Trust the humans, not the machines.
Go Your Own Way
I’m a big fan of self-organisation at work, which is why I was attracted to Frederick Laloux’s TEAL model for organisations. In fact, it was through reading his book ‘Reinventing Organisations’ that I realised that self-organisation was the thing I was interested in. Before that I’d looked with interest at flat organisations of various flavours but I couldn’t quite work out what was missing from them.
I’d been involved in an exercise in flattening an organisation back in the 1980s when BT implemented ‘Project Sovereign’. This was a massive restructure to create an organisation that had only 6 layers from the bottom to the top. The idea was to make BT a more modern and responsive organisation. And also make lots of people redundant, something it had never done before. Which of those was the more important? I’ll leave you to decide.
It wasn’t a great success. Well, they did make lots of people redundant, so I guess that depends on how you answered the above question. The organisation did, briefly, consist of only 6 levels. However, managers quickly found work-arounds and wheezes to restore bits of the hierarchy (one them being the infamous ‘dotted-line responsibility’, by which you could report to someone who was at the same level as you on the new streamlined org chart - but just might have been your boss before the re-org). After 6 months, it was looking a bit ragged. After 18 months, the org chart seemed to have become something closely resembling its previous incarnation and ‘Project Sovereign’ was never spoken of again.
These ‘flat’ structures seemed to be more about organisational structure and cost-savings than anything else. I realised that what appealed to me about self-organisation was that it is about autonomy and freedom. It’s about the humans, not the Org Chart.
I’d always had a fair degree of autonomy in my job, whether through design or neglect (you can do an awful lot if no-one’s really interested or paying attention), so it aligned with my personal experience and views on what is effective.
I also hate being told what to do, so that’s probably part of it. Self-organising means people are treated like adults and so it’s very different to the Parent-Child relationship that you experience in command and control environments.
I was excited by the ideas and the principles behind self-organisation but, I have to admit, I got quite disappointed at the low level of adoption of something that just seemed so obviously right to me.
And then I came across the Pirates, and found that self-organisation was at the heart of pirate society, alongside freedom and democracy. So now self-organisation was not only the right way to go, it was cool too. Surely it was unstoppable!
However, the Status Quo is the Status Quo for a reason. It has massive inertia and in very good at resisting change. So progress remained slow.
There has been light on the horizon, though. Laloux identified a small number of companies that used self-organisation, and this list has been steadily growing. Now we’re seeing some big companies start to move in this direction, as they attempt to become more agile, more responsive to customers and more resilient to external shocks.
It could be that self-organisation is the biggest change to happen to organisations that no-one’s talking about.
You’re Moving Out Today
The latest company to move in this direction is the pharmaceutical giant, Bayer.
They have said they are moving to a new model, Bayer’s Dynamic Shared Ownership. It’s a radical restructure of their business, which Bayer say they are doing for the following reason
“Through DSO we are actively and intentionally shifting our focus from internal processes to meeting customer needs and radically shifting decision-making power from managers to the people closest to our customers — because they are the ones who understand their needs the best and can make a direct, positive impact.”
This will mean focusing on three things:
Entrepreneurial culture — empowering people closest to the customer
Decision-making speed — moving from annual to 90-day working cycles for faster innovation and response time to customer needs
Impact-guided talent flow — reducing silos, and allocating resources and talent to where the greatest impact can be achieved
(For a more detailed analysis, you can read this blog by Lizzie Benton at Liberty Mind, or this article by Lisa Gill on Medium)
There are still quite a few questions about how this is going to work. It’s not as human- focused as I would like, although that may be because we haven’t seen the detail. It does involve making a large number of managers redundant, which may be an inevitable consequence but doesn’t sit too well (although the counter-argument is that the necessary change would be too difficult and painful for them, so it’s kinder to let them go).
One thing that’s interesting to me is the reason why Bayer are going down this path. They are a company that has been struggling and in decline for a while now. Put simply, the old ways were no longer working and so they had to change or die. Crisis makes hard decisions a lot easier to take, and risk is less of a problem.
Bayer headhunted Bill Anderson, the CEO of Roche (a smaller pharmaceutical company) because he had already implemented self-management there to great effect. Having an example of successful change in their own industry would have greatly reduced their perception of risk, and getting the guy who did it reduced it further.
They are clearly taking inspiration from Haier, the Chinese white goods manufacturer, and their RenDanHeyi model. It’s an entrepreneurial-based approach to self-organising and has been the core of Haier’s success. They’ve also exported it to the western business environment through their acquisition of GE Appliances.
Bayer are also partnering with Gary Hamel, a long-term advocate of innovative management practices, who’s book ‘Humanocracy’ (co-written with Michele Zanini) takes the ideas around self-organisation but frames them as a means to slay the beast of bureaucracy and release the potential of the people in the organisation.
Laloux’s work was from a more spiritual source and was, I suspect, dismissed by many as being ‘flakey and woo-woo’. However, it started a conversation which has drawn in some real heavyweights and inspired a movement which now has real heft behind it. What seems to be gaining traction is a more pragmatic version based around muscular entrepreneurialism. Whilst this has an obvious appeal to the US-dominated business environment, it is ironic that it emerged in China.
There is a danger that this form of self-organising, as it moves inexorably through the American academic-publishing-consultancy complex, becomes less about the freeing of the human spirit and more about revivifying the current exploitative model. Expect McKinsey’s to be offering to do a ‘Bayer’ on your organisation soon.
It would also be a mistake to see this entrepreneurial form of self-management as ‘the acceptable version’ of self-organising because it’s couched in the language of business and entrepreneurialism rather than spirituality. Haier’s model, developed over several iterations by its Chair and CEO Zhang Ruimin, draws on both eastern and western philosophies and has deep roots.
Also, I expect spirituality to increasingly feature in business, as people reject the naked capitalism and reductive financialisation of the past few decades. (Spirituality used to have a more prominent role through ideas like the protestant work ethic and many companies were founded on strong moral conviction and a desire to serve society e.g. the Quakers and the confectionary companies of Cadbury’s, Rowntree’s and Fry’s.)
There are still many elephant traps in the road ahead but Bayer could mark a turning point in the adoption of self-organisation and the delivery of better workplaces for employees more generally. I certainly hope so.
Less Than Zero
Of course, what is generally held to be the biggest change that is happening to organisations is Artificial Intelligence. Ed Zitron disagrees and explains why in his latest newsletter, entitled ‘Subprime Intelligence’.
Zitron’s scepticism (which I share) is based on three points.
The first is that ‘Artificial Intelligence’ has not got any intelligence. It doesn’t ‘know’ anything. It’s just sift and sort on steroids, or what he calls ‘giant math machines’. The latest marvel, Sora, can produce 60 seconds of realistic-looking video based on some prompts. However, it’s not realistic, it’s realistic-adjacent. When you look closely, there are errors. The way the woman walks is wrong, she has four fingers, that sort of thing.
The AI doesn’t know about how people walk, or about hands, or about anything else. It’s just making guesses based on all the information it’s been trained on. These mistakes, these hallucinations, are not a bug. They are a feature. The AI can’t do realistic because it has no knowledge of what reality is.
The second problem is that no ‘killer application’ has been identified for AI. Certainly nothing that will generate the sorts of returns all the investors in AI are hoping for. You can use it in lots of different ways but none of them are a sufficient leap forward. Useful perhaps, but essential? Commanding a premium?
The third problem is one of costs. Huge amounts of money have been ploughed into developing AI and more is expected. Running the AIs takes huge amount of computing power and energy. As a result, AI firms have much lower margins than conventional software companies.
It doesn’t matter how whizzy the technology and how hyped it is, business is still business. To succeed you need a compelling proposition, reliable delivery to an acceptable standard and a solid, sustainable business model. None of these are currently present.
What is present is a tech and investment ecosystem that is continually looking for the next ‘big thing’, backed by large amount of investment seeking super-profits in the way of returns. In other words, Unicorn hunters. You know, the ones that thought the metaverse and crypto looked like unicorns. They worked out well, didn’t they?
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Take On Me
I’ve had a couple of great conversations this week from readers who have got in touch. I’d love to hear from more of you, so if you fancy a chat, you can book a slot on my Calendly page (if you don’t see a time that suit you there, drop me an email at colin@colinnewlyn.com. One of the people I spoke with was in Australia and had got up in the early hours. She assured me she would have been up then anyway but it was an hour I rarely see, so I don’t want to inflict that on anyone!)
If you’re someone who is at a bit of a crossroads in your corporate journey, what someone described to me as a ‘Career Identity Crisis’, then I’d like hear what your challenge is and see if I can help move you forward.
Or if you’ve already decided on a path but it’s going to take a while to get off the corporate hamster wheel, I’d like to talk to you about how you cope with the corporate world until you manage to escape. I’ve been working on a ‘Corporate Survival Guide’ for a while and it would be great to share ideas with people who are living the problem.
Or if there’s anything else you’d like to talk about. Maybe something I’ve written or a project you are working on, or your experience of corporate fantasy land, or some Dad jokes you want to share.
So get in touch, I’d love to hear from you
Book a call on my Calendly page
Email me at colin@colinnewlyn.com