Agile organisations move beyond organisation design to thrive in a VUCA future

Agile organisations go beyond the conventional wisdom of organisation design – recognising that it’s increasingly outdated in a world where future success depends on innovation as a way of life.

Victor Hugo allegedly said that “nothing is as powerful as an idea whose time has come”. In an increasingly volatile, uncertain, complex and ambiguous (VUCA) world, nothing is as dangerous as an orthodoxy whose time has passed.

We have historically designed organisations to operate as if they were machines. This ‘machine metaphor’ logic worked well enough over many decades in the relatively stable, predictable, simple and uncomplicated past.

In an increasingly VUCA future, the stark choice facing organisations is “innovate or die”. But building an innovative agile organisation is not about designing a better machine. Innovation and agility are organisational capacities that are cultivated, not designed.

If we want innovation and agility to become a way of life in our organisations, we must go beyond organisation design and the underlying metaphor on which it’s based.

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

What makes it so difficult is that it involves breaking free from a 300-year old tradition that’s underpinned Western thought and action – ever since The Enlightenment. It’s perhaps the most enduring legacy of one of history’s most famous scientists – Sir Isaac Newton’s machine metaphor.

Newtonian mechanics laid the foundation for most of the science behind the progress of human civilisation over the subsequent three centuries.

But the problem with the breakthrough insights of the past is that they often become constraining orthodoxies of the present that hold us back from creating the future.

It was the Newtonian legacy of the machine metaphor that held back physics in the early 20th century until an unknown Albert Einstein broke free from its constraints to develop relativity theory. 1

Beyond Organisation Design – escaping the trap of machine metaphor logic

But the constraining influence of the machine metaphor 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 continues to underpin most management theories and practices.

Its assumptions are rarely questioned, despite significant drawbacks that are increasingly major liabilities in a VUCA world. These include:

Beyond Organisation Design - Organisation Design

  • design organisations for maximum efficiency (even though this reduces their flexibility and resilience);
  • manage performance using extrinsic measurement and control (even though this alienates people and encourages game playing);
  • regard people as interchangeable ‘resources’ (even though each of us possesses unique combinations of strengths and weaknesses);
  • ‘develop’ people so that they better fit the constraints of predefined ‘job descriptions’ (even though morphing the organisation to leverage people’s strengths makes their individual weaknesses irrelevant);
  • achieve alignment using top-down organisation design (even though this destroys agility and innovation);
  • improve performance through interventions mobilised by external ‘experts’ (even though developing an organisation’s innovation strengths requires internal people to ‘do the heavy lifting’).

Since the 1950’s, more enlightened thinkers such as Deming, Drucker and Senge have advocated less mechanistic, more human-centred approaches to organisational life.

Nevertheless, the machine metaphor remains deeply entrenched in organisational theory and practice.2

Beyond Organisation Design – organisations as living human communities within ecosystems

But some organisations have avoided the trap – or at least have minimised its constraining of agility – such as high-tech firms in which innovation has always been an established way of life.

The most successful high-tech organisations have a culture of innovation based on a fundamentally different underlying metaphor not of machine to be designed and controlled but of living human community within an ecosystem.

This living community within ecosystem metaphor is most powerfully prevalent in Silicon Valley. The Valley’s high-tech ecosystem features universities, incubators, accelerators, mentors, angels, venture funds, IP specialists, banks, investors, scientists, technologists, engineers and mathematicians all interacting in a context that features the constant flow and recycling of money, 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.

To people working in them, organisations based on the machine metaphor feel like they exist to benefit their owners, with a driving philosophy of “how do we control people so they increase our profits?”

Organisations based on an living community within ecosystem mindset feel very different – like they exist to benefit the ecosystem they live in, with a driving philosophy of “what do we create that’s of value to others?”

But despite sharing West coast origins, this isn’t a hippie-like altruism. It’s simply that living communities need to be part of an ecosystem if they’re to survive and thrive.

The more VUCA its world becomes, the more an organisation’s future depends on it escaping the machine metaphor, going beyond organisation design, and operating as a living community in an ecosystem that encourages inter-organisational innovation and agility to flourish.

  1. Find out how Einstein first broke free from the old Netwonian orthodoxy but then became trapped in the new scientific model that he was instrumental in creating here .
  2. The ‘organisation as machine’ is one of four common and widespread organisational metaphors that underpin the Five Fatal Habits that kill innovation and agility. You can download my 22-page guide to overcoming these habits and building an innovative agile organisation here.
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