Brave New Work: Are You Ready to Reinvent Your Organization?

by Aaron Dignan

Everything that needs to be said has already been said. But since no one was listening, everything must be said again. —André Gide

We don’t have enough time to do our work, but we pack our days with endless meetings. We don’t have the information we need, but we are buried in emails, documents, and data. We want speed and innovation, but we run from risk and inhibit our best people. We claim to work in teams, but we don’t really trust one another.

Surprising, right? We confuse popularity with quality.

When it comes to how they build teams, manage projects, make decisions, share information, set targets, review performance, and set compensation, their approach is not a signal-controlled intersection but a roundabout. They use purpose, transparency, and reputation to create cultures of freedom and responsibility. They are intentional but full of serendipity. They are decentralized but coherent. Above all, these firms are People Positive and Complexity Conscious—

There was only one problem: it was exhausting. As it turns out, controlling everything is not really sustainable. And even when it works, it’s unfulfilling. I would lie in bed night after night, sometimes at two or three in the morning after working a sixteen-hour day, with the same thought stuck in my head: this can’t be the best way to run a business. Slowly the realization hit me. If I truly was the hero leader, the single point of failure, then what had I really built? A fragile system.

we’d realized what only those companies that really care about their way of working know—that you’re never done. You’re always learning. Always changing.

If you think certifying your project managers in Scrum is going to topple your bureaucracy, you’re in for some major disappointment. Agility is a mindset, not a tool set. It’s a piece of the puzzle, not the whole thing. It is necessary but not sufficient. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble. —Harrington Emerson

Thich Nhat Hanh wrote in Old Path White Clouds, “A finger pointing at the moon is not the moon.” When we focus too much on the method or the messenger, we lose sight of the deeper truth. The cases and stories I’ll share in the pages ahead are fingers pointing at a better way of working. While we can draw inspiration from them, each of us must do the work of nurturing and evolving our own way.

Henry Gantt gave us the chart that bears his name—used to this day to illustrate dependencies within complicated projects and processes. But Gantt baked in a dangerous assumption: that the world can be predicted. In Gantt’s repetitive world of manufacturing, this was tolerable, even helpful. But as his practices fanned out into knowledge work, they became a dangerous addiction. Instead of a means to an end, hitting the plan became an end unto itself.

Planning is good. The plan worthless.

I define organizational debt as any structure or policy that no longer serves an organization.

One of the most common sources of org debt is the knee-jerk reaction. Every time something goes wrong, we immediately jump to create a constraint that will prevent future mistakes. So we institute a new role, rule, or process. As a result, over the course of a decade or two, a one-step process becomes twenty steps. Or five different processes become entangled. Or ten different roles become approvers for a simple decision. And so it goes, on and on. This increase in complication creates more risk, so we create derivative roles and rules to manage it (they’re called project management offices, or PMOs). Under the guise of creating order, we drift toward the disorder of a thousand stupid rules, leaving no ability to respond to the world as it unfolds.

The cost of creating process.

The ever-growing invite list for the monthly meeting that nobody likes? That’s debt.

to avoid the pitfalls of organizational debt, we need constant and vigilant simplification.

While labor productivity may not be growing as fast as it used to, it is certainly higher today than ever before. Between 1973 and 2016 net productivity rose by 73.7 percent. What do you think happened to wages over that same time frame? If you guessed that they were stagnant, you’re catching on. Wages were up just 12.5 percent over those same forty-three years, meaning that productivity has outpaced pay by 5.9x. Meanwhile, the ratio of pay between the CEO and the average worker went from 22.3:1 to 271:1. Move along, folks, nothing to see here.

Over many years of collaboration and study, their groundbreaking work evolved into self-determination theory. They proposed that we have three innate psychological needs that drive and shape our behavior: autonomy, competence, and relatedness.

We cannot do the best work of our lives under the auspices of an OS that presumes our stupidity, our laziness, and our untrustworthiness. When it comes to people, in many ways you get what you design for. Evolutionary Organizations know that if you treat people like mercenaries, they will become mercenaries. Treat them like all-stars and they will become all-stars. To be People Positive is to assume and expect the best of everyone.

Software is complicated. Creating a software startup is complex.

In today's world with cloud sevices and such where problems are near impossible to track down couldn't software be considered complex? Also software includes users, unreliable networks, etc which can also make it complex.

The mainstream view is that performance is the result of compliance. If we can just get everyone to do exactly as we say, we will achieve our goals. This translates into a culture buried in governing constraints—rules, policies, or processes for every imaginable scenario that dictate exactly what should be done. But Complexity Conscious leaders view performance as the result of collective intelligence, emergence, and self-regulation. If we can just create the right conditions, everyone will continually find ways to achieve our goals. This translates into a culture that is made coherent and free by enabling constraints—agreements that create freedom to use judgment and interaction in the vast majority of situations.

Or you could try to create a solution that is a bit more like a roundabout. Share total travel spend by team (or by individual) with everyone in the company transparently, so they can see how they compare. Share industry averages and historical averages for your firm. Ask for everyone’s help in optimizing spend, illustrating how it will drive overall profitability (and thus profit sharing, if you offer it). Start a practice of frequent travelers sharing travel hacks and pro tips at your all-hands meeting. Model what good choices look like with your own behavior. Then stand back and see what unfolds.

Which brings us to one of the most important things leaders and teams need to internalize: our way of working is completely made up. This isn’t the way it has to be, or even the way it always was. Our way of working was created, brick by brick, by gurus, industrialists, robber barons, unions, and universities—generations of managers and workers who came before us. We can thank them for what is still serving us, and we can change the rest.

If we say we value agility, but every decision requires a dozen approvals, the opportunity is clear.

Instead of listing approvals and steps of a process, list goals which may be achieved by other means or skipped altogether when appropriate.

The canvas is a tool for reflection and sensemaking, not judgment.

Fractal Purpose. Every organization has a purpose. But not every organization ensures that its purpose is fractal—that it shows up at every level.

At my company we used to track how many followers we had across social media. We got worked up about it. Then one day we asked ourselves, Have we ever made a change based on these metrics? Nope. We stopped tracking them that day. Last time I looked they were still going up.

Whole Foods can’t tell if they’re nourishing people writ large. But they can tell if more people chose to buy organic fruit last week, or purchased items that contained less sugar, or submitted more positive feedback about their experiences in the store. And that information might be enough for the brand to take a few more steps in the right direction.

Ask every team in your organization to articulate their essential intent. What has to happen in the next six to twenty-four months to keep us moving toward the organization’s purpose? Share and discuss over drinks one afternoon. Resist the urge to make them all fit together perfectly. Instead, notice and discuss divergence and convergence. Offer everyone the chance to revise and refine their essential intents regularly, and keep them somewhere everyone can access them.

Clarify your purpose so that you can see it three decades down the line. Then tighten up your road map for the next half year.

Short term objectives alone are not enough—you need a vision for guidance. And detailed long term plans are a waste.

A client recently told me the story of an initiative that required sixteen individual sign-offs before proceeding. This is our addiction to control masquerading as “risk management.” What firms like this fail to recognize is that the true risk they face is that bureaucratic immobilization will make them irrelevant.

In their book Rework, Jason Fried and David Heinemeier Hansson of Basecamp warn that isolated incidents can too easily lead to bureaucracy. “Policies are organizational scar tissue.11 They are codified overreactions to situations that are unlikely to happen again.

You can institute a waterline in your firm. What sorts of decisions can everyone make without consulting others? How much authority are you willing to distribute with no strings attached? Make this explicit and push back when colleagues come to you for permission on something above the waterline. Ask them what they intend to do.

Consent. Going around the table, give each participant the chance to voice an objection, if they have one. An objection is defined as “a reason this would be unsafe to try or would cause irreversible harm to the team or organization.” This is a high bar by design, as the goal here is progress—a safe step toward resolving the original tension.

Disagree and commit

the vast majority of teams don’t feel they have ownership over their way of working. From the roles they play to the meetings they attend to the tools they use, everything has been dictated to them for far too long. Before you run headlong into changing the big stuff, offer your teams the authority to change a few things about how they work together. It’ll go a long way.

In a complex world, decentralization offers many benefits, but we need to maintain collective coherence. To achieve this, we can leverage transparency, social pressure, and principles. What simple rules would have to be in place to allow local or decentralized authority and action in perpetuity?

Job titles mask the complexity of the roles we hold, and they limit our ability to shape them and step in and out of them freely. Instead, think of the organization as a rich network of roles that can be filled and shaped by anyone. Don’t limit yourself (or anyone else) to one static job description. Recognize that you already hold many roles in many places. Claim them.

Maybe it is worth describing responsibilities in terms of such roles not job titles. E.g. hiring manager, tech lead, technical project lead, etc.

Clarify and specify structure when helpful, but do so in pencil.

Legacy Organizations fall down on strategy in two ways. They hesitate to make the kind of bold trade-offs that cultures such as Medium, Tesla, or Apple do every day. In their desire to be “the leader,” they try to appeal to everyone, do everything, be everywhere, and offend no one. But good strategy is about identifying critical (and often controversial) factors that are going to define the future of a category.

If you don’t have a compelling vision—a dent in the universe beyond shareholder value—your strategies will fall flat. Because how can we win if we don’t know what winning looks like?

Your purpose is clear. Your essential intent is well defined and regularly tuned. Using these beacons, people are “voting with their feet” and energizing the projects that matter most. Your even over statements are shaping a thousand smaller decisions. It’s fair to ask, Do we even need a plan? Yes, but not a plan that says what must happen, a plan that says what might happen.

the annual planning process. In traditional organizations, this document lays out where we will play and how we will win, and contains implications for structure, budgets, projects … everything. The problem is that we put so much effort into creating it that we treat it as gospel. It becomes true north for our activity rather than what we’re seeing and learning in the real world. This prevents teams from evolving their OS. Instead, demote your annual operating plan. Make it an annual operating prediction. Let teams take ownership of their local expression of strategy and operations. This will leave space for emergence and harness the full potential of your membership.

The idea that the underlying assumptions in the budget may have been unrealistic is never seriously considered.

Most important, budgets can actually work against performance. Dr. Steve Morlidge offers a simple explanation for this in The Little Book of Beyond Budgeting. “Budgets also sub-optimize performance by forcing the business to use the same set of numbers for competing purposes.29 On the one hand, good targets need to include an element of stretch, but forecasts need to be realistic, while cost budgets need to be ‘tight’ in order to constrain spending. It’s simply not possible to fulfill all three purposes using the same number.”

Check book

“Revenue targets can act as a ceiling since there is no incentive to exceed them, whereas cost budgets become a floor as there is no motivation to spend less.”

Where a Legacy Organization might commit to a specific revenue-growth target for the year, Beyond Budgeting would recommend beating the average performance of their competitors.

Elinor Ostrom shared the 2009 Nobel Prize in Economics for her research into how humans successfully (and unsuccessfully) manage the commons. What she found was that successful communities leverage something she calls polycentric governance.

Check

To get a sense of how it works, invite your team to try something like Cobudget and put your discretionary budget for the next quarter on the line. You’ll see a whole new level of engagement.

Check

They were so excited with the results that they brought them to Buurtzorg CEO Jos de Blok. This program should be rolled out across the entire company, they said. But instead of assigning a task force or piloting the program in other regions or announcing it as a company-wide initiative, he did something else entirely. He asked the team to write a story about what they’d created and publish it to the company’s internal social network, along with a guidebook for how to stand up the program. If the idea was good, he reasoned, it would spread.

Next time you hear a great idea or see a winning approach, don’t roll it out, offer it up.

If a colony is released into an empty room (low/no information) they will fan out in increasingly random patterns. Introduce an apple (valuable information) and they will quickly converge upon it. Interestingly, most but not all of the ants will seize on the “sure thing” the fruit represents. Their built-in algorithms ensure that some percentage of their membership continues to look for the next big thing.36 This harkens back to Taleb’s barbell strategy. When we have a sure thing on our hands, we should deploy most but certainly not all of our resources there. When we don’t know what’s going to work—in a startup or new division, for example—we need to increase exploration, randomness, and variation, even if it feels a little counterintuitive.

Instead of enforcing standards, think about proven practices as defaults. Defaults are exactly like standards with one exception: you don’t have use them. A default says: If you don’t know what you’re doing, do this. If you don’t have time to think, try it our way. But if you’ve achieved some level of mastery in an area and you think you see a better way, feel free. Let us all know how it goes, because either you’ll generate further proof that our default is sound or you’ll sow the seeds for a new default that we can all benefit from.

Instead of trusting your assumptions and barreling ahead, you’re going to identify them and ask one of the most powerful questions in innovation: how might we validate that?