The Scrapheap Architect

Exploring technology and the institutions that create it

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I’ve just finished reading Reinventing Organisations, by Frederic Laloux, and I want to recommend it to you all, and I don’t say that lightly. I read quite a few books on leadership and organisational change, and this is probably the best and most progressive.

http://www.amazon.co.uk/dp/2960133501/ref=sr_1_1?ie=UTF8&qid=1440945851&sr=8-1&keywords=reinventing+organisations

In a nutshell, the book takes a bunch of frustrations about the failings of typical organisations and characterises them as symptoms of our current paradigm, rather than the usual assumption that they represent poor implementations of an inherently good (or at least unquestioned paradigm). In a single book it covers almost every topic (tale portfolio management, and performance related pay as two good examples) that has been discussed and helps show that they are symptoms of the same problem, and not truly independent things as we may have assumed.

The book starts by setting out a framework (which I’ll share in a moment) for describing different organisational paradigms, before looking intently at the differences between the current prevailing paradigm and the one advocated by the book, using 12 inspiring case studies. At this stage of the book it’s basically boiling frogs on steroids, with a more structured and academic approach. The middle of the book got a bit “happy clappy” for me (lots of talk of meditation and wholeness) before delivering some really cutting advise on how to realise the progressive organisation he describes towards the end of the book.

The framework that the book uses is to order to the different paradigms used to organise people over time, and their strengths and limitations. Each is given a name and a colour and discussed in some detail. The table here gives a very brief summary:

[colouring org types

Even looking back over the 15 or so years I’ve been at work I can see a transition from a mostly amber (with hints of red) culture to a mostly amber (with bits of green) culture. In other words we’ve come a long way.

The next state is called “Evolutionary teal” and is where I guess the book will divide readers. Up until now the point has been (somewhat indisputably) that have had several different paradigms for organising ourselves, not just the current one, which helps make it more transient.. Teal is described (in detail, and in contrast to orange and green) using topics such as:

  • organisational structure
  • stuff functions
  • coordination
  • projects
  • decision making
  • information flow
  • conflict resolution
  • performance management
  • compensation
  • dismissal

In one sense the discussion around each of these topics is not particularly novel for those that have heard about Gore, Semco, Zappos, etc. but what the book does is a) give a convincing description of the faults of the current normal paradigm, b) convince you (through several different examples) that there are different ways and c) pull the changes into a coherent framework.

I would love to retell the stories here, but I don’t think I’ll do the book credit. Instead I’ll provide a couple of quotes and leave you to read the book, and if you don’t have time to do that at least watch the youtube video (https://youtu.be/gcS04BI2sbk)

“If the notion of trusting the collective intelligence of a system seems risky or outright foolish, think about this: the idea that a country’s economy would best be run by the heavy hand of central planning committees in Soviet style has been totally discredited. We all know that a free-market system where a myriad of players pick up on signals, make decisions, and coordinate among themselves works much better. Yet for some strange reason, inside organizations, we still trust the equivalent of central planning committees. Self-management brings the principles that account for successful free-market economies inside organizations.”

“There is no master plan. There are no project charters and no one bothers with staffing people on projects. Project teams form organically and disband again when work is done. Nobody knows if projects are on time or on budget, because for 90 percent of the projects, no one cares to put a timeline on paper or to establish a budget. A huge amount of time is freed by dropping all the formalities of project planning—writing the plan, getting approval, reporting on progress, explaining variations, rescheduling, and re-estimating, not to mention the politics that go into securing resources for one’s project or to find someone to blame when projects are over time or over budget”

“Buurtzorg has incredibly motivated employees (it is regularly elected “best company to work for” in the country) but, like many other Teal Organizations, it has no human resources department”

“Or take the budget process that sets everyone’s objectives, a critical piece in the puzzle to give people room to maneuver. It makes perfect sense in principle. But anyone who has gone through such a process knows how quickly it starts breaking down. When top management asks departments to make their budgets, people play a game called sandbagging—they push for the lowest possible expectation to make sure they will achieve the targets and collect their bonuses. When the numbers don’t add up, top management arbitrarily imposes higher targets (which they make sure exceed what they promised to shareholders, to ensure they will make their bonuses too), which people lower down have no choice but to accept. Instead of frank discussions about what’s feasible and what’s not, people exchange spreadsheets with fictive forecasts driven by fear of not making the numbers. In the process, budgets fail to deliver on one of their key objectives: making people feel accountable and motivated for their outcomes.”

“At FAVI, a simple but powerful relief valve exists, should a team leader find the taste of power too sweet: workers can choose at any moment to join another team. Team leaders have no meaningful way of coercing people into desired behavior; they certainly don’t have the authority to fire people unilaterally. If they start to behave autocratically, people can simply walk away”

“targets are problematic for at least three reasons: they rest on the assumption that we can predict the future, they skew our behavior away from inner motivation, and they tend to narrow our capacity to sense new possibilities.”

For those that have some natural scepticism about this (which I think it’s important to retain) the most important point made time and time again in the book, is that this isn’t about anarchy or chaos. Everything is still managed, it’s just that the way those things are managed is mostly not about command and control but instead about social institutions. By way of example is someone likely to work harder to meet a goal set in their annual objectives or to keep a promise they made personally to a colleague? For me the answer is obvious, and that is really the message of the book – one organisational function at a time.