“What’s the one thing you’d change about the world of work?” This is the question that we at Intelligent Management were invited by LinkedIn to answer by writing a post. For us, transforming the world of work is THE challenge that companies face today and we have dedicated the last decade to finding a viable and practical answer.
A couple of years ago, we quoted in a post the Chief Human Resources Officer of Unilever, Leena Nair, who talked about “an increasingly borderless workforce”. Now that we are living with the implications of COVID-19, we also have an increasingly remote workforce. This has been an abrupt change and most companies do not have clear ideas about how to transition to a better way of working. The truth is, this shift is long overdue. Companies are every day hampered in their ability to express the full potential of the resources, human and otherwise, that they have available. At the same time, digitization is pushing them to “transform” without clarity on how this is going to benefit all the stakeholders.
So what is the one thing we would change about the world of work? Our answer is, the organization, in other words, how we build and manage all the interactions in a company towards achieving the goal. This is not an effort for the faint hearted; it requires continuous and relentless access to management science, management philosophy and a practical method and tools. On the other hand, what is the alternative? How could we possibly imagine that, given the level of complexity we face today, we can effectively combine people’s energies, physical, intellectual and emotional, and harness them towards a goal, without a massive rethink? It would be like asking a pilot to fly at night based on intuition and experience instead of the all-necessary instruments that make night-flight possible and safe.
How can we establish a new kind of order that prevents chaos while freeing up all the human potential in an evolved way that was not conceived for 19th century industry? How can we create a work experience that builds human involvement in a way that ensures Quality and speed of flow?
We had to ask some fundamental questions to reach transformational answers.
Question 1: What is keeping companies stuck in a traditional/hierarchical mode of operating?
We have to understand why companies are still largely offering and using piecemeal solutions that inevitably lead to unnecessary cost, waste and sub-optimization of all the resources involved.
We came to realize that there are three major assumptions (or mental models) that prevent organizations from moving beyond a traditional, fragmented way of working. They are:
· A hierarchy can only be vertical
· Control has to be exercised equally over all components of the organization
· The global optimum is equal to the sum of the local optima
We were able to challenging these assumptions by asking another question:
Question 2: At the most fundamental level, what is an organization and what does it do?
We came to acknowledge that, at its most fundamental level, an organization is:
a) A network of value
b) Part of a larger network of value
What it does is essentially:
· Repetitive processes
· One-off projects
It became clear to us that the focus of any organization has to become throughput, the pace at which the organization generates cash through sales. (For non-profit organizations, throughput can be defined as the pace at which the organization generates units of its goal.) Once it is clear that the focus must become throughput, then the attention shifts to:
Quality of products and services
Flow of material, information and cash
Involvement of people: commitment to the goal generated by personal and professional alignment with the goal/ value system of the organization
And this brings us to –
Question 3: How do we do we design interactions and interdependencies for the future of work
We need a framework and a map to transition a company from a traditional hierarchical/functional way of operating towards a whole system built for speed of flow. For this, we developed the Decalogue methodology – ten steps for transformation based on a systems science understanding that every organization has a constraint and that all its processes are affected by variation that it must understand and manage.
Once we saw that the basic constituents of work are repetitive processes and one-off projects, a new realization emerged: whether we seek to improve the speed at which we develop and manufacture new products, install new equipment, organize shipments, or file quarterly closing, we need the coordinated and synchronized efforts of many different competencies. We can manage these competencies effectively through a complex, strongly interconnected and synchronized Network of (processes and) Projects. This is how we harness all the energies present towards the goal. The question then becomes, how in a practical sense?
Question 4: How, in a practical and operational way, do you operate and manage a Network of Projects?
We realized that Critical Chain, the systemic method for Project Management developed by Dr. Eliyahu Goldratt, could become the engine for deploying the Network of Projects organization. It provides the practical method for coordinating and synchronizing competencies and an intrinsic control mechanism in the Project Buffers. When we apply a Control Chart to buffer consumption, we can gain statistical understanding in real time of how any project is progressing.
Existing software for Critical Chain were not sufficient for this purpose because they schedule resources, not competencies, multi-single projects, not multi-projects in parallel with available competencies, and they do not measure project buffer consumption statistically, hence engendering a specs-based worldview as opposed to a process behaviour view. This prompted us to develop our digital platform Ess3ntial as a practical support for organizational transformation.
Once again, we went back to asking a fundamental question: What is Critical Chain and how can it support an organizational transformation?
This led us to yearlong conversations with mathematicians and computer scientists to generate the algorithm for Ess3ntial. A team of talented software developers were then able to write the code and design the interface. We built our digital platform from the math up to provide companies with an operational support where they can create a database of competencies, build their project networks and manage several projects in parallel from a finite (available) set of competencies.
What does the Network of Projects organization look like? Instead of company functions, there are networks of projects; instead of heads of functions, there are managers of increasingly complex projects that draw their resources from a pool of available competencies with no resource contention; instead of executives that fight for power, there is collaborative work that is in synch with the goal of the company. Instead of often-conflicting local indicators of performance, there is one single driver for everybody. An organization as a network is part of a network of networks. This realization, and the shift in mindset it requires, open up new opportunities and possibilities beyond individual companies for collaboration along entire supply chains.
But how do we lead in this new scenario?
Question 5: How do we exercise leadership in a Network of Projects?
A systemic solution for managing an organization creates a radically simpler job for leadership in terms of focus. Instead of trying to focus on all the various parts as separate pieces, their efforts can be concentrated on the constraint and on the project buffers that indicate exactly how projects are progressing. Less simple is the change in mindset and the leadership skills required to manage an organization as a network in a complex world. The basics for this new style of leadership (none of which are currently taught in business schools) would be:
· a systemic understanding of organizations and the interdependencies they are part of (complexity)
· ability to base decisions on understanding variation
· ability to bases decisions on systemic, throughput-based measurements
· ability to give clear instructions
· ability to empower staff operationally by aligning responsibility with authority
· Ability to manage conflicts systemically
· Ability to frame situations systemically to develop breakthrough solutions
All of these abilities can be learned and improved through using the systemic Thinking Processes from the Theory of Constraints.
In conclusion, we believe the Future of Work is already here. Conversations for Change are no longer adequate, a Transformation is required from Silos to Systems. It’s time for decision makers in companies to take action and shift towards a better way. We all stand to benefit.
In this video, Dr. Domenico Lepore presents a new kind of organization in a Closing Keynote. https://vimeo.com/297270186
Intelligent Management has been guiding organizations to adopt a systemic approach to manage complexity and radically improve performance and growth for over 20 years through our Decalogue management methodology. The Network of Projects organization design we developed is supported by our Ess3ntial software for multi-project finite scheduling based on the Critical Chain algorithm. See our latest books Moving the Chains: An Operational Solution for Embracing Complexity in the Digital Age by our Founder Dr. Domenico Lepore, The Human Constraint – a digital business novel that has sold in 42 countries so far by Dr. Angela Montgomery and ‘Quality, Involvement, Flow: The Systemic Organization’ from CRC Press, New York by Dr. Domenico Lepore, Dr. .Angela Montgomery and Dr. Giovanni Siepe