What is the value of formal organisational structures?

When we talk of organisations we are naturally drawn to organisational structures. When we arrive at a new organisation we want to see the org chart, we want to know "who's who in the zoo", what does the power structure look like. It nearly always looks like a tree reflectng how organisational authority is promulgated throughout the organisation....or is it? ... or more accurately is it still? JB Quinn in his book on the Intelligent Enterpise http://books.google.com.au/books?id=tyOvBIA3WosC&dq=Intelligent+Enterprise&ei=eRbcSNPaGY-4swPhi-TeDg talks about the inverted organisation, more suited to today's services economy, as oppposed to the traditional industrial model. In the inverted model it is the front line customer facing staff that are seen to hold the power for impacting the organisation's fortunes, with the management providing support more so than control.

I am currently reading Meg Wheatley's "Leadership and the New Science" http://books.google.com.au/books?id=Bu_HAAAACAAJ&dq=leadership+and+the+new+science&ei=dhfcSOntFIPstAPMiKC0CA . I was first exposed to her work about a decade ago when introduced to the "above and below the green line" thinking. Basically Wheatley continues to challenge the "machine" thinking that continues to pervade our thinking. The traditional hierarchy is a "divide and conquer" approach to dealing with complexity. Her numerous examples from science and nature shows us why the approach is becoming increasingly ineffective. Executives love to play around with the structure. A new merger, acquisition, regulatory change, divestment etc.. is met with a frantic executive focus on "re-organising". For those not directly involved "business as usual" becomes a challenge. Its nearly like "lets put everything on hold while they work out what they are doing upstairs".

So why is it so hard? In my view organisational structures are being seen as THE tool for effecting organisational change. If we get it right then behaviours will be aligned and everything will be sweet. Of course the more we play that card the less effective it becomes .... "if you don't like the new structure, just hang around for a month or so....it will change again!". More importantly though the reason we see such churning and continuous restructuring, fine tuning etc...is that there IS NO PERFECT FORMAL STRUCTURE. As Wheatley reports, even if there were and the machine worked perfectly, we are in effect dooming ourselves to atrophy, no innovation, no growth, no job satispaction, no challenge, no development etc....

So how about this..... we accept that formal structures are best used for efficiency reasons. We do our business process maps, we know where the communication critical parts are and we cluster units involved to be organisationally 'close'. We don't worry about personalities, we don't consider could Jill work with Frank etc..We are only concerned with efficiency. We are just building the 'machine' and all the parts are just undifferentiated machine parts. Now you will all be saying .... well that won't work! People aren't just machines! and of course you are right, so now we have to de-emphasise the importance of the formal structure. It should no longer reflect the power structure or even who is more important. It becomes like the "terms and conditions" attached to product use. We know its there, we know we have to agree to it before we get to use the product, but what we are really interested in is the product itself. So having browsed the formal hierarchy now we want to know how things really get done around here! Where are the informal networks? Who do I need to influence to get stuff done? This is where the real "effectiveness" lies. The hidden structure can form an impenetrable 'immune system' for change or alternatively a 'happy virus' where positive change rapidly pervades the organisation. You just have to know how to work the network.

"Use formal structure for efficiency, but networks for effectiveness"

Food for thought..... You come to work in the morning, you have two e-mails from your CEO in your In-tray. The first is a message to all staff crafted with the assistance of the corporate communications department. The second is a link to the CEO's personal Blog. Which one do you open first?

Visit from Norman Lewis

Fellow speaker from the Enterpise 2.0 conference in Varese Italy http://enterprise2forum.it/cms/pages/home-en.php?lang=EN Norman Lewis, was in Australia for his nephew's wedding, called in yesterday morning with his wife Sheila. As well as a social visit he and Sheila were interested in how we could apply SNA to a local government opportunity. Norman and Sheila live in the UK and were talking about how local councils get graded now and the ones who are graded as excellent are given permission to sell their services outside their own organisations. The application we started to focus on was the complex social network that exists between government agencies and their NGO partners, especially in the social services space. I had applied some value network analysis to an aged care application a number of years ago and discovered just how important the personal relationships were. Would a service around stakeholder engagement in local council be valued? I expect the answer is yes. What would such a service look like? I expect it would look like a consulting service supported by a suite of tools and techniques like Optimice's partnership scorecard http://www.partnershipscorecard.com/ and some ONA stakeholder assessment tools, but packaged as a local council offering, including all the contextual material to make it attractive to other councils. We could include all sorts of benchmarking performance data etc..

Any takers?

Deloitte Paper on Value Network Alliances

I came across this recent paper fro Deloitte http://www.deloitte.com/dtt/article/0,1002,sid%253D108577%2526cid%253D188842,00.html on strategies for alliance partnerships. It provides a good background to the issues and a strategy-formation-management framework. As with many consulting pieces though it does a great job of identifying the issues, reviewing the current thinking but is a little light on or too high level at the action end. The governance advice really came down to a discussion on shared equity and formal and informal structures but not much depth there at all.

However to be fair it does a good job of awareness raising starting with some data like alliances up 25%/year, value up to 30% of revenue, failure rate 60-70%....should be enough to get any business executive's attention .... we just need to have some good answers!

Australian Innovation Report plugs social networking

The long awaited report on a review of Australia's innovation systems was recently released
http://www.innovation.gov.au/innovationreview/Pages/home.aspx. The report was somewhat damning on the previous Liberal government showing data on how Australia's innovation capability had been systematically eroded over the decade or more that they were in power. As far as networks were concerned the report gave a plug to social networking and web 2.0 and even suggested some experimentation by government agencies. I know many public servants who are 'closet' social networkers but when it comes to work, the cultural barriers are fierce. However, I applaud the reports authors for having a go and lets see what happens...

The hidden hand of Government: Fall of the NSW Premier

All the news yesterday was about NSW Premier Morris Iemma's forced resignation. The build up to his eventual resignation it seems was some heavy lobbying (networking) on his part to try and win support for some of the radical changes we was looking to make to his front bench. So much for authoritarian rules...what happened to "I'm the boss, I make the decsions, I live by the consequences". I guess the Iemma example is just another example of "authoritarian no longer rules". So even when you are the boss you also have to be an astute networker, building the coalitions behind what you want to do. Life was no doubt a lot more simple when what the boss says goes....but I can't see this situation returning now.

So if you were the new Premier and you wanted to keep a tap on how your 'network' was doing wouldn't you love to be able to "net mine" the emails, text message, phone calls of your cabinet. You wouldn't even need to see the content, just the contact information would probably be sufficient. I recall seeing some data on the e-mail mining of the Enron e-mail store shortly before it collapsed. From memory the emails were shorter and much more frequent. I expect you would have seen the same thing if you were able to mine Morris Iemma's e-mail over the past week!