Beyond Organisation Design – escaping the outdated logic of the past to thrive in a VUCA future

Organisations must go beyond organisation design as the ‘next obvious logical step’ following on from strategy development. This conventional wisdom is increasingly outdated in a world where future success depends on adopting innovation as a way of life.

 

Victor Hugo allegedly said that “nothing is as powerful as an idea whose time has come”. In a changing world, nothing is as dangerous as being trapped by an idea whose time has passed.

We have historically designed organisations to operate as if they were machines. This ‘machine metaphor’ logic wasn’t such a bad idea in the relatively stable past, and it worked well enough for the times.

But in an increasingly volatile, uncertain, complex and ambiguous (VUCA) world, the stark choice for organisations is “innovate or die”. And if we want innovation to become a way of life in our organisations, we must go beyond organisation design and the machine metaphor logic on which it’s based.

That’s easy to say, but surprisingly difficult to do.

What makes it so difficult is the 300-year old legacy of machine metaphor logic that’s underpinned Western thought and action ever since the Enlightenment. That legacy goes back to Isaac Newton, the poster child of the machine metaphor.

Newtonian mechanics laid the foundation for many of the scientific discoveries responsible for human progress over the following three centuries. But yesterday’s breakthrough insights eventually become today’s constraining dogma.

As I’ve described in another blog post, the Newtonian legacy is what constrained 20th century physics by blinding its leading players to what Einstein saw and then developed into relativity theory.

Beyond Organisation Design – escaping the trap of machine metaphor logic

But the influence of machine metaphor logic extends far beyond the domain of physics.

Since the industrial revolution, the machine metaphor has become deeply embedded in the way we think about organisations and still underpins most management theory and practice.

Its assumptions are rarely questioned, despite significant drawbacks that are becoming major liabilities. These assumptions include:

Beyond Organisation Design - Organisation Design

  • design organisations for maximum efficiency (despite this reducing flexibility and resilience);
  • manage performance using extrinsic measurement and control (despite this alienating people and encouraging game playing);
  • regard people as interchangeable ‘resources’ (despite us each possessing unique combinations of strengths and weaknesses);
  • achieve alignment using top-down organisation design (despite this destroying agility and innovation);
  • improve performance by following the advice of ‘experts’ (despite this stifling in-house innovation and engagement).

Since the 1950’s, more enlightened thinkers such as Deming, Drucker and Senge have advocated less mechanistic, more human-centred approaches to organisational life. However, the legacy machine metaphor logic remains deeply entrenched in leadership thought and practice.

Beyond Organisation Design – organisations as living organisms within ecosystems

A different metaphor prevails in organisations where innovation is already a way of life.

Most successful high-tech firms operate based on a fundamentally different underlying metaphor. Rather than operating as though they are machines, they function as living organisms within organisational ecosystems.

The ‘organism in an ecosystem’ metaphor is most powerfully represented in the high-tech world of Silicon Valley. The valley ecosystem includes universities, incubators, accelerators, mentors, angels, venture funds, IP specialists, banks, investors and technologists. In this ecosystem there is a constant flow and recycling of wealth, experience and insights through start-ups, IPO’s, M&A’s etc.

Beyond Organisation Design - Silicon Valley

The valley ecosystem has produced some of the world’s most highly valued, innovative, high performance organisations, including Apple, Google and Netflix.

Working in an organisation like this feels very different . Organisations based on machine metaphor logic feel like they exist for the benefit of their owners. Their driving question seems to be ‘how do we control people to get what we want?’

Organisations with an ‘organism in ecosystem’ mindset feel like they exist to benefit everyone in the ecosystem. Their driving question seems to be ‘what can we create that others will value?’ But this feeling and sense of purpose does not arise from a kind of West coast hippy altruism. It arises from the lived experience that as a ‘living organism within an ecosystem’ the organisation is able to consistently unleash ever-increasing performance.

The more VUCA your world, the more your organisation’s ability to survive and thrive depends on going beyond organisation design and making the shift to ecosystem thinking. Ecosystem thinking eliminates braking friction to the highest degree possible. You can find out more about this in my senior executive’s 20-minute guide to eliminating braking friction, which you can get FREE access to here.

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