The Organization Lab (o-Lab): How might we create the next iteration of our organizations?
Few would dispute that innovation in technology is a driving force of progress in our society. Innovation in technology also sets our expectations for innovation in other aspects of life: as our smartphones and tablets become more advanced, we expect the same from our classrooms, our government, and even each other.
It is therefore puzzling how little attention, relatively speaking, has been paid towards innovating one of the most ubiquitous technologies on earth: the organization.
Organizations are a human-created technology — utilized every day by all of us who work, interact, and live in them. Like most technologies, organizations serve a specific purpose: to coordinate and integrate action amongst groups of humans towards a common goal. We have used a standard set of organizational structures for centuries to pursue a wide range of goals , but the rate of change has been sluggish. If we pulled some 35-year-old org charts out of the Harvard Business School archives and compared them with modern day ones, the differences — if any — would pale in comparison to the same 35-year difference between the first IBM PC and your iPad Pro.
It’s not that there haven’t been claims of obsolescence for traditional organizational forms. Inspired by the rise of the Internet, for example, the idea of the “networked organization” emerged in the 1990s and early 2000s, fueling speculation that vertical hierarchies and centralized bureaucracies would move towards fluid, project-based, peer-to-peer work. Then, in the last decade, the rise of social media has led some to suggest that organizations will go even further towards structureless, emergent collaboration in communities.
Yet, for all the technological advancements that we have seen in the last several decades, the technology of organizational structure does not seem to be keeping up.
A few basic designs dominate the landscape, and they seem to be failing us on a human level, often proving more frustrating than inspiring. If you ask people about their frustrations with organizations (yes, this is what professors of organizational behavior use for small talk at parties), they will have no trouble producing a list of organizational ills in seconds — and if you ask ten random people, you’ll get ten remarkably similar responses.
That’s not to say we aren’t trying. Entire careers have been made trying to design, and redesign, better organizations. Some organizations, including Medium, have been both thoughtfully daring and boldly public in their attempts to try new organizational structures. But we just don’t seem to make much progress at scale. Reversion to the mean is extremely common. All of that in spite of the increasing prevalence of design thinking, which raises our expectations that things we interact with will take our humanity into account, be made for us, and just work.
Meanwhile, creative destruction in business is accelerating: the average age of a firm in the S&P 500 has dropped from 60 years to less than 20 years since 1960, and an S&P 500 company is now being replaced every two weeks, on average. The linear approach of the industrial era is struggling to keep up with exponential innovation enabled by exponential improvement in core technologies. On top of all that, the forces of globalization, economic liberalization, and democratization of powerful creative technologies have created historically-low barriers to entry and unpredictable competition. The result: a deepening mandate for organizations to be responsive, placing substantial stress on organizational structure.
Bringing Rapid Experimentation to Organizational Structure
We’ve known for a long time that there is no one “best” organizational structure for everyone — it is contingent upon context. So how do leaders figure out the right structure for them?
For decades, the most common answer has involved a planned or strategic approach. Indeed, in my former life as a management consultant, I used to lead projects that involved redesigning organizations to better “fit” with the environment that had changed around them.
However, we now live in an era of cheap experimentation and quick iterations. Whether it’s a presidential campaign or the Amazon website, best-in-class products now involve more so-called “a/b” testing rather than “strategic” plan-first, execute-later initiatives. The iterative framework outlined by Eric Ries in The Lean Startup has taken our innovation-focused economy by storm, and is now a popular tool used by organizations to learn quickly from failures through continuous experimentation and adaptation. That might be the future of innovation in organizational structure too.
So, what does it mean to run an experiment on your organizational structure?
A few big-scale, path-blazing efforts stand out in the press, including Tony Hsieh’s adoption of Holacracy at Zappos (and Medium’s post-Holacracy experimentation). But there are many smaller, behind-the-scene experiments going on as well.
As more and more organizations forgo static “structure” for dynamic “structuring,” experiments are becoming more common. But many organizations are struggling with how to do this kind of experimentation well, if at all.
We’d like to help.
Inspired by these examples and the enormity of the challenges organizations face, my colleagues and I have decided to lend a hand to those who want to make rigorous experimentation on organizational structure a leadership competency. As academics, experiments are a core tool in our toolkit — and we think putting that tool directly in the hands of executives and managers might help them get more traction on these problems. We recently launched the Harvard Business School Organization Lab (o-lab), to prepare companies for a challenging future by bringing rapid and rigorous experimentation to organizational structure.
We are asking: How might we help you experiment with the next iteration of your organizations?
We don’t want to just talk about this. We want to make this part of our own experiment to empower a community of leaders to take real action. We’re working with the Harvard Business School Digital Initiative and HBX Live, the School’s new virtual classroom, to help you develop an organizational experiment that might make your organization more engaged, more adaptable, more profitable.
The challenge begins now on the Harvard Business School Open Forum, where we invite you to share a business problem that is difficult to solve at scale using your current structure — a thorn in the side of your organization that structure should, but isn’t, helping to address. Whether that problem is developing new capabilities, collaborating effectively, accessing talent quickly, or another domain altogether, we ask that you share a short description of that problem, the role that your organizational structure plays in it, and why it’s difficult to overcome.
As the community submits problems, we’ll work together to examine experiments that are being done at other organizations and in other disciplines to address similar issues.
Then, on March 30, Professor Clayton Christensen and I will run an HBX Live event focused on how to create an organizational design experiment to test your ideas for the next iteration of your company.
After the event, you will have 2–3 weeks to submit your experiment ideas. The community will then refine, evaluate, and (hopefully!) conduct these experiments.
Can we count you in?
This challenge itself is an experiment: we believe in generating ideas from the crowd and are exploring ways to encourage action and experimentation beyond ideas. We hope to inspire individuals, teams, and organizations to execute experiments of any type, whether it be an incremental change or radical redesign, in a rigorous way that permits learning and real progress for organizations everywhere.
