.

More information on this in The Social Organization.

Please note I may be being unfair. Philips in particular sound like they're doing some great work, including job sculpting. And they did speak about having a network structure and their groups not knowing what they will be doing upfront (which may have been the guilds).

I also liked Bayer's suggestions on integrating organisational and other digital changes.

I was slightly less positive about Vodafone which suggested that cross-tribe co-ordinators aren't needed any more. That's certainly lean, and I know Spotify have a similar model, relying on cadence rather than structure to co-ordinate their work, but this may not be very innovative.


My other posts from the summit:

http://strategic-hcm.blogspot.com/2019/04/digital-hr-summit-tech-fallacy.html  http://strategic-hcm.blogspot.com/2019/04/digital-hr-summit-leadership-competencies.html 
http://strategic-hcm.blogspot.com/2019/04/digital-hr-summit-ai-bots.html 


And my pre-summit podcast interview: http://blog.hr-congress.com/shaping-hrs-digital-future-podcast-with-jon-ingham/ 

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#GPDF18 Networks, ecosystems and platforms

I've been attending the live stream from the Peter Drucker Forum in Vienna for the fourth year in a row. This conference is always really good value, and I usually find it has a few particularly great sessions, often focused on one or two key issues, not necessarily connected to the formal theme of the conference. This year's event has focused on the Human Dimension, but for me, the best insights have been around networks, ecosystems and platforms.

I wrote about platforms and ecosystems in The Social Organization, but only briefly, partly because I ran out of time / wordcount, but also because they're relatively new and I'm still developing my understanding of them. So I was pleased to gain more insight at the forum.

First up on this agenda yesterday was John Hagel, who spoke about developing creative organisations, but also mentioned his work on business practice design. That diverted me onto the Centre for the Edge's site to do some multi task reading on this, as well as on network organisations, which I've written up on Organization.Social.

I think that's relevant because for me, the fundamental basis for ecosystems is the extension of network organisations outside a single organisation, increasingly through the use of digital platforms (and in the future, through Blockchain). 

We also head about one network organisation - Vinci Group - from their CEO Xavier Huillard. Vinci runs as a network, but it's a network of companies not a network of individuals, which is my own interest. 

Vinci doesn't focus on processes but on the network. It's central principle is that people are pulled by the group's values, not pushed by processes. This provides a strong culture, the Vinci Way, and the behaviours published in its Manifesto. Reward is important too, and 120 thousand of their 200 thousand people have a common system of reward providing collective ownership. They own 11% of the group and are collectively its biggest shareholder. Overall, it acts as a decentralised organsiation, with its 3500 business unit heads acting as entrepreneurs. Controls to develop human capital and balance global and local are provided by these inspiring leaders, not an organisational hierarchy.

Michael Jacobides (pictured above) then spoke about digital designed ecosystems. He suggested that ecosystems are becoming new the basis for competition, both in terms of products but business ecosystems (models) too. This is leading to the development of new customer centric, globally connected but locally relevant 'digispheres', this example for the health sector:

All organisations need to be thinking about their places within these ecosystems, whether as orchestrators, partners or contributors (not everyone can or should be an orchestrator, meaning that business leaders need to be aware of their own ego-systems). Eg the second slide here is Phillips Healthcare.

We also heard today from probably the prime example of an ecosystem orchestrator, which is Haier, in a talk delivered by their CEO, Zhang Ruimin, in Mandarin. This wasn't translated on the live stream so I only got a few additional insights on top of what I've previously read elsewhere.

Ruimin explained Haier's Rendanheyi model and the way this has disrupted:

• Employees - from the economic to autonomous person. Emancipating and mobilising people's ability rather than seeking balance or harmony. And seeing the world as my HR department.
• Organisations - from bureaucracy to '3 selves': self employed, self-motivated and self-organised.
• Compensation - from broadbanding to paid by users. Linking income directly to value provided to customers.

This is perhaps the third reason that I didn't write about ecosystems myself. I was writing about social organisations and ecosystems often aren't organisations at all, but market based arrangements for getting work done.

But Haier is at least an 'organisational ecosystem' rather than just a 'business ecosystem', ie it functions as an overall entity rather than just a set of entities whose products stitch together into an integrated whole.

I think both types of ecosystem are going to be an increasingly common way for businesses to do work, and we need to understand how to design them too. (Including designing what I describe as 'social ecosystems' - ones in which social relationships are built to enable and support the transactional commercial arrangements at their core.)

For business ecosystems, we just need to understand how to design our organisation to participate in the ecosystem. For organisational ecosystems, we need to be able to design the whole ecosystem.

So it was good to also hear from Dave Ulrich speaking about market oriented ecosystems (or MOEs) and a logical process for developing such an ecosystem (which actually largely applies to any organisation design):

If you want some support in making this sort of change, please contact:

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#EntDigi #EDS18 Organisation Principles for a Gig Mindset

The first keynote this morning at the Enterprise Digital Workplace Summit in London is from Jane McConnell who runs the annual Organisation in the Digital World survey and is on organisational principles for the 'gig mentality age'.

This isn't about gig workers (though I think that would be interesting to think about too)but salaried employees who are self managing, have the freedom to disagree and challenge ideas; and an entrepreneurial spirit with the freedom to experiment:

"The gig mindset will be the real competitive advantage in the digital age"

Jane suggests eight key differences between the behaviours of these gig mentality workers and employees with a traditional mindset, including being goal oriented, flexible to work in different types of teams and work dynrmaics, creative, willing to challenge ideas and highly aware of the external world.

Organisations need to be more able to adapt because their people will be more adaptable, and also resilient in that they won't get taken down when a disruptive event takes place.  They need to be able to learn and work out loud.

Jane suggests this adaptability requires more focus on skills rather than roles, and that when you do this you fracture hierarchy - which is no bad thing. We also need to redefine leadership as influence rather than hierarchy. And pay more attention to teams, processes, openness, decision making and our vision for how works get done.

I really like this early attempt at rethinking the principles we need in the new digital age and though they're still draft, prefer the direction that they're going to, eg those in Bruce Daisley's manifesto. I also like the fact that they're reasonably succint, eg in contrast to Ray Dalio's TL;DR tome.

There's also another good list from Esko Kilpi here.

They real key though is developing a set of principles for your own organisation, making sure they are aligned with your own particular vision, and are clear enough that they'll influence your actions.

I'll be returning to the theme of principles and organsiation design in my own Enterprise Digital keynote in November.

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Bullshit Jobs

It's been years since I've live blogged. But I'm at a session at the RSA with anthropologist David Graeber speaking about  Bullshit Jobs. So here goes:

People are often apologetic about what they do for a living - often because they're literally doing nothing. That's why you get people playing games and watching cat videos while they're working.

Robots have bee taking our work for 100 years or so but instead of redistributing work we've made unnecessary stuff up. This includes whole industries, things like corporate lawyers which don't really need to exist. The appropach is perpetuated by those in power buying loyalty of structurally unemployed by giving them false management positions. Clerical, administration and supervisory positions often seem to be the worst affected.

YouGov did a survey on this - 37% of people in the UK don't think they make a useful contribution to society. Note this is almost certain to be an under estimation of the true figure for the proportion of useless jobs.

It is an important issue for the economy and humanity - bullshit jobs make people miserable, leading to stree, anxiety and depression.

Graeber  suggests we need to rethink our assumptions around human nature. You would image someone paid well to do a bullshit job would be pleased with their income and free time. However they are often extra miserable because they know they are happy but think they should be.



Later:

I've been reflecting on my own experience of this and although I've never had a bullshit job, have had some bullshit experiences over the years:

•  A bullshit student sponsorship assignment where it was difficult to get much done due to lack of interest from the sponsor
• A bullshit working my notice when I was asked to go into the office even though I had no work to do there
• One bullshit consultancy project very early on in my career designing an organisation for a new group to develop services to support other people helping employees delivering for their customers, which I just thought was so far removed from the firm's customers to be largely pointless (and cost countless millions of pounds) 
• And another which for a short period involved working late into the evening writing a report we all knew nobody would ever read (the firm didn't pay overtime so my assignment partner didn't care)
• A more recent bullshit consultancy project in a dysfunctional client who didn't want to listen to advice about their problems but wanted me to keep going to the end of the contract (and offered too high a day rate to turn down).

That's quite a long list and I found I started to think of more as I started to describe them. In fact I could possibly go on, but really don't feel like I want to.

And yes, these were all fairly miserable experiences.


I suspect and regret that I've also had a temp working for me in a bullshit job where we needed cover for peak activities but where there was not much to do for most of the time.


So although I thought many of Graeber 's points were over exaggerated, bullshit does happen. And I think his fundamental point is sound - we can do more and better. Job design (including the way that people are managed and supported) needs to be seen as more fundamental aspect of organisation design that it often is.

I also recommend David Bolchover's book which I think potentially provides a more balanced summary of the situation.

Interested in the agenda? Come to this training on Job Design for Good Work and Increased Productivity that I'm delivering with Symposium later in the year (or I could deliver in house). I promise no bullshit!

And if it's appropriate, note that I consult on Good Work with the Work Foundation as well as independently.

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