The challenges facing organizations today are rapid, complex and unknown. They struggle to read the stimuli, absorb them and react within a timeframe that is now necessary. That is because their design and leadership model is still rooted in an outdated, mechanical understanding of reality. How can organizations adapt?
The hierarchical functional model is failing
Most organizations are built with a hierarchical and functional model, divided up into business units (silos). Each ‘department’ becomes its own power centre with its own goals and measurements that it then reports up the chain of command. In other words, these ‘parts’ are working to local optima and not the goal of the organization. Moreover, individuals are measured and rewarded as individuals and therefore behave accordingly. Once again, people work to their own local optima, even if they genuinely care about the good of the organization.
Knee jerks and wrong investments instead of working with speed and flow
This kind of organizational structure and career pattern is not geared for speed and rapid adaptation. There are too many separate cogs and wheels. It’s like expecting a giant mechanical elephant to compete in a relay race.
Moreover, this structure and mindset will lead to investments being made (hiring, acquisitions etc.) to try and tackle problems that only a radical rethink of the organizational model can handle. What is required is a model that enhances and builds systemic knowledge while optimizing flow.
It’s not just about flattening organizations. There are plenty of feel good alternative solutions out there. But when these solutions are not based on real knowledge and method they quickly show their weaknesses. Radically rethinking the hierarchical functional model doesn’t mean we have to throw away all the job titles. It can be achieved in motion by empowering people to carry out the series of customized solutions that redesign and redirect the efforts of the organization from the inside out.
Helping organizations adapt through the network of projects
The network of projects solution is based on robustly challenging the predominant mental models that support the hierarchical/functional model. Once you have established what the driving needs are behind that model it is possible to create a new model that protects those needs while abandoning what no longer works. What replaces the old model is an understanding of what the work of an organization really is in its essence – a network of projects that are synchronized to achieve the goal of the organization while continuously improving and innovating.
A new kind of organization for speed built as a network of projects will have much less need of bean counters and a critical need for systemic Project Managers and savvy CIOs to provide the technological thinking to support an advanced organizational structure.
Speed, adaptation and innovation all require an ability to think, plan and act systemically in a feedback cycle that can be strengthened through the use of the Thinking Process tools from the Theory of Constraints.
It is the science of systems, networks, constraints and complexity applied.
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About the Author
Angela Montgomery Ph.D. is Partner and Co-founder of Intelligent Management, founded by Dr. Domenico Lepore. She is co-author with Dr. Domenico Lepore and Dr. Giovanni Siepe of ‘Quality, Involvement, Flow: The Systemic Organization’ from CRC Press, New York. Angela’s new business novel+ website The Human Constraint looks at how the Deming approach and the Theory of Constraints can create the organization of the future, based on collaboration, network and social innovation.