Michael Novak

Michael Novak

CEO

@michaelgarcianovak

Agile organizations know how to navigate these 4 tensions

Responsive organizations leave the old command and control paradigm behind, to engage their workers more effectively and understand their customers more deeply.

November 8, 2019 4 min read

The old structures, clear and distinct, that once organized the world are gone. The world has become a giant network where information is instantly accessible and shared. The future is rewritten faster than we can understand. This accelerated connectivity has created increased the rate of change. As a result, the future is increasingly difficult to predict.

Meanwhile, most organizations still rely forms of work designed over 100 years ago, for the challenges and opportunities of the industrial era. These structures can only accommodate routine and static work. High level managers push for efficiency and predictability, but at the expense of information flow, quick learning and adaptability. These priorities are no longer right.

Organizations with a better perspective, on the other hand, understand that this radical change is also reflected in the business landscape, and the concept of responsive organization is emerging as a solution. In this idea is the key to the survival of your organization the current climate of constant transformation.

Responsive organizations are designed to learn and react quickly through an open flow of information; to encourage experimentation and learning in rapid cycles; and to organize as a network of employees, customers and partners motivated by a shared purpose.

There is a reason why we have run organizations the way we have: Our old command and control operating model was suitable for complex, but predictable, challenges. Some of these challenges still exist today and can be faced with the industrial age practices that we know so well. However, as the pace of change accelerates, the challenges we face are becoming less predictable. Those practices that were so successful in the past are counterproductive in less predictable environments. Instead, responsive organizations are designed to thrive in less predictable environments by balancing different tensions:

  1. Profit v. Purpose. In the past, the goal for many organizations was to create economic value for shareholders or owners, often in the short term. Today people are looking for organizations that have a purpose beyond simply making money. Instead of seeing profits as the main objective of an organization, progressive leaders see profits as a byproduct of success. They aim to do well by doing good. A clear and visionary purpose brings together shining talents, committed shareholders, partners and communities.
  2. Control v. Autonomy. In the past, a limited number of people had the power and understanding necessary to lead the organization and its public image. Control was forced through centralized, top-down decision making. This makes sense in a world where a few select people are very likely to have the knowledge and experience necessary to make the best decisions. Now, that is no longer the case. Circumstances and markets change rapidly as information flows faster. Now people with the best discernment and decision making are usually the people closest to customers, on the front lines or even “outside” of typical organizational boundaries. Instead of controlling through process and hierarchy, businesses get better results by inspiring and empowering people on the margins to do the job as they see fit, strategically, structurally and tactically.
  3. Plans v. Experiments. Before, organizations competed optimizing productivity, efficiency and predictability through long-term planning. Relying on planning was important because high transaction costs made it difficult to change course once decisions had been made, resources had been committed and people and teams had been coordinated. Today, plans begin to lose their value as soon as they are devised. Because we cannot predict the future, time and resources devoted to planning are a less valuable investment than the adoption of agile methods that encourage experimentation and stimulate rapid learning. The opposite of planning does not have to be chaos. Receptive organizations still need a long-term vision, but they move forward through experimentation and iteration.
  4. Hierarchies v. Networks. There used to be large and complex tasks that required many people to work on them. Transaction costs involved in coordinating people were high, so the concept of a manager was introduced and, as the numbers increased, a manager for the managers, and then another layer, and so hierarchies were formed. A single primary connection was reinforced: manager to worker. The command and control leadership style was established, which was tremendously successful during the industrial era. Now, technology and connectivity have increased our capacity for self-organization, collaborating more easily through internal and external organizational boundaries. It is no longer necessarily true that coordination through an administrator is more effective than self-organization. Working as a network allows us to organize with many different types of connections and greater autonomy.

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Michael Novak

Michael Novak

CEO

@michaelgarcianovak

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Michael is an expert in innovation, education and entrepreneurship. As a consultant, your expertise is strategic innovation. He is CEO of Novak Innovation.