How Our Organizations Will Become Agile, Radically Decentralized, and Networked Sooner Than We Think
Business, markets and societies have changed, but the principles, methods and concepts of organizational leadership haven’t, by and large.
Rigid and erratic performance management processes like planning, budgeting, project management, fixed-target setting, rigid meeting agendas, individual employee appraisal, and so-called “pay for performance”-pay, combined with autocratic decision-making, org charts and micro-management from the top – these techniques from the industrial age are still widely established standards. But are they still adequate? And if not, how can we adapt our organizational models to the ever-changing environments of the information age and do things better?
In this session, you will learn how any organization, by moving beyond command and control, and by abolishing the entire mindset of management, of functional organization, planning and bureaucratic hierarchy, can become sustainably more successful and profitable. Niels Pflaeging shows how the transformation towards an organization model for the complexity of the knowledge economy really works and how people, teams and organizations can be unleashed from the burdens of bureaucracy – freed from management by command and control.
Attachments
Organize for Complexity (Slides)
Q&A Transcript
Jason Little: Hello this is Jason Little. I’m the co-chair for On Agile 2016. I’m here with Niels Pflaegin ready to take your questions. Our first question …
Niels Pflaegin: Hello Jason. Good to talk to you.
Jason Little: Hi Niels. Great to talk to you. Okay. Our first question is do you think doers try to get rid of the thinkers?
Niels Pflaegin: That’s a fun question to start with. Of course one of the paradoxes or dilemmas of command and control is that the doers are not actually just doers. They always want to think. People want to think. That’s one of the reasons why organizations today suffer so much, because they suppose doers who actually think and have to find ways around management rules and stupid bureaucracy.
I don’t think thinkers try to get rid of the … Doers try to get rid of the thinkers. I think that everyone should be a thinker in any organization, in every organization in the world. That’s not what we have. That’s the problem.
Jason Little: Great answer. Okay, our next question coming in. Are there any documented case studies how organizations have transformed from pyramid to peach?
Niels Pflaegin: Yes. Yes. There are a few companies that we know of that have transformed themselves from command and control or pyramid to de-centralized and peachy organizations. Maybe the most whopping case is that of Toyota. They transformed themselves in the 1950s and ’60s from a very traditional hierarchical bureaucratic structure to what they are now, or what they have become since the 1960s and ’70s. Toyota’s one of the best cases.
We have also the case of [inaudible 00:01:49]. A famous case, very well-documented. There are several books about it. About a smaller company, only a couple of hundred people from Brazil. They transformed int he 1980s. Then there is Hammer[inaudible 00:02:01], another great case from the 1970s. When they transformed they already had a couple of thousand people and transformed themselves. They now have 10,000 people.
Finally the fourth case I would mention is the [inaudible 00:02:14] retail company, a box store company with now 50,000 people. They transformed themselves at the beginning of the 1990s or twenty-five years ago when they had already I think 20,000 people. Transformation is possible. It has been done. That should suffice. There are a couple of cases and we of course, the challenge for us now here at this conference is how to add more companies to this list.
Jason Little: Excellent. Thank you. Our next question, how should we handle the human tendency of upper management to want to keep their current centralized power? People at the top of the pyramid often feel they’ve earned their positions based on being so much smarter than the workers. How can they be convinced to change and transform?
Niels Pflaegin: Yes. This is a great question. There is not good answer to it because the question is wrong already. I don’t want to insult anybody, but the question, it’s based on blaming. Let’s blame top management or managers for the wrongs that they supposedly have done. It’s only implicit in this question but I think somewhere behind the question is blaming.
That’s the most useless thing we can do. If we want to transform organizations, if we want to see organizations changing profoundly, we have to stop the blaming right now. With blaming, there is no way to transform an organization.
Let’s assume top managements have profited from command and control. Maybe that’s how they got where they are, but that doesn’t mean that they have an implicit interest in sustaining command and control. We have to restrain from the blaming and ask ourselves, okay, why our systems like this? No who has done it. We have to stop asking the who question in order to be able to transform.
Jason Little: Excellent. Thank you. Another one. With multiple autonomous teams, is there no need for any consistent guidelines or practices across the teams? Should there be no shared practices or guidelines?
Niels Pflaegin: Ah, that’s another great question. Yes. Of course there must be principles and shared norms or values. That’s what we need [inaudible 00:04:37]. In waterfall you don’t need shared values and principles. You just need project managers and steering committees and power at the top. In command and control, also, you only need bosses and power at the top. That’s it. You don’t need … You need rules that people have to obey to.
If we move beyond command and control to de-centralized networks then of course we need firm principles and they have to be controlled by literally everyone in the organization. That’s how network structures work. Of course. We need more principles, organizations and less bosses. It’s a great question.
Jason Little: Great. We have about 50 questions in total and we do have time for one more. What can individual contributors do to move towards the ideas you were talking about?
Niels Pflaegin: Ah yes. Great question, and I think maybe you would probably have a stance on that one as well, Jason. I firmly believe that we have to start transformation with helping people to think better, more effectively about organizations. In the session in this little talk that I gave here, I tried to present some of the crucial thinking models that are stationed between central and periphery, the distinction between the complicated and complex.
You need to help others to understand these crucial thinking tools. Otherwise transformation will not be possible. We cannot just … The blaming and the appealing to others, oh we should change, we should do better. That is not change methodology. That will never work. We have to help others think more accurately about what really happens in organizations. I think that’s the big challenge we all face today.
Jason Little: Definitely. We need to get rid of that should word. You also have a booth in the exhibit hall. Would you like to say a few words about that before we close the Q&A?
Niels Pflaegin: Exactly. I will walk into the virtual exhibit hall now and we can of course discuss all these questions there in the chat function, in the group chat or the individual chat. I’m looking forward to answering many, many questions if you like, there in the conference hall, in the booth that is called. [inaudible 00:06:56] network.
Jason Little: Great. Thanks very much for joining us. Your book has always been one of my favorites.
Niels Pflaegin: Your book is one of mine too. Thank you. See you later.
Jason Little: Okay.
Niels Pflaegin: Bye.
