Panel: The Future of the Organization

This is a wiki page for discussion of the future of the organization panel.

 

In the year 2000, acclaimed business futurist and consultant Peter Drucker commented that the corporation as we know it would not survive the next 20 years.  Specifically, he noted that it would need to fundamentally change structurally and economically.  By implication, many of the organizations we know today do not have the necessary attributes to cope with the world of tomorrow.

To survive, organizations must embrace new ways of managing people and resources and take advantage of new opportunities available through technology.  Increasing complexity and volatility drives this future.  Problems like unstable markets and currencies, political and social clashes and terrorist strikes, and fundamental questions about economic models and consumer values make organizational futures uncertain and planning and management increasingly difficult.  Emergent solutions suggest that in some contexts, distributed, loose networks of individuals may work together to accomplish tasks only large corporations could accomplish in the past.  Think of the open-source Linux operating system versus Microsoft Windows or the 911 terror strike versus a large coordinated military campaign in a foreign land.  Does this indicate that corporations will not be necessary in the future?  What will their role be if not controller of resources, process and goals?  What skills will they need?

Panelists

Benn Konsynski [moderator] (Professor at Goizueta; noted author, long-time advocate for organizational innovation and researcher on how to make it happen)

Steve Delgrosso (Director of the Center for Project Management Excellence at IBM; former Director for IBM Healthcare US Division, board member at PMI)

David Bennet (Founder of the Mountain Quest Institute; noted author, strategist for the US Navy)

John Houseal (Deloitte Consulting; Senior Manager with experience in various global health projects including one developing global standards for assessing pandemic response capabilities)

Mark White (Centers for Disease Control; founder of global network of public health professionals; in charge of document clearance at CDC).

Comments

Sources relevant to the panel on The Future of the Organization

  1. The Agile Organization - A Meeting at The Mountain Quest Institute (video)
  2. Prophets of Doom (video)
  3. Davos 2010 - IdeasLab with MIT - Malone (video)
  4. Structure in Social Networks - Christakis (video)
  5. Empathic Civilization - Rifkin (video)
  6. Dilemmas in a General Theory of Planning (Wicked Problems) - Rittel and Webber
  7. Public Administration in a World of Complex Markets and Complex Organizations - Herbert Simon (video)
  8. A Real-Time Revolution in Routines - Sabel
  9. The Digital Disruption: Connectivity and the Diffusion of Power - Eric Schmidt and Jared Cohen
  10. Trust in Society - Cook
  11. The Tipping Point: How Little Things Can Make a Big Difference - Gladwell
  12. Pragmatic Collaborations: Advancing Knowledge While Controlling Opportunism - Helper, MacDuffie, Sabel
  13. Briading: The Interaction of Formal and Informal Contracting in Theory, Practice, and Doctrine - Gilson, Sabel, Scott
  14. Information Exchange and the Robustness of Organizational Networks - Dodds, Watts, Sabel
  15. Pragmatic Collaborations in Practice: A Response toHerrigel and Whitford and Zeitlin - Sabel
  16. Contracting for Innovation: Vertical Disintegration and Interfirm Collaboration - Gilson, Sabel, Scott
  17. Neither Modularity Nor Relational Contracting: Interfirm Collaboration in the New Economy - Sabel, Zeitlin
  18. Diversity, Not Specialization: The Ties that Bind the (New) Industrial District - Sabel
  19. Science, Strategy, and War - The Strategic Theory of John Boyd - Osinga
  20. Swarming & The Future of Conflict - Arquilla and Ronfeldt
  21. Beckstrom's Law - What is the value of a network? - Department of Homeland Security
  22. The new dynamics of strategy: Sense-making in a complex and complicated world - Kurtz and Snowden
  23. ICAS: The Intelligent Complex Adaptive System - A. Bennet and D. Bennet
  24. Associative Patterning: The Unconscious Life of an Organization - A. Bennet and D. Bennet
  25. A Leader's Framework for Decision Making - Snowden and Boone
  26. Becoming More Agile and Adaptive: Global Trends 2015 - Bray
  27. Power to the Edge - Alberts and Hayes
  28. The Agile Organization: From Informal Networks to Complex Effects and Agility - Atkinson and Moffat
  29. Adaptive Use of Networks to Generate an Adaptive Task Force - Grisogono and Spaans
  30. Engendering Flexibility in Defence Forces - Unewisse and Grisogono
  31. Networks, Crowds, and Markets: Reasoning About a Highly Connected World - Easley and Kleinberg
  32. Information Age Organizations, Dynamics, and Performance - Mendelson and Pillai
  33. Strategy and Cognition: Understanding the Role of Management Knowledge Structures, Organizational Memory and Information Overload - Sparrow
  34. In Athena's Camp: Preparing for Conflict in the Information Age - Arquilla and Rondfeldt
  35. The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style, and Your Life - Malone

    More source material

    James G. March

    1.     A Primer on Decision Making

    2.     Democratic Governance

    3.     Pursuit of Organizational Intelligence

     

    Herbert A. Simon

    1.     Administrative Behavior

    2.     The Sciences of the Artificial

     

    Lawrence L. Lessing

    1.     Code and Other Laws of Cyberspace

    2.     The Future of Ideas

    India

    India is a country experiencing explosive growth and competing in global markets characterized by intense rivalry, frequent new entrants, multiplicity of substitutes, and high customer power. The Indian business environment is both complex and volatile, which creates uncertainty, demands agility, and precludes certain kinds of business while fomenting others. India is the leading country for offshore outsourcing. The offshore outsourcing industry started in India and it has been able to grow the IT and BPO export sector to $47 billion and capture more than half the offshore outsourcing industry. Would you agree this is a case of India facing wicked problems with new organizational forms that span traditional corporate and agency boundaries to enable agility?

    Egypt

    Facebook and Twitter ignited a revolution in Egypt that unseated the King in days. Online networks combined with offline networks, multiplying effects past a tipping point. The result was asymmetric, the change categorical, and the precedent irreversible. The agility of the masses exceeded the agility of the regime.

    I'm not sure you can claim

    I'm not sure you can claim the fall of the Egyptian regime was due to Facebook and Twitter.  For a deeper analysis (which is leaning in that direction), there is an article in the Jan/Feb issue of Foreign affairs by Clay Shirky:  The Political Power of Social Media.

    When looking at situations like those in the Middle East presently, the Internet does play a role, but perhaps it is just another factor in the Wicked Problem described in one of the other references.  

     

    Yes

    Kevin, I'm sure you are right. Guilty as charged for posting to spark discussion. Yet the phenomenon was like wildfire or virus proliferation. If you are suggesting that the larger strategic structure of the system is the correct level of analysis, I would agree. Yet the mechanism is surely networks. I have not read yet the article you've recommended, but I am most interested to hear your thoughts, especially given the fact that your own organization is equally invested in anticipating and reacting with agility to humanitarian crises that erupt out of such phenomena.

    Wicked Problems

    Kevin, the paper you referenced is Dilemmas in a General Theory of Planning (Wicked Problems) - Rittel and Webber.

    Everyone should read this.

    John

    The Law of Requisite Variety (Ashby's Law)

     The Law of Requisite Variety: the larger the variety of actions available to a control system, the larger the variety of perturbations it is able to compensate.

    Variety (heterogeneity, diversity) is necessary for agility.

    The concept has implications for strategic planning and execution in future organizations. Over the past decade, strategic planning has become less the top-down visionary foretelling of what the organization wishes the future to look like, and more akin to bottom-up, emergent, just-in-time resource allocation. Wherever one lands in the long-standing debate between Herb Simon and Henry Mintzberg over the degree to which organizations are rational, most would agree that more resilience must be built into our planning systems, as in portfolio management approaches that design multiple pathways to success, e.g. WWII convoys. Likewise strategy execution will require increasing complexity in organizational forms and structures, e.g. federation. Also implied is a need to unlock specialization through process networks (not production lines), trading tightly coupled processes for loosely coopled ones.

    Agree, disagree?

    Japan

    The devestation in Japan following the 9.0-magnitude earthquake and tsunami and the mobilization of a response has thrown the agility imperative into sharp relief as thousands of people struggle to cope in the wake of after-shocks and the meltdown of nuclear power plants. While Black Swans like this may be rare, limits to our prediction capability and the scale of the impact compel us to understand how to become more robust, resilient, responsive, flexible, innovative and adaptive. I am reminded of the earthquake that rocked Haiti. When that happened, my firm OPM Experts and our partner EBR articulated the following to leaders of the relief effort.

    Responses to disasters such as this have three phases:

    -   Phase 1:  Immediate disaster response.  Phase 1 occurs immediately after the occurrence of the disaster event, and has emphasis of emergency response activities such as saving lives; rescuing disaster victims in imminent danger; and getting emergency food, water and shelter to survivors.  Time is of the absolute essence in Phase 1.

    -   Phase 2:  Disaster relief.  Phase 1 efforts will begin to transition to Phase 2 when the immediate danger has passed and activities turn to dealing with victims and refugees from the disaster.  Phase 2 involves managing sometimes large displaced populations, identifying temporary shelter, and making mid-term provisions for food, water, medical treatment and other necessities (e.g., sanitation activities to avoid or mitigate the spread of disease).  Cleanup activities begin in Phase 2, but only to enable disaster relief.

    -   Phase 3:  Reconstruction.  Phase 3 involves the long-term efforts associated with restoration of society after the disaster, including, as necessary, restoration of political, economic, physical, and information infrastructures. 

    These phases are linked, and there is overlap between the phases.

    One key enabler of effective response to the earthquake is the availability of descriptive and prescriptive tools and frameworks that allow decision makers and organizers to characterize the current state of response efforts across the full range of the situation.

    In the short term, one of the most difficult tasks (in addition to the response activities themselves) is assembling an accurate assessment of what is actually going on in the response space.  What is the status of the effort?  Who is involved?  Where are they?  What are they doing?  What problems are being experienced?  Collecting, organizing, and distributing this information all pose serious problems.  In many cases, the information is available, but not structured and difficult to assemble or understand.  In the current situation, news reports and, particularly, emerging media (e.g., social networking sites, Twitter, etc.) and other open-source data sources are playing roles in getting information out about elements of the situation – but these diverse and unstructured sources are particularly difficult to rationalize into a coherent picture. There is a need for shared situational awareness and facilitation of the discovery of challenges (e.g., hospital A is out of antibiotics) and solution alternatives (e.g., organizations/individuals who can help with hospital A’s problem).

    In Phases 2 and 3, response organizations have more of an opportunity to design and/or grow the relief and reconstruction efforts – especially in Phase 3, which is usually the result of a deliberate planning effort.  That said, these phases can be extremely challenging due to the scale and diversity of partners involved (and the range of agenda/visions/missions that are present), the complexity and interrelatedness of the relief/reconstruction activities, and the lack of a unified “chain of command” among the participants.  How do military organizations, which usually have the resources and sealift/engineering/logistics capabilities to respond to large scale disasters such as the Haitian earthquake, work with groups such as the Red Cross, Doctors without Borders and those motivated individuals who show up in country wanting to help?  In addition to these complexity challenges, uncertainty – whether from an inability to gather and/or distribute information or from the rapid pace of change in the situation – places a premium on the ability to manage/influence the response effort (what we would call a complex endeavor) in agile ways.  This agility is needed to place decision making at appropriate times and organizational locations, enable interaction and collaboration among participants in the endeavor, and ensure information is distributed in ways that create shared awareness of the situation.

    Frameworks

    Two relevant frameworks for assessing and developing agility are described here: http://www.opmexperts.com/nato_opm3.html

    Dr. Herbert Simon presenting the John Gaus Lecture in 2000

    See http://www.opmexperts.com/herbertsimon_johngaus_2000.html

    This video captures Dr. Herbert Simon presenting the John Gaus Lecture at the annual meeting of the American Political Science Association in 2000. He talked about the role of public administration in today's world of markets and organizations, the mechanisms that make complex organizations effective instruments for carrying out human purposes, and the kinds of organization structures that facilitate change and innovation. He emphasized the limitation of thinking power of human actors in a global economic environment where uncertainty has called into question the usefulness of optimization problems to improve the performance of complex organization structures. In addition to examining markets and organizations respectively, he examined boundaries between the two, characterizing mutual inter-dependency (and Adam Smith's invisible hand), and the problem of coordination especially in situations that require us to secure coordination without obvious central planning, without a common interest among the participants, and where third order effects (externalities) increase complexity. He emphasized the role of contracts and so-called "temporary organizations." Project-based organizations?

    Corporations have become the principal coordinators of tasks that serve society. The vast bulk of our economy occurs through organizations, not markets. Ours is an "organization economy," whose transformation has been concomitant with the evolution of electronics and communication technologies. The "world wide web" and e-markets provide unprecedented opportunities for "coordination at a distance." The fact of this technology medium does not suggest the dissolution of organizations.

    Coordination is not a good but a necessity. It is costly and imperfect. We wish to introduce no more of it than the structuring intricacies of our goals calls for. Organization design balances the gains from coordination against its cost, against each person not being able to do their own thing. The first step in designing an effective organization is to determine what kinds of inter-dependencies in activities will benefit from coordination and then to minimize the amount of coordination by dividing the work in to pieces so each sub-part of the organization can be as independent in its activities of the others as possible. There is much more coordination and interaction within each unit than between units in a well designed  organization. High rates of rapid communication are maintained among activities that are highly interdependent; much less frequent communication among activities that can be carried on in near inter-dependence. We call systems like this nearly decomposable.

    A second component of good organizational design is the special contracts between the organization and its participants. One must not underestimate the role of employee contracts (and stock and bond contracts for contribution of capital and sales contracts for buyers). Employee contracts buy participation of employees. More than economic motives, once installed in the organization the employees are surrounded by information and influences quite different from those that would surround them in another setting, inducing strong identification, not only motivational but also cognitive (with the organization and its goals).

    It is the mechanism of organizational identification, the change that takes place in each one of us, when we become the employee of an organization and learn the culture - this was missed by Adam Smith when he concluded that large organizations cannot be efficient. Organization identification is powerful, rooted in values and the need to build a mental model of the world that focuses on one's own responsibilities and work environment. This is distinct from self-interest. Organization identification gives organizations more than anything else their remarkable power to secure coordinated behavior of large numbers of people to achieve goals. It also regrettably causes some people identified with particular groups to commit terrible atrocities against others. It is a mistake to separate organizational identification and ethnic identification, and we should see the role of organizational identification in human affairs generally and what changes need to take place before it ceases to have regrettable consequences.

    Innovation and adaptation to change, complexity, and complex systems have drawn attention to the fact that most complex systems seen in the world are nearly decomposable systems; they have range and levels, hierarchies in authority and division of work, and each lower level is subsumed to one above. Why is this so universal in both organic and inorganic systems? Near decomposability is a means of securing the benefits of coordination while holding down its costs. So to design complex systems to operate efficiently, we must divide them with their components as cleanly separated as possible. Nearly decomposable systems of parts with near interdependence will adapt to changing environments and gain in fitness more rapidly than systems without this property. The rates of success depend on the degree of dependence and coordination among teams who can operate independently to solve the problem of adaptive change without central coordination in a changing environment.

    If complex systems must operate in constantly changing environments, they must modify their structures at a corresponding pace. We must limit what we can pay for coordination; we must enable separate parts in a system to evolve independently. With our increasing understanding of building large organizations (large groups of people who collaborate) that achieve high levels of coordination while maintaining a sufficient approximation of near decomposability of their components, we have enlarged greatly the area in which large organizations are more effective than markets. This matters in order to cause distribution of power and distribution of social products.

     

    National Security Projections 2019

    See http://www.fc.bus.emory.edu/~dbray/2019.html

    Knowledge ecosystems.

    Augmented group cognition.

    Emerging virtual institutions.

    Harvard's Nicholas Christakis on Structure in Social Networks

    See the video of the interview at http://www.opmexperts.com/christakis.html

    An excerpt:

    "Networks magnify whatever they are seeded with, good or bad. They will magnify fascism. They will magnify germs. They will magnify sadness, but so too will they magnify love and altruism and smoking cessation and ideas. In fact, we just did some work that was just published a couple of weeks ago on…doing some experiments where we studied a kind of pay it forward phenomenon where we took random individuals and they played something called the Public Goods Game. And we found that if one person was kind to another person that person then went on to be kind to a total stranger and then that stranger in turn went on to be kind to yet another stranger, so we could see the signature of my kindness. If A is kind to B and B goes on to be kind to C and C goes on to be kind to D we can see in the interactions between C and D a signature of the interactions between individuals A and B, even though A never interacted with C or D, never saw C or D. So you have a kind of rippling through the network of this kind of pro-social positive kind of kind or behavior we found in these experiments that we did. So and actually interestingly that also spread to three degrees of separation like some of the observational work we’ve done with other phenomena. But here is the point: networks magnify whatever they are seeded with, good or bad, but on balance the reason human beings form social networks is that the benefits of a connected life outweigh the costs, and the magnification of good things outstrips the magnification of bad things. So even though our connection to others puts us at risk for instance of getting germs, it also puts us a risk for getting ideas."

    "It Takes a Network" by Stanley A. McChrystal

    http://www.foreignpolicy.com/articles/2011/02/22/it_takes_a_network
    BY STANLEY A. MCCHRYSTAL

    New article about Army KM lessons learned in Afghanistan and Iraq.