We look at hierarchy and how to change it as we continue our series on creating the no-fear environment for the 21st century organization for post-digital workers and managers in response to our invitation from ‘No Fear’ author Pekka Viljakainen.
In order to create an organization that combines the two most fundamental elements of a successful system, we must:
1. understand the system we are operating and its intrinsic variation (Deming)
2. provide a synchronization and protection mechanism that enables its effective management (Goldratt).
We manage variation through Statistical Process Control. Once we have achieved statistical predictability in our processes, we need to synchronize them and protect them from disruption. This can be done most effectively by identifying the constraint of the system, i.e. the element in the system that determines the pace at which the system generates units of the goal. Goldratt’s fundamental insight was to understand that we can manage a system by focusing on the constraint, i.e. subordinating the other processes of the system to it to ensure it works to the maximum. We protect the constraint from the impact of variation affecting the other processes by placing a buffer before it. The entire system is scheduled around the constraint using a very precise finite capacity based algorithm.
All that matters: speed and reliability
All that matters, then, for the success of the organization and those who work within it is speed and reliability. Our goal, therefore, is to create and manage a systemic organization based on process predictability and high synchronization of these processes. The only way to achieve this is to have an organizational structure that is built for and consistent with that very purpose. It is a structure where:
- interdependencies are clearly laid out through detailed mapping of the processes within the organization
- variation is understood and managed through relentless application of statistical methods
- a physical constraint has been identified
- a subordination process (to the constraint) is created
- a buffer is placed in front of the constraint
The constraint dictates the performance of the entire organization, therefore a minute lost by the constraint is a minute lost by the whole system. The purpose of the buffer in front of the constraint is to absorb the cumulative variation generated by the system and to prevent this variation from generating disruption to the constraint.
Conventional structure vs. coherent structure
If we understand all this, how do we go about creating a coherent organizational design? How can we avoid the trap of conventional thinking and leverage our systemic intelligence, connecting intuition (birth of an idea), understanding (analysis and development) and knowledge (application/execution)? Is there an organizational structure that accommodates for these needs and provides a general template for the enactment of a truly systemic organization? How much are we willing to trade the largely and blatantly unsuitable yet mesmerizing security of a functional organization for something that can be utterly unconventional, dangerously challenging, but fully coherent with our needs?
An organization brings individuals with competencies together. By combining these competencies in a suitable manner we achieve the goal of the organization. In other words, individual efforts can lead to a global result if we devise a mechanism that creates orderly coherence in the combination of these efforts. A hierarchy should facilitate the creation of this order. Accordingly, it is not the hierarchy that we challenge but the kind of subordination that a traditional hierarchy calls for.
See also:
No Fear in the Workplace – Making It Happen
Drive Out Fear by Learning to Think Systemically
Don’t Climb, Grow! Success in the Systemic Organization
Start Making Sense: Introduction To Statistical Process Control
Sechel: Logic, Language and Tools to Manage Any Organization as a Network of Projects
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