Part III: Designing Organizations: Efficiency needs some company
Clinging to the past leads to chaos, stifles growth, stops accommodating change, and blatantly ignores what is new. Ideology typically must do this in order to preserve itself. Efficiency, at its ideological core, ignores what doesn’t matter (in regards to itself). But is it possible that efficiency is actually capable of destroying value? At what point does its own ignorance of complexity render itself obsolete? Efficiency can’t continue to be the only thing we rely on to create new value on its own, and its sole use will undoubtedly lead to chaos if it ignores new power structures, new network effects and the need for other values to be successful.
Let’s consider the idea of chaos ensuing for a moment. Today, we love chaos so much so that there are actually different flavors of chaos. We call one flavor Level One Chaos, which is like a factory system. It doesn’t care or is not affected by any sort of prediction about its future. The weather is a Level One Chaotic system. It doesn’t really care if you are prepared for the coming snowpocalypse or not. It won’t dump snow on your roof any more or any less.
Well hey there, friend! There be dragons out there; beware ye of prideful manner! For there is another kind of chaos lurking in the universe called a Level Two Chaos. A Level Two Chaotic system is a system that actually responds and reacts to predictions. (WEIRD!) History is one such system. Markets, politics, and economies are also such systems. In fact, many businesses operate within and across several of these systems much more than we would like to think about. Now, in the current state of our connected world, they operate within a completely different reality than in the past.
There are other theories and examples that have equal sway in our networked and instant world that Taylor never imagined or dealt with. Most likely, these theories have always been a part of our conscience, we just never worried much about them. Maybe we should be asking what other qualities should we be optimizing for? What are some principles that can guide us to find the right mix of oversight and autonomy so we don’t buy too many sticky notes or too much beer versus providing local levels of autonomy that have proven to be so practical?
Even within the most holy center of the Taylorist universe, the US military has had to wrestle with this problem. Even the most impressively efficient machine that can mobilize globally and put resources wherever needed on the planet with amazing speed and efficiency has come to realize the limitations and structural failures of this approach to management. Oh, the heresy! As McCrystal and team summarize in Team of Teams:
“Our struggle in Iraq in 2004 is not an exception — it is the new norm. The models of organizational success that dominated the twentieth century have their roots in the industrial revolution and simply put, the world has changed. The pursuit of efficiency — getting the most with the least investment of energy time or money — was once a laudable goal, but being effective in today’s world is less a question of optimizing for a known (and relatively stable) set of variables than responsiveness to a constantly shifting environment. Adaptability, not efficiency must become our central competency.”
This is a snapshot of the US Task Force commander during the deepest, existential, and hardest part of the war (in multiple theaters of operation), realizing that soldiers’ bodies were returning home dead because of a failure in management. Imagine the courage and tenacity it took him and those around him to look the problem in the face and diagnose it, dismantling hundreds of years of wisdom and best practices to rebuild a new management scheme that would harness the full collective will of the US military in new ways. This is someone who was weaned on Taylorist views, the value of the chain of command, and respect for clear lines of hierarchy. To place adaptability as the primary goal over efficiency, despite that entire historical legacy — to me, at least — took some hard soul searching and guts.
“Biologists have a word for the way in which solutions emerge from failure: evolution. ”
― Tim Harford, Adapt: Why Success Always Starts with Failure
Not all of us are reinventing such large and vital organizations, but I am sure many of us care deeply about setting ourselves and our clients up for success while doing great work in the time we have.
What does a successful organization look like?
Well, we have learned from our storied past and have heard the tales of great wealth unleashed upon the world. The amount of success and wealth achieved in the last hundred years had never before been seen on this earth. Alas, all of this wealth came at a price that we are now paying with climate change, inequality, environmental degradation, and biomass loss the likes of which have not been felt (probably) since the last great extinction. Yes, humans certainly can do what is efficient pretty well by now.
Not all companies are the same, of course, and in fact there are many nuances in how they differ. Yet, if we were to describe the epitome of a typical organization’s cultural values (in black on the left) they would regress around things like efficiency. Other values sit at the table, too, however, and are important (listed in red on the right below).
Do those qualities in black look familiar? But what about the values (in red)? What can they tell us? The values are quite different, and really incommensurate within these organizations.
The fact is, these two sets of values are at play within large companies and organizations already and are causing some interesting tectonics. They are starting to shift the focus and ways business gets done (emerging out of a true business need) over the last few decades, which is why many innovation groups within large institutions still feel like threats to the larger organization. The innovators themselves can often sense passive, but deep seated, hostility from the core businesses or institution. These shifts are never easy. The value systems are in tension, and misaligned. We are seeing this on the front lines from industries such as Pharma/Healthcare, Technology, Manufacturing, Retail, Finance, Education, even Government.
Many industries are in the middle of some existential struggle to figure out their next iteration as a company. Innovators are not immune either. We are in the middle of a massive shift in how business gets done, and how groups work together towards a common goal. I believe we are seeing a similar sea change as we discussed earlier around the celebration of Taylorism in 1910 — unlocking value wherever applied. But what is the magic being applied? It’s not efficiency companies are so enamored about, it’s now about building resilience and adaptability.
Part I: Designing Organizations: What’s wrong with efficiency?
Part II: Designing Organizations: How Efficiency Became King
Part IV: Designing Organizations: The Perennial Search for Inspiration
Part V: Designing Organizations: What’s next? Designing Organizations for the 21st Century
Other Articles by Ric Edinberg
Is Design Thinking Really Bullshit?
Influential References
Burlingham, Bo. Small Giants: Companies That Choose to Be Great Instead of Big, 10th-Anniversary Edition. 2016. Print.
Churchill, Neil, and Virginia Lewis. “The Five Stages of Small Business Growth.” Harvard Business Review. 1983. Print.
Drucker, Peter F, and Mark Blum. Management Challenges for the 21st Century. Solon, Ohio: Playaway Digital Audio, 2009. Audio.
Harford, Tim. Adapt: Why Success Always Starts with Failure. 2012. Print.
Harari, Yuval N, John Purcell, and Haim Watzman. Sapiens: A Brief History of Mankind. 2015. Print.
Kilcullen, David. Counterinsurgency. Brisbane: Queensland Narrating Service, 2010. Audio.
Kilcullen, David. Twenty-eight Articles: Fundamentals of Company-Level Counterinsurgency. Washington, D.C.: Iosphere, 2006. Web.
McChrystal, Stanley A, Tantum Collins, David Silverman, and Chris Fussell. Team of Teams: New Rules of Engagement for a Complex World. 2015. Print.
Mintzberg, Henry, and der H. L. Van. “Organigraphs: Drawing How Companies Really Work.” Harvard Business Review. 1999. Print.
Mokyr, Joel. The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton: Princeton University Press, 2011. Print.
Wilson, EO. “Consilience Among the Great Branches of Learning.” Daedalus. 127.1 (1998): 131–49. Print.
