In today’s fast-paced business environment, productivity is often seen as a pure numbers game—doing more in less time. However, within the context of an intentional organisation, productivity takes on a different meaning. It’s about deliberate alignment, where productivity is a measure of achieving meaningful, strategic outcomes aligned with the organisation’s purpose rather than maximizing output for its own sake. This redefined perspective helps create sustainable value for the organisation, its employees, and its customers.

Redefining Productivity: Purpose Over Output

In The Intentional Organisation, productivity is reframed to serve a larger purpose. This approach means looking beyond traditional measures like hours worked or tasks completed and focusing on what truly matters to the organization’s goals. Rather than an end in itself, productivity becomes a byproduct of intentional work that aligns with the organization's Value Creation patterns. When teams are clear on what’s essential, they naturally focus their energy on high-value activities, enhancing individual and organizational productivity.

Read again what I already wrote on Performance and Productivity

👉 Actionale Insight. Ensure that your productivity KPIs are not “inward” looking but are directly linked to the value creation you want to create for your customers. For example, if you have a Customer Service Call Center, focusing on call-handling time or first-call resolution metrics might lower your customers’ satisfaction level because the KPI may trigger inconsistent behaviours by employees. Ensure KPIs are balanced with customer satisfaction metrics, as this is the only way to ensure consistency and show that productivity is a tool to improve customer satisfaction.

Enabling Productivity Through Clarity and Empowerment

The foundation of intentional productivity is clarity—each team member understands their role and how their work impacts broader objectives. Clarity fosters empowerment, as employees who understand the purpose behind their tasks are more likely to take ownership and innovate.

👉 Actionale Insight. Make it a habit to communicate the “why” behind key initiatives and empower teams to make decisions that further the organization’s objectives. This not only improves productivity but also enhances engagement and motivation.

Streamlining for Intentional Productivity

The Intentional Organisation values simplicity. When workflows are needlessly complex or tools overwhelming, productivity suffers as irrelevant tasks, or redundancies bog down employees. A fundamental principle is to streamline processes and remove obstacles, allowing employees to focus on what truly adds value. Employees are empowered to remove obstacles either directly or through suggestions. A “zero waste” approach to productivity is declared and enacted in people’s behaviours.

👉 Actionale Insight. Conduct regular audits of processes and tools, eliminating those that don’t directly support value creation. This can involve leveraging technology to automate routine tasks, ensuring that time is reserved for work that requires human creativity and problem-solving, or investment in training and upskilling to ensure that automated tasks don’t cripple back into organisational routines.

The Role of Culture in Intentional Productivity

Culture is instrumental in fostering an environment where intentional productivity can thrive. In an intentional culture, employees feel psychologically safe to make mistakes, experiment, and grow, leading to better outcomes. Productivity isn’t about immediate gains but long-term value creation that’s consistent with the organization’s purpose.

👉 Actionale Insight. Promote a culture of continuous improvement rather than focusing solely on short-term results. Encourage open feedback, collaboration, and a willingness to learn from mistakes. A supportive culture will naturally drive productivity as employees are motivated to contribute meaningfully.

Measuring Intentional Productivity

Finally, measuring productivity within The Intentional Organisation goes beyond tracking output speed or efficiency. Instead, measurement frameworks are designed around value-added outcomes, customer satisfaction, and alignment with strategic goals. This might mean looking at qualitative feedback, team cohesion, or long-term impact rather than just immediate results.

👉 Actionale Insight. Develop KPIs that reflect the organization’s core intentions. For instance, instead of tracking time spent on tasks, measure the outcomes of completed projects, the quality of customer interactions, or the development of innovative solutions that contribute to the organizational purpose.

Conclusion: Intentional Productivity for Sustainable Impact

By reframing productivity within The Intentional Organisation, you can shift from simply doing more to doing what matters. This approach helps organizations build sustainable productivity that achieves short-term results and creates long-lasting value. Intentional productivity is a cornerstone of a more meaningful, engaged, and high-performing workplace.

What do you think?

Leave a comment

— Sergio

2. Site Updates

The Laws of Organization Design

I have continued publishing my articles on The Laws of Organization Design. Here is the latest articles published:

The Laws of Organisation Design

1. Metcalfe’s Law

2. The Law of Constraints

3. The Pareto Principle

More to come in the coming weeks!

— Sergio

3. The (un) Intentional Organisation 😁

Source: PHD Comics X

4. Keeping in Touch

Don’t hesitate to reach out by directly hitting “reply” to this newsletter or using my blog’s contact form. 

I welcome any feedback on this newsletter and the content of my articles. 

Find me also on:

• X (formerly Twitter)

• LinkedIn

• Instagram

• Medium

• Refind

• GoodReads

• Readwise

Last week, I started to address the question of the impact of not applying Intentional Design to the different elements of Organisation Design identified in the Organisation Evolution Framework. I covered the first four components (Business Model, Strategy, Operating Model, and Organisation Model), all through a lens of Consistency and Congruence, which I also recently wrote about.

In this issue, I will cover the remaining four elements of the OEF, the “soft” ones, and try to summarise the impacts. As with the first part, I wanted to reinforce two reminders: all the cases below are purely theoretical, as it is difficult to identify a sole element not designed with intention. Moreover, Congruence is a dynamic attribute that changes and evolves.

So, let’s see the four last elements in more detail.

1. Undefined Leadership: The Dissonant Organisation

What happens when we don’t intentionally design Leadership for our organisation?

Leadership is the attribute that defines intentionality in an organisation's design. Not explaining what Leadership means for our organisation means creating a vacuum that affects the entire system. I define this case as dissonance: the rest of the organisation's elements will probably develop through emergent chaotic processes without harmony and agreement.

Undefined leadership will affect how the organisation addresses change; people will all feel different levels of agency, and concepts like resilience, adaptation, and innovation will fail to develop as shared attributes.

But is it possible to not have a definition of Leadership? The answer is yes. Leadership is often an emergent property within an organisation, and a lot of the discussions around founder’s mindset or founder’s mentality underline exactly this: organisations often develop Leadership as an inheritance of the leadership style and attribute of its founder(s). Without an intentional analysis if the features of that style are still congruent with the rest of the elements of the organisation.

👉 Consequences: The absence of an intentionally designed leadership causes the formation of an emergent leadership that can sometime determine a level of inconsistency or incongruence:

• Unclear governance: Although formal governance models are part of the organisation model, the way organisations take decisions is an attribute of leadership. A typical case that happens in organisations during growth phases is the formation of consensualism, where leaders of an organisation start confusing involvement and engagement.

• Issues in Innovation and Change: one of the main territories where congruence of the Leadership model of an organisation is put to test, is its ability to steer change and innovation. An emerging leadership style that is not connected to the strategy of the organisation, may often create resistance patterns that create frictions in processing the needs for change or transformation.

• Missing Intentionality: the biggest impact, though, can very well be the impossibility to drive the intentional design required by the other organisation elements. Whatever type of leadership we’ll have, this will influence directly all the other elements. It will make it impossible to intentionally design the rest of the organisation, as Leadership is the sole source of the intentionality we require.

2. Undefined Culture: The Deprived Organisation

What happens when we don’t intentionally design Culture for our organisation?

Culture is what effectively defines consistency across multiple elements of our organisation design fabric. When culture is inconsistent in its manifestations (both visible and invisible), we enter an arena where negative energy starts flowing in the organisation. This is why I call this Deprived Organisation, to underline the “missing energy” levels that drain the organisation potentially affecting its entire survival.

How often did we read about a company going bust, with dozens of people assessing this was the result of a toxic culture? These are prime examples ona radical incongruence of the culture internally to the organisation. Point is that these incongruences can be tracked and made visible well before an organisations fails completely.

👉 Consequences: the absence of an intentionally designed culture can provoke several consequences, such as:

• Toxic Workplace Culture: Simply stated, inconsistencies at the culture level may immediately be visible through toxic practices that affect workplace effectiveness. Gossiping, lack of trust, poor engagement levels, high absenteism, are all examples of signals that the culture is not working and definitely not supporting the organisational effectiveness.

• Unethical Behaviours: The biggest problem that can arise is when internal culture looses also the reference compass with the necessary ethical boundaries of social behaviours. Multiple examples come to mind when thinking of large organisation’s failures linked to an emergent culture that allowed illicit behaviours to propagate.

• Poor Results: Incongruence in culture is immediately visible in the results of the organisation, sometimes even more than other elements of organisation design, especially if couple with poor leadership (which often is the case).

3. Undefined Purpose: The Drifting Organisation

What happens when we don’t intentionally design the Purpose for our organisation?

The concept of Purpose has gained traction in recent years, particularly as organisations started facing concerns about their global impact on environment and society as a whole. The idea of a “direction”, a “raison-d’etre” of an organisation is however rooted in the past. All the first endeavours, from guilds to commercial societies, had defined some kind of ambition, often in terms that would not be accepted today, but that where relevant for their historic period.

For a long period of time, however, the world of enterprises has been hit by the distorted idea that companies had a for-profit purpose. Which is also the main reason why a lot of companies still today do not have a formalized “purpose” (something that, instead, is more common in non-profit organisations, that need a specific definition of their core ideas to attract members, volunteers or donors).

This is why purpose is, probably, the most common element that is not intentionally designed. By not acting on this, often companies see their organisational focus “drift away” towards the default idea that profit is the main objective of organisational activities. This is why I name this The Drifting Organisation.

👉 Consequences: the absence of a formal purpose will create issues in the form of:

• Short-termism: Excessive focus on profit (often measured as EPS) often leads to short-termism negavitvely affecting organisational sustainability (I recently wrote about this on the De Geus’s Law article).

• Goal Divergence: Organisations might start acting in divergent ways in terms of short-term goals, business model set-ups, strategic directions. Without the unifying effect of a purpose, employees and collaborators might also start becoming “confused” in terms of their actions.

• Misalignment with Employees: A company purpose also serves as a compass for employees to align their motivations. When defaulting to “profit”, engagement levels will lower, and activities will be highly dependent on rewards policies and incentives. People will often leave for higher salaries…

4. Undefined Ecosystem: The Detached Organisation

What happens when we don’t intentionally design the Ecosystem for our organisation?

It may sound weird to be able to “design” an ecosystem for our organisation. As a matter of fact, applying Intentional Design to an ecosystem means essentially recognising the role of our organisation into the web of relationships that exist around us. If the Business Model defines the relationship with Customers, it is at the ecosystem level that we define relationships with other key stakeholders.

Emergent design elements for Ecosystems are evident in many organisations. From compliance roles, to Public Affairs organisations, to lobbying participations and membership of industry groups, to occasional alliances, all these elements show that companies are aware of the need to build connections. But, is this done intentionally?

Too often organisations put themselves in a condition of “compliance”, they see themselves on the receiving end of environmental inputs. But very seldom they start a “design” of their value interactions.

Yes there are topics that are on the agenda of every organisation today (such as ESGs and Corporate Sustainability), that would require more intentional focus on this.

This is why I named this the “detached” organisation, because we assume a passive role in the definition of value added relationship.

Think just at the world of Investor Relations. Technically, shareholders should be one of the main asset for an organisation. Yet, most IR portals simply show what is needed from a compliance point of view. There is a tendency for managers to “mistrust” shareholders, instead of considering them allies in the company development. This disconnect is even more evident for those companies that have shareholder programmes for their employees. Very few have intentionally designed something for these people, who are not only working but also investing in their company.

👉 Consequences: the absence of an intentional ecosystem will create issues in the form of:

• Purely Transactional Relationships: the organisation reduces its interactions with other stakeholders to mere transactions, often dictated by compliance. This is especially impactful in moments of difficulty, where the organisation might give up an important source of resilience..

• Missed Networking Value: Networks within an Ecosystem are an important source of value generation. Without a clear design of its relationship, the organisation might miss all the related value creation opportunities.

• Higher Transactional Costs: Organisations will have higher overall costs associated to interactions with the external environment. For example, not developing links with schools and universities might results in higher recruiting costs.

Conclusion: The role of intentionality

Read again the last issue of the newsletter.

All of the above (plus what we have seen in the last issue of the newsletter) shows once more the need to think of organisation design in terms of intentionality applied to the different organisation elements.

As things evolve for an organisation, it also shows how important it is to develop an “intentional maintenance” practice capable of verifying and updating, over time, the level of congruence of the system.

Congruence does not require for all elements to be designed. Some can emerge over time. For example, crafting Leadership will create the guardrails for a congruent culture to emerge. Developing an intentional Purpose, will allow for Strategy and Business Model to be “synched”. Designing the key relationships in the Ecosystem will allow the emergence of a meaningful value chain that spans internal and external stakeholders.

There are four further conclusions to this analysis though:

1. Organisation Design Elements need to be seen as a constantly interacting system. Focusing on one alone without considering the others (both in terms of design, but also simply in terms of analysis and awareness) means incurring in a high risk of failure.

2. Benchmarking and “copying” solutions that work elsewhere is the best way to disrupt a system, rather than help fixing it.

3. Intentionality means capturing the interconnectedness of the various components. This ultimately means that we don’t have to design each element to the maximum level of effectiveness but to the level that is “good enough” to ensure a proper level of congruence.

4. Organisation Design Elements need to be seen as a constantly interacting system. Although I presented them here one by one, issues on one of these expands as a ripple effect to all the others. I recently discussed the Law of Constraints in an article on my blog, and have proposed a formulation adapted specifically to the Organisation Evolution Framework.

What do you think?

Leave a comment

— Sergio

2. Site Updates

The Laws of Organization Design

I have continued publishing my articles on The Laws of Organization Design. Here is the latest articles published:

The Laws of Organisation Design

1. Metcalfe’s Law

2. The Law of Constraints

3. The Pareto Principle

More to come in the coming weeks!

— Sergio

3. The (un) Intentional Organisation 😁

Source: Pinterest

4. Keeping in Touch

Don’t hesitate to reach out by directly hitting “reply” to this newsletter or using my blog’s contact form. 

I welcome any feedback on this newsletter and the content of my articles. 

Find me also on:

• X (formerly Twitter)

• LinkedIn

• Instagram

• Medium

• Refind

• GoodReads

• Readwise

In the last issue of this Newsletter, I wrote about Consistency and Congruence, which are also associated with the dualism of Intentionality and Emergence in Organisational Design components.

I received a question on the impacts of not intentionally designing one (or more) of the components listed in the Organisation Evolution Framework. I have been thinking about it for a few days, and today, I will share my initial views on what happens in reality.

“un-intentional” design: what happens?

The above chart shows a hypothesis based on a particular situation that one of the elements is not designed intentionally (thus, it is missing the “congruence” link with the rest of the components). In this Newsletter, I will analyse the first four components of the Organisation Evolution Framework (Business Model, Strategy, Operating Model, and Organisation Model), leaving the other four to the next issue.

First, two general warnings:

1. All these cases are purely theoretical: it is difficult to see a situation where only one component is not designed “intentionally”. When this happens, the component will develop as an emergent attribute of the organisation (remember, all these components are always present).

2. Congruence is a dynamic process: organisation components that are designed intentionally tend to age in line with the mutation of the context. So it can happen that an element that was designed intentionally is not anymore “fit” to the situation.

So let’s see four specific cases.

1. Undefined Business Model: The Me-Too Organisation

What happens when we don’t intentionally design a Business Model for our organisation?

This means there is no formal definition of our value proposition and no conscious identification (at minimum) of our customers or consumers.

The organisation accepts a “me-too” approach, copying similar organisations already on the market or delegating the definition of its Value Proposition to other elements of its design.

👉 Consequences: This causes the formation of an Emergent Business Model where some of the critical attributes might not necessarily be under the organisation's control. A few cases can appear:

• Unclear route to market: A start-up company could focus so much on their innovation strategy (focusing on R&D), only to realize that the products created do not have a straightforward market application, as the organisation failed to identify potential customers.

• Issues in identifying market constraints: A group of employees from an existing company could create a “spin-off”, focusing their initial attention on operating and organisational model improvements compared to their previous employer, assuming they would compete in the same market and customer base. However, they might later realize that the former employer has created a barrier for them to access its customers, thus creating issues in their route to market.

• Missing proposition for their customers: A non-profit organisation could be created with a strong focus on a prominent and ambitious purpose. Still, it could fail to identify potential donors, thus vanishing their initial efforts.

2. Undefined Strategy: The Directionless Organisation

What happens when we don’t intentionally design a Strategy for our organisation?

Many would argue that finding a company without a strategy is almost impossible. The reality is that many organisations don’t have a real strategy but rather a liturgy of processes that project their financial results in the future. The biggest mistake many make is assuming that a budget is a strategy. Wrong. There is a lot more than cost and revenue definitions into strategy definitions. Thus, the possibility that the Strategy is not designed intentionally is pretty high.

This means there is no formal definition of our Strategic Choices, which means not having clear priorities in the organisation.-

The organisation accepts a “Directionless Status,” whereby direction (or criteria) are not formalised; thus, choices are made tactically. There might be moments when being tactical can be a strategic choice, and there might also be moments when an opportunistic approach might be the best way to capture opportunities.

After all, Henry Mintzberg directly theorised the formation of an Emergent Strategy in his Strategy Safari as one of the possible (and valuable) alternatives to an intentional plan.

👉 Consequences: the absence of a formal intentional strategy can create issues sometimes, for example, when:

• Inconsistency in product portfolio: A company that is very active in M&A could develop a purely opportunistic approach, buying what is available on the market and ending up with a portfolio of inconsistent products or services.

• Incapacity to define value: A start-up that is very active in R&D could start developing a product, then continue to move in a direction in terms of prioritisation of components and results, ending in a vicious circle that doesn’t allow the company to capture value.

• Missing alignment of goals and activities: An organisation might fail to update its strategy after a disruption in the market, causing employees and managers not to understand new prioritization within the organisation. This can create hectic behaviours and erratic results.

3. Undefined Operating Model: The Random Organisation

What happens when we don’t intentionally design an Operating Model for our organisation?

In my experience, this is the most frequent case. Too many organisations focus on drawing org charts and internal policies but fail to stand before their drawing board and actively build their operating model. To me, this is akin to planning a house by focusing solely on the interior design without a clear focus on designing its structure, including the wiring and plumbing.

This means there is not a shared understanding of the Value Delivery Chain of the organisation.

There’s a shared assumption that by simply adopting a traditional organisational model (let’s say a functional hierarchy) and having a definition of our Business Model and Strategy, the rest will follow. In my experience, this assumption can work only in simple markets with no differentiating skills and limited innovation. In how many cases does this happen?

The problem with not intentionally designing your operating model is that many choices will create inconsistencies within the organisation without you expecting this.

👉 Consequences: the absence of a formal operating model will create issues in the form of:

• Bloated Systems and Technology: A company implementing a new ERP tool will often approach the implementation purely from a technology perspective, failing to tune processes to its internal requirements and finding itself with bloated systems that are not always fit for purpose.

• Unfit Structures: A new company that starts operations without a clear Operating Model in mind could find itself with way too big back-office operations compared to its front office, resulting in productivity issues that could lead to bankruptcy.

• Siloed Mentality: A company that implements a functional organisation without clarifying the other components of its operating model will quickly develop a siloed mentality and will have challenges connecting value-creating processes.

4. Undefined Organisation Model: The Chaotic Organisation

What happens when we don’t intentionally design an Organisation Model for our organisation?

This might seem remote, but many organisations fail in the initial steps of their development journey because they don’t plan their organisation model coherently. I see two prominent cases here: 1) companies that assume that a hierarchical organisation is a way to go without giving a thought to the actual needs of their business and 2) organisations that decide to explore alternative organisation models but don’t spend enough time in assessing if it fits their needs.

The first case is way too typical, often intercepting a missed focus on the operating model. We assume we need a functional/hierarchical organisation and let it grow based on the requests of individual managers. This can quickly produce an unsustainable outlook.

Unfortunately, the second case is also becoming more frequent and is one of the main reasons some self-management experiments fail. The organisation does not spend enough time assessing the best model for them, the rules of the game and the ways of working.

This means there is no shared understanding of the definition of work for the organisation.

👉 Consequences: the absence of an intentional organisation model will create issues in the form of:

• Unsustainable organisation sizing: where structures are created more to balance internal power structures than real business needs.

• Unclear governance: the organisation will have difficulties prioritising activities and goals, allocating resources, and ultimately choosing its own path to success.

• Low engagement levels: The organisation will fight to define a value proposition for its employees and collaborators regarding how they contribute to its success.

An Initial Conclusion: The role of intentionality

We have seen above a few examples of how not applying intentionality to the design of each of the organisation's design elements can create problems in both consistency and congruence of the system. In the next issue of this newsletter, we will cover the other four elements of the Organisation Evolution Framework (Leadership, Culture, Purpose and Ecosystem). Still, it is already possible to establish a few conclusions:

1. Yes, we can allow some elements of design to emerge in time. Still, it is critical to ensure we monitor each component's impact on our system's overall sustainability. We need to be able to assess the unintentional consequences of missing decisions.

2. Intentionality means capturing the interconnectedness of the various components. This ultimately means that we don’t have to design each element to the maximum level of detail but to the level that is “good enough” to ensure the required level of congruence.

3. Copying from others (also in the sophisticated form of benchmarking) is often the best way to create problems. Why? Because most of the components are not neutral to the situation in which we cascade them. This is why even the simple implementation of a system with a standardised process defined elsewhere can cause issues if it is not framed in an environment of intentionally defined boundaries, rules of engagement, and so on.

What do you think?

Leave a comment

— Sergio

2. Site Updates

The Laws of Organization Design

I have continued publishing my articles on The Laws of Organization Design. Here is the complete list of articles published:

The Laws of Organisation Design

1. Conway’s Law and Intentional Design (reviewed article)

2. Parkinson Law

3. Law of Triviality

4. Goodhart’s Law

5. Brooks’s Law

6. Hackman’s Law

7. Larman’s Law of Organisation Behaviour

8. De Geus’s Law

More to come in the coming weeks!

— Sergio

3. The (un) Intentional Organisation 😁

Source: Pinterest

4. Keeping in Touch

Don’t hesitate to reach out by directly hitting “reply” to this newsletter or using my blog’s contact form. 

I welcome any feedback on this newsletter and the content of my articles. 

Find me also on:

• X (formerly Twitter)

• LinkedIn

• Instagram

• Medium

• Refind

• GoodReads

• Readwise

In the evolving landscape of organization design, that I tried to capture in the Organisation Evolution Framework, two concepts—consistency and congruence—serve as foundational pillars. While often used interchangeably, these terms carry distinct implications for how organizations are structured and how they function. Understanding the nuances between consistency and congruence, particularly in the context of intentionality and emergence, can offer valuable insights on how we can best evaluate an organization’s design and its effectiveness and also guide us in assessing any issues that can result.

Consistency vs. Congruence: A Delicate Balance

Consistency in organization design refers to the uniform application of rules, practices, and processes across an organization. It’s about ensuring that every part of the organization operates according to the same principles, creating a predictable and stable environment. Consistency is often driven by a need for control, risk management, and efficiency.

Congruence, on the other hand, goes beyond mere uniformity. It’s about alignment—ensuring that the various elements of the organization, such as its business model, strategy, operating model, culture, and so on, are all aligned and work harmoniously together. Congruence is more dynamic and context-dependent, allowing for flexibility and adaptation. It focuses on the degree to which the different components of the organization reinforce one another, leading to greater overall effectiveness.

While consistency is crucial for maintaining stability, congruence is essential for adaptability and resilience. In an ever-changing environment, organizations that are merely consistent may struggle to respond to new challenges. Conversely, organizations that are congruent can adapt more easily because their elements are aligned in a way that supports change.

Relationship with Intentionality and Emergence

The two concepts are very much linked to two elements we have spoken about in the past in their application to organization design: intentionality and emergence.

At first glance, we could assume that consistency as a property could originate from emergence and would not necessarily require intentional design. In contrast, congruence would require a broader leadership engagement.

The reality is that we can have different scenarios based on the combination of these dualisms.

• Emergent Consistency—this is the case whereby some of the components of the organization’s design simply emerge by consistency with some of the other elements. If one of my declared strategic choices is to prioritize customer satisfaction, the expectation would be to observe a “customer-first” approach also at the level of the organization's culture. There are many aspects of an organization's fabric that are highly influenced by these two forces, especially in the realm of consistency between reward mechanisms and people's behaviours.

• Emergent Congruence — this is the idea that certain aspects of an organization’s design evolve organically, often as a response to changing environments. This allows different parts of the organization to evolve in contextually appropriate ways that align with the organization’s broader goals, even if they are not strictly consistent with the original design. Many of the self-management models aim at producing this congruence level, as they assume teams would constantly re-align also in the presence of external factors. This calls, however, for a level of diffused leadership that can enable this congruence factor to emerge.

• Intentional Consistency— is the most common intentional action in organisational design. It simply involves adherence to design standards and uniform application of rules. In many ways, this is what many OD practitioners have been taught in organizational work. Which often drives a quantity of documentation, processes, and job descriptions, abuse of benchmarking and of external consultants. It is very visible and observable, but experience shows that this approach has its limits, mainly as organizational complexity does not allow us to manage and design everything.

• Intentional Emergence — this is instead the combination that Intentional Leadership should be aiming for. Design the critical elements, and embrace the bottom-up development of structures and practices that ensure alignment of the organization to its Purpose and ultimate goals.

In practice, organizations rarely operate entirely on one of the combinations above. Instead, they all navigate among the dualism of these factors. Finding a balance is therefore a precious focus.

Building Intentional Leadership

Leadership plays a pivotal role in managing the balance between consistency and congruence, especially in the context of intentionality and emergence. Effective leaders recognize that while it is important to have a clear vision and a consistent approach to strategy and operations, it is equally crucial to remain open to emergent patterns and changes within the organization.

Leaders as Designers: Leaders who view themselves as designers understand that their role is not just to impose a structure but to create conditions where the organization can evolve in congruent ways. This involves setting broad guidelines and principles that ensure alignment with the organization’s goals, while also allowing flexibility for different parts of the organization to adapt as needed. This approach fosters an environment where emergence is not seen as a threat to consistency but as a means to achieve greater congruence.

Adaptive Leadership: Adaptive leaders focus on creating a culture that values learning, experimentation, and feedback. They understand that congruence often requires allowing for deviations from the norm when those deviations are contextually appropriate. This means that while they may start with an intentional design, they remain attuned to the emergent needs of the organization and are willing to adjust their approach accordingly.

Strategic Integration: Leaders must also consider how to integrate consistency and congruence at a strategic level. This involves recognizing when to enforce uniformity and when to allow for divergence. For instance, in highly regulated environments, consistency might take precedence to ensure compliance. However, in fast-moving industries, congruence might be more important as different teams adapt to new challenges.

Conclusion: Achieving Harmony in Organization Design

The interplay between consistency and congruence, and between intentionality and emergence, is at the heart of effective organization design. While consistency provides the foundation for stability and efficiency, congruence allows for the adaptability and resilience needed in a complex and ever-changing environment. Leadership is the key to balancing these forces, guiding the organization through a landscape where both intentional design and emergent development have their place.

Ultimately, the most successful organizations are those that can harmonize these elements—leveraging the strengths of both consistency and congruence, and navigating the dualism of intentionality and emergence with agility and insight. This balance not only enables organizations to achieve their strategic goals but also to thrive in the face of uncertainty.

Leave a comment

— Sergio

2. Site Updates

Updated Version of the Organisation Evolution Framework

I have recently updated the Organisation Evolution Framework model that I proposed in 2020, to its release 3.0.

You can find it on its new page directly on my site, where it is also possible to download a pdf version.

Leave a comment

The Laws of Organization Design

I have started reviewing some content of “Organization Design” Laws. Far from being real laws, these are often the fruit of observations and experience of academics or practitioners. But are very useful to drive discussions, avoid hidden spots and complement our focus on Organization Design applied in company.
Here the first article published.

• Parkinson Law

• Law of Triviality

• Goodhart’s Law

• Conway’s Law (this was already published in the past)

— Sergio

3. The (un) Intentional Organisation 😁

Source: Pinterest

4. Keeping in Touch

Don’t hesitate to reach out by hitting “reply” to this newsletter directly or using my blog’s contact form. 

I welcome any feedback on this newsletter and the content of my articles. 

Find me also on:

• X (formerly Twitter)

• LinkedIn

• Instagram

• Medium

• Refind

• GoodReads

• Readwise

Welcome back!

Many of you have probably been enjoying some time off this summer, resting, relaxing, and exploring new areas of the world (And some of us may also have learned a new word this year: OverTourism).

For me, this is, however, a slightly different return. I’m reactivating this newsletter after a two-year hiatus that probably lasted too long. For those who know me, writing has always been an essential process in my life. But also a very discontinuous one.

Yet, here I’m back, at the edge of the season that many of us label “return-to-work”. My commitment this time is to issue this newsletter every two weeks. Why? The last two years, with the additional experience and the additional curiosity about what’s happening around me, showed me that there is still a lot of need to reason in terms of Intentionality.

So, welcome back. I hope you enjoy reading this newsletter again!

— Sergio.

2. Intentionality and Emergence in AI

Artificial intelligence has definitely received more attention globally since the last time I wrote this newsletter. The concept of Generative AI is becoming widespread across organizations (and not only). The images used in this issue, for example, are all AI-generated.

Interestingly, this field is a perfect area to examine the impact of Intentionality and Emergence, two foundational concepts at the heart of the Intentional Organisation concept.

Intentionality and Emergence in the Context of AI

Intentionality, in the context of AI, refers to the directedness of a system's operations towards a specific goal or purpose. In AI, intentionality is typically encoded by human designers who create algorithms with specific objectives, such as recognizing patterns, making decisions, or optimizing specific outcomes. Intentionality implies that the AI system operates with a purpose, even if that purpose is externally defined and not inherently "understood" by the AI itself.

Emergence, on the other hand, refers to the phenomenon where complex patterns or behaviours arise from the interactions of simpler elements within a system. In AI, emergence is not explicitly programmed but arises spontaneously from the interactions of numerous components, such as neurons in a neural network or agents in a multi-agent system. Emergent behaviours can be surprising, unpredictable, and often more complex than the sum of the elements involved.

The two elements can create reinforcing loops, especially when emerging behaviours are captured by AI systems' self-learning patterns. We have read a lot of “emerging” unintended consequences in the world of Generative-AI. But how do these aspects play in an organizational context? Let’s reflect a bit on this.

AI Intentionality vs. Emergence in Organizations.

There are at least five areas where the impact of the intentionality vs. emergence dichotomy in an organizational context.

1. Decision-Making Processes

We often implement AI systems with specific, intentional goals, such as improving efficiency, enhancing decision accuracy, or optimizing resource allocation. These goals shape the design of AI tools that assist or even make organizational decisions. For instance, we might deploy AI to intentionally streamline customer service operations or automate financial transactions to reduce costs and improve response times.

However, as AI systems are integrated into decision-making processes, emergent behaviours can arise, influencing decisions in ways that were not explicitly intended. For example, the same AI intended to streamline customer service operations might identify new patterns in customer behaviours that were previously unnoticed. This can potentially lead to AI-generated decisions that are not in line with the original “intentional” design.

We need, therefore, to be able to intercept, analyse, and comprehend these new emergent properties by ensuring that the decision-making structure does not transform itself into a “black box” led solely by an unintelligible algorithm. This might involve creating cross-functional teams that can rapidly respond to emergent insights, or establishing feedback loops where human oversight can intervene if AI-driven decisions lead to unintended consequences.

2. Workflow and Task Management

Another area where organizations typically design AI systems is the intentional goal of automating routine tasks to improve efficiency and reduce human error. This intentionality shapes how workflows are structured, with AI tools often taking over repetitive, data-intensive tasks, allowing human employees to focus on more complex and creative work.

However, as AI systems are deployed, emergent behaviours can alter the dynamics of workflows in unanticipated ways. For example, an AI system designed to optimize task allocation might start redistributing work in a manner that inadvertently creates bottlenecks or disrupts established team dynamics, thus deteriorating results.

Organizations need to design workflows that are not only optimized for AI's intentional capabilities but also resilient to emergent changes. This could involve developing flexible work structures that can adapt to new patterns and behaviours as they emerge, ensuring that the organization remains agile and responsive.

3. Innovation and Organizational Learning

A third common area in AI implementation is driving innovation, whether through product development, market analysis, or customer engagement. AI systems are designed to analyse large datasets, identify trends, and generate insights to inform strategic innovation initiatives.

Here, Emergent Behaviours can be a powerful catalyst for organizational learning if the AI system and the Human supervisory teams are built in a way that is capable of capturing these elements. Unfortunately, we have seen a lot of cases where AI reflects the same type of bias in data analysis that their human programmers possess, thus reinforcing negative emergent behaviours rather than identifying opportunities.

4. Ethical Governance and Compliance

A hot topic for discussion today is the embedding of ethical principles into AI systems with the intentional goal of ensuring fairness, transparency, and accountability. Despite these intentions, there are many examples of emerging behaviours in AI that present ethical challenges. For example, an AI system intended to improve hiring practices might develop biases based on the data it was trained on, leading to discriminatory outcomes. Or it could use data that should be protected to drive decisions about individual performance. We need to be seriously conscious of this and the increased scrutiny that employees and public stakeholders are taking on this topic.

5. Organizational Culture and Change Management

A broader impact (yet to be fully grasped) is the effect of embedding AI in organizational processes for any of the reasons already mentioned. In many organizations, leaders are promoting AI adoption as part of a broader digital transformation strategy, aligning the organizational culture with the goals of technological advancement.

But, as AI is embedded into daily operations, it can contribute to emergent changes in organizational culture. For example, the increasing reliance on AI for decision-making might lead to a shift in power dynamics, where data scientists and AI specialists gain more influence within the organization. Automating specific tasks might change employee roles and identities, potentially creating resistance or altering organizational climate.

Conclusion

The interplay between intentionality and emergence in AI has significant implications for organizational design. Organizations that fail to recognize and manage this relationship risk facing unintended consequences, ethical challenges, and disruptions to their processes and culture. To effectively leverage AI, organizations must design flexible, adaptive structures that can accommodate both the intentional goals of AI implementation and the emergent behaviours that arise. Only this way, can we harness AI's full potential while remaining responsive to the complexities and uncertainties of the technological landscape.

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— Sergio

3. My Blog Refresh

Just before summer, I fully refreshed my blog, moving away from WordPress and into a new structure that is more content-focused, based on Notion and a web interface solution provided by Super.so.

As part of this, I started reviewing a few articles that still drive attention today:

• Leadership Models: The Theory and the Practice [June 24, 2024]. I have moved the Leadership Models collection into a Database format, allowing for easier usage and more flexibility. I will continue to add content in terms of models (there are more than 145 models currently listed).

• The Ultimate Quest for the Meaning of Work: [July 1st, 2024], I have done a quick edit of this series of posts, ensuring links are consistent in the new platform and correcting a few issues (including some missing images and outdated links).

• Business Models: The Theory and the Practice [August 21, 2024]: I have added a few models, checked spelling, and embedded feedback.

I have reviewed the entire site's look & feel and navigation. My goal is not to review all of its content but to keep it as a reference, focusing on the essay part and adding more relevant content as needed.

4. The (un) Intentional Organisation 😁

Source: The Seattle Times

5. Keeping in Touch

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A subtle line ties in large organisational transformation projects and the extensive discussions that are happening today about the return to work in physical offices. This line is about the role of accountability in an organisational setting.

1. Many significant organisational transformations fail because individuals don't feel accountable for change results.

2. The issue with remote work is that too many organisations (or rather, many managers) have not yet come to terms with handling the concept of individual accountability.

A big part of the problem in handling accountability in an organisational setting is linked to the fact that we tend to use the word interchangeably with the word responsibility. Even when run with a different meaning (like in a RACI matrix), there's still the underlying idea that responsibilities and accountabilities can be part of the same delegation process of organisational processes to individual roles.

Why is Accountability Different?

Accountability is different in a critical aspect.

Accountability is the acceptance, good or bad, of your personal actions that contributed to attaining or failing to meet an intended goal.

Following the above definition, we can see a critical differing aspect. Responsibility can be attributed to a person through a process of delegation. Accountability is instead about personal acceptance: individuals need to take an intentional act of acceptance of being accountable.

Traditional hierarchical power handling has created organisations where responsibilities are architected and planned carefully through formal delegation processes.

Yet, accountability is often much less present in most of these organisations. People tend to refuse responsibilities that are not formalised, actions that are not explicitly demanded initiatives that their line managers do not plan, and tasks that are not detailed in job descriptions.

The entire pandemic caused working-from-home experiment is essentially an Accountability Revolution. Why? Because it demonstrated how micro-management approaches don't work in that context, and many managers had to rely on the accountability of their teams to get things done. Almost a quantum leap for many.

Accountability is built on a foundation of trust and support, where employees are motivated to do the right thing and take responsibility when they do not. Something that can only come from a mix of self-interest and external push.

Building on such an Asset

Seeing management through the lens of accountability means having the tools to build new managerial processes from scratch. An example? Performance Management. Self-selection of goals and individual commitment makes it easier for employees to feel accountable rather than receiving them in a top-down model.

Another example is the OKR Model. Again, one of the key differences with the traditional MBO models is the team accountability that it tries to stimulate.

A third example can be Agile methods applied not only to software development but also to other areas of management: they all work thanks to ingrained levels of accountability.

Accountability as an Intentional Capability

It is easy to see why Accountability becomes such a critical capability for an Intentional Organisation. Clarity of goals and consistency of organisational assets constitute a fertile ground to develop accountability in individuals and teams.

But how do you nurture accountability? I believe this has become a key component of modern management and the basis for any self-management experiment. Feedback becomes a foundational element in creating constructive accountability, which you want to nurture as an organisation.

A Mindset Shift

What is critical to understand is that the world of "holding people accountable" is gone. The entire concept of developing accountability through command and control has never been working and shows an essential failure of traditional managerial models.

We need to honestly think of accountability as an enabler of intentional self-expression of the contributors to an organisation's success. In a world where people are constantly looking for a new meaning of Work in terms of self-realisation, accountability is what ties them to organisational purpose, becoming the basis of the organisational contract.

Sergio

Cover Photo by Adi Goldstein on Unsplash

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When I first read Douglas Adams' The Hitchhiker's Guide to the Galaxy, I felt the author was an absolute genius in describing the scene of the Deep Thought supercomputer spitting the number 42 as The Answer to the Ultimate Question of Life, the Universe, and Everything. But unfortunately, the answer seems meaningless even to the computer creators because the beings that architected the supercomputer never really knew what the actual question was.

As I started composing this newsletter and reading the number 42, I had to write this. Why? Because appealing to my "nerdy" side, I have collected, over time, several moments where I have witnessed organisational processes experimenting with authentic 42 moments.

A result appeared out of a process that nobody expected. And some people started investigating what the question was.

• How often have you seen an Analytics team creating dashboards to discuss how to use the data results? A clear sign that the dashboard is not answering questions.

• How often have you seen a company run a lengthy budgeting process involving all functions, producing a final number that the current situation has already made "outdated". What is the question the budgeting process is trying to answer?

• How often have you witnessed a recruiting team do its best to find new talent, get out in the market, run interviews, finally get the right person, onboard the person, and just a few weeks later, the HRBP is having a conversation with the Hiring Manager asking why that role was hired for.

• How often have you seen a company launch a transformation process, hire a consultant who develops a lengthy process, landing a Target Operating Model presentation that people wonder what is this for?

• How often have you seen somebody propose a "Best Practice" to be applied to a company, to see the puzzled faces of other managers wondering what precisely the problem you are trying to solve is?

• How often have you heard people talk about "agility" in a business context, just letting you wonder what the issue is here?

The 42 Syndrome

All rhetoric questions, of course. Yet many organisations face issues like these.

I call this The 42 Syndrome. It happens when companies put in place considerable transformation efforts that produce outputs of negligible (if any) value after a long time and where initial value assumptions (usually much higher) tend to be forgotten.

(There's another expression I learnt in France that has a similar echo: Usine à gaz. This focuses more on the difficulty of understanding the system).

Why does this happen?

1. We don't spend enough time defining the problem we want to solve. Instead, transformations are carried out simply because there's a best practice somewhere outside. Or because agile is a trendy methodology.

2. We build business cases that don't have much relationship with reality, focusing too much on intangible benefits with dubious value. Plus, we don't put complete monitoring systems during the project.

3. We create projects that try to address too many issues at once, trying to find the ultimate solution.

4. We run projects in silos (an element that is worsened when external providers are involved using waterfall processes), not allowing enough visibility on interim results.

5. We involve end-users late in the process. For example, often, testers are involved without real visibility on why a system or method was designed that way.

6. Ultimately, there's no actual governance on results measurement.

What's the answer?

I believe the answer is intentionally defining problems at the early stage of any change process and monitoring that the problem definition doesn't change as we go along. Only this way, we won't be surprised by the answer.

Or?

Did you also have a 42 moment in your company? I'd love to hear from you.

Sergio

Cover Photo by mohammad takhsh on Unsplash

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5. Keeping in Touch

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I've been asked a fundamental question. How do you evaluate investing time in developing an Intentional Organisation?

I thought for a long time around this. Unfortunately, it's very improbable that standard Return on Investment measures would work. Why?

Return on Investment, calculated using traditional metrics, is an important performance measure. However, it is very much limited by the ways we measure inputs and outputs, particularly as we tend to assume most financial measures.

When we create business cases, the list of assumptions tends to be very long to ensure a proper measure of ROI. Yet, results often differ from expectations, essentially because there is a very scarce understanding of value chains in organisations.

Without understanding how value is created, how can you estimate a return on investment? That's why the measures are, at most, limited, if not entirely incorrect.

Return on Imagination.

In an Intentional Organisation, I believe we should be looking at a different kind of ROI the Return on Imagination (ROIm).

As suggested by Tom Wujec in his 2008 book by the same title, the idea is that the actual value of design can only be assessed by the level of imagination it carries.

Imagination, after all, means the action of forming new ideas, which is exactly what we are trying to do with our organisation design efforts. We want to architect a future organisation imagining its complex consistency system.

Very often, organisation design effort is marked by defining a Target Operating Model, measuring the gap with the current state, and then estimating the investment needed to fill the void. Returns, however, are primarily dependent on reaching that future state.

Reasoning in terms of Return on Imagination means also taking into consideration the variegated inputs of the implementation process and the design process itself.

Imagination is associated with a general sense of positivity. When we imagine something, we tend to associate the value of an improvement with our destination design. This positive energy flow is already an important asset to be considered.

But ROIm is not just something that "happens": it's a way to assess the permanence of several organisational capabilities, as well as a way to control the build-up of organisational debt.

Building Specific Organisational Capabilities.

Ideally, several organisational capabilities need to be fostered, based on individual solid competencies:

• Active Sensing

• Learning Agility

• Applied Learning

• Envisioning

• Innovation

The idea is the following: the organisation needs to constantly and actively listen for internal and external inputs about change necessities (Active Sensing), especially at the edges of the ecosystem. It needs to translate these mostly "weak signals" into adaptive organisational practices through a cycle of Learning Agility (learning something new everyday) and Applied Learning (application of the new learnings). Joined with the capability of Envisioning Future State Results it will help shape the true Innovation for the company.

Enabling true innovation.

In the context of The Intentional Organisation, innovation takes a key significance:

Innovation is the capability of the entire organisation to become an adaptive part of the ecosystem, able to deliver distinctive and sustainable Value(s) to all its Stakeholders for prolonged periods of time. 

This is achieved by constantly innovating products, services and the organisation itself.

Imagination is the "fuel" that enables the innovation engine, which, as seen, is not just about products or services, but also the organisation itself.

ROIm becomes a critical concept, as it moves the focus from one of the value flow (financials) to a more "holistic" view. It will consider the impacts of investment that the organisation does in time dedicated to learning, to experimentation and agile prioritization.

Conclusion.

Thinking in terms of Return on Imagination means considering a number of factors that are part of the intentional design of the future of an organisation. It means understanding that a big part of the work is building on the capability to imagine the future, and building the consistency elements necessary to get there.

This is particularly relevant when we think at the impacts on Leadership and Corporate Culture components: their inconsistency with new design is often the biggest laggard element for successful change.

ROIm is particularly relevant as we build Ecosystems, simply because we can't control all actors of the environment. And the concept itself of sustainability is not easily measurable with sole financial values.

This topic needs further study, and I will be putting some more effort on this. Feedback are warmly welcome!

Sergio

Cover Photo by J. Balla Photography on Unsplash

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My working life started very early, like in many family-run businesses. My father owned a bar in the central square (Piazza Italia) in Nuoro, Sardinia. It was somehow an inherited art: my grandfather had opened the second cafè in Nuoro just before the Second World War, after having had the experience of working at his cousin's "Bar Laconi", the first modern café opened in Nuoro (this bar is a central figure in the novel by Salvatore Satta The Day of Judgement, where it is depicted as "Caffè Tettamanzi").

My earlier memories have been marked by putting in order the small fruit-juice bottles behind the bar or putting in order the empty glass bottles that needed to be returned.

As I grew up, I had to take more of a role in the family business, often working on Sundays and in the evenings. Although I must say, I've hated that job in many ways, as it ate up most of the time that my school friends would spend at the beach or enjoying themselves.

I did, however, learn a few precious lessons during this time.

Above all, the importance of customers and understanding the customer service is part science, part art. I recall those long winter evenings when a single patron would be able to stay for 2-3 hours, elbow on the bar, sipping a few glasses of his favourite drink, and seeking somebody to talk with. My father always told me that his real job was being a listener, almost a psychologist. And I have had the experience several times of this being very much true.

I managed to escape this reality when I went to University, finally leaving behind a job I did not want. But then, over time, I started appreciating the things that that experience taught me.

• I'm an introvert. But working in such an environment taught me how to establish positive relationships with customers, suppliers and other people. I'm still an introvert but have been able to act upon these issues.

• Be an active listener. I learned at a young age that the request for a drink could often hide something more. In a jargon that I've been taught much later, there's a big difference between what a customer "wants" and what they "need". And the difference is often shown in small clues that need active listening support.

• All businesses are customer-driven. You know how often it happens to have one of the slow evenings in winter, with no customers for the last hour. You start preparing to close, anticipating an earlier evening on the sofa watching a movie. You're ready to lock the door when a group comes in. You know that they'll stay past midnight, but you also know you are there for the customers. You can't bind them to your internal processes and rules, which I seldom find in organisations, but a key lesson for me.

• It's all down to real engagement. In Nuoro, there is one major festivity every summer, the Festa del Redentore. This attracted many participants in a long parade in traditional costumes, with many tourists coming along. It was the most important day of the year from a business perspective. It was all down to excellent preparation; all the family was enrolled full time, including extra help and support. We all had our tasks... but then, in the flow of the day, it was just about supporting each other, being flexible, and getting things done. Exhausted at the end of the evening, we were always damn proud of the immense fatigue of the day.

• You learn from the things you hate. This has been the key to learning. The things nearer to you and you often hate in some parts of your life are often the best way to learn. Even if retrospectively.

Why this story?

This new business adventure, and the impressions I have had touring the Campari headquarters these days, showed me how important our roots are. We are made of our many histories, and we often check this out of the workplace. Yet, authenticity is a crucial success factor in relationships and how we approach and recognise our strengths and weaknesses.

Being Intentional for me is also about personal consistency. Those same elements that "build" an organisation are present in some shape and form also within us as human beings. So whether you consider yourself a "me, inc." or just a human being with necessary work life, we need to intentionally build consistency in what we do, starting with recognising what we are.

This has been the learning for me this week. And I have intentionally chosen to make this a big part of my next professional steps.

What about you? What's your intentional learning from life?

Sergio

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A lot of the discussion in recent years about organisations has been moving around a few dualities, particularly the following two:

Hierarchy vs. Self-Organization

Designed vs. Emergent

To me, these are false dichotomies, as they often describe elements that cannot be really compared. Emergence and Self-Organisation can be seen as natural dynamics of human interactions. Design is a very specific activity that wants to actively impact a system. Hierarchy is a product of a very specific design, most often associated with a command and control management style. Can hierarchy be the product of emergent human interactions? Probably yes.

Thinking in terms of System Theory and Complexity Theory, all these elements are useful components of the way we "think" in terms of organisations. Those dichotomies highlight also the limits of many of our discussions around much of the organisation science because we end up mixing things.

I'm not an academic purist, and I always accept pragmatic knowledge shortcuts that help people understand reality. I'm fine to use concepts we can easily handle also against domains that are not always easy to grasp.

Yet, it is important to consider certain limits that are often introduced by discussions that end up being too simplistic.

The sentence itself of Intentional Self-Organization may seem misleading. It seems to "mix" two aspects that don't go well together. One of the problems I often face with my idea of Intentional Organisation is that it somehow gets associated with command and control methods. The logic is that intentionality is associated with a top-down decision-making system.

Wrong.

Let's see why.

Building Intentional Randomness

The quote above comes from Ed Catmull's book Creativity Inc., a worthy endeavour in the history of Pixar. I find this quote remarkably eye-opening, particularly in the wake of so much management literature that always looks to highlight this or that leader as the "maker" of a company's success. The reality is that randomness and luck constantly play a role in any social system. This also partially explains why executives who exceptionally performed in one context did not perform well in another.

Catmull suggests a complete decalogue of how to build a creative culture. Still, most of the suggestions are about designing the scaffolding that allows informal processes to unfold and develop creativity.

This is the case of Serendipity, a vital engine in creative innovation. Yet the concept of serendipity involves the idea that events happen "by chance". So how do you design for this to happen?

In summary, there are two elements for this to happen.

1. On one side, you plan for occasions for serendipity to happen, increasing the frequency of occasional encounters with people. For example, Steve Jobs planned the Pixar head office with only one location for toilets because he wanted to have people stumble into each other occasionally. This is the organisational architecture that needs to be created.

2. On the other side, you need to ensure that the individuals are "open-minded" to ensure that the power of idea generation really breaks through. This is the individual component, which, in an organisational context, is achieved through recruiting and selection, training activities, learning and so on.

All of the above looks exactly like a "Petri dish": you create the environment in which emergent factors get vehiculated more quickly and allow growth. This is why I chose an image of bacteria because these simple unicellular beings are masters in self-organisation.

Why mixing up is dangerous?

The problem with seeing, for example, emergence and design as two opposites is that we lose sight of enormous opportunities. A lot of the issues with some companies trying to implement contemporary organisational models is that they try to do so solely from a design perspective. But autonomy and self-management, two critical factors for the success of many of these models, cannot be "imposed". It would be best if you created a fertile ground for them to grow. So you need to Design for Emergence.

Yet on the other side, we also see how important it is to "steer" self-management experiments. Most successful self-management are born with a robust and top-down decision making leadership, at least initially, which provides the scaffolding for the model to emerge then.

I think that most of the complexity in spreading these new organisational systems lies precisely because we're looking at them from opposing perspectives.

Intentional Design is therefore as much about creating the conditions for self-organised consistency to emerge than directly designing specific managerial systems.

Many leaders can easily recognise that the most effective areas of their organisations are areas where the four elements above act together. Project Teams are an example: they often live thanks to the hierarchy (with one manager sponsoring the initiative and providing the funding), yet they self-organise across organisational silos. They often design critical elements of their work (through project plans, for example), but their fundamental interactions often emerge from the "informal networking" among members.

Sergio

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Sergio Caredda, an HR Professional that believes in the human side of HR. Sergio Caredda currently works for OVS SpA as Chief People Officer and has substantial experience in HR across multiple functions, both in business and in consulting. He recently launched a page to collaboratively collect resources that, from an HR perspective, can support the people of Ukraine.

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4. The (un) Intentional Organisation 😁

Source: Pinterest

5. Keeping in Touch

Don’t hesitate to reach out, either by hitting “reply” to this newsletter directly or using my blog’s contact form. 

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I'm sure you have all seen dozens of "Desire Paths" images. There's a great group on Reddit with hundreds of examples if you haven't. “Desire Path” does reflect the reality of design: one thing is designing something on paper, and one thing is matching the daily usage of people. People take alternate routes instead of the built path because they are more convenient. Over time, a new “desire path” is created that is different from the one designed.

In design terms, desire paths represent traces of use or wear that indicate preferred interaction done by users with an object or environment. They are sometimes seen as concrete examples of the concept of paths of least resistance.

If these can very well represent our aim for walking in the physical world, similar "shortcuts" exist in the fabric of every designed object or environment. And it is not just about the "unintended" consequences of design, but it tells us a lot also about the capability to explore and innovate.

Desire Path in Org Design

Why is this relevant in Organisation Design? Let's see a couple of examples.

1. Informal Networks dominate how organisations operate and often completely replace "formal" organisational charts in assessing communication flows, decision-making, and power mechanisms.

2. Cross-Functional Project Teams dominate successful innovation projects in many organisations, often adopting "exceptions" to policies and internal procedures to ensure speed and resource allocation.

3. Matrix Organisation Design often reflects an informal balance of power between "functional" and "business-driver" alignment, with processes not-aligned.

4. Side-processes exist in many organisations to "shadow" the major organisational liturgies (like budgeting, for example) and ensure monitoring and control beyond the formal objectives of the systems.

5. Excel still dominates in terms of individual users for reporting and analysis of data, also where large ERP and analytics solutions are in place.

These are just a few organisational Desire Paths, whereby individuals and teams "shape" their environments looking for paths that better "fit" their specific objectives.

When we think about organisation design, we need to take very well in mind the existence of these shortcuts. But we also need to be careful.

On one side, they can very well represent the need for speed, agility, and innovation within an organisation that is not adaptable enough. On the other hand, however, there can also be a misalignment, whereby individual objectives are pursued instead of organisational ones.

In both cases, investigations are necessary to assess the reasons behind these customised routes. We can do this through a formal five-step process, as Andreas Knoth suggested. In any case, the focus is to look at the relationship between the Action of the individuals and the Structure we put in place through the organisation design work.

Intentionality, Organisational Debt and Organisation Design

This concept attracted me because a Desire Path expresses an intentional action by individuals that ultimately changes the environment. This can be linked to lazy people who thus choose to walk the shortest distance. But can there also be another reading?

I made a mental connection with the concept of Organisational Debt a few weeks ago: many of the examples of desire paths that we see in organisations seem to be an attempt to overcome precisely the type of organisational debts we have seen.

• people try to find alternative ways of communication when the designed organisation chart ones do not work as desired;

• managers establish cross-functional teams when the organisational structure conforms to silos, therefore hindering the capacity to achieve results;

• informal matrices often happen when a specific organisation form is chosen, not taking into consideration competencies or "job family" solidarity;

• side-processes get established to avoid the shortcomings (sometimes perceived more than real) of the central systems;

Excel usage is a prime example of where the objectives of the individual (using a tool that allows to "think the way I do") might hurt broader organisational goals (using the same systems and data sources). Up to the point that Excel is often the culprit of many unsuccessful implementations of BI projects. I also listened to a CEO that mandated its IT to uninstall Excel from every PC in the organisation to "force" people to use the new shiny Business Intelligence dashboard.

This case apart, all other examples show the possibility of "Desire Paths" as alternative measures to circumvent organisational debt. So is it correct for individuals to be "paying off" a debt that the organisation is incurring?

Intentional or unintentional?

The most important aspect is what do we do with these desired paths? As I exchanged views on the topic of this newsletter, one colleague argued that the existence itself of Desire Paths is one of the best exemplifications that truly intentional organisations don't really exist, because individual action can create inconsistencies.

To me it's the opposite: the existence of organisational desire paths shows that people take intentional actions when they see inconsistencies in the fabric of the organisation. This is precisely my experience within VF when I established the HR Retail Team for EMEA. I had been given an objective to create strong competencies in the field, underlining the change of strategy the company was undergoing to a more focused DTC business. This meant moving around a lot of "organisational inconsistencies". The entire organisation had been designed for its wholesale business. Stores demanded different competencies and different ways of working. I took an enormous amount of "shortcuts" to allow this to happen, but this ultimately allowed the entire organisation to change and adapt.

My actions, though, were not just because of personal caprice, but because of the need to bend rules to achieve the assigned objective.

This is the essence, I believe, of what being agile means in an organisational context. Taking the fastest route between A and B, even when there is a designed path that is, however, more time-consuming.

The importance of this concept lies also in the experience that many of us have, when teams are able to achieve results despite the organisation of the company they work for.

Desire Paths should become more of a leadership aim then, or?

What do you think?

Sergio

Cover Photo via Twitter @SarahNicholas. Ohio State image via Reddit.

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A recent article by McKinsey, based on an interview of about 80 CHROs of US and European companies, affirms the need for a new "HR Operating Model".

It’s never been more important for HR to be a true strategic partner and a bridge between the workforce and the organization.

The article states several differences between the US and EU respondents. And focuses on a few capabilities areas that HR intends to build. However, despite the limited sample, the last priority area is problematic for me: "Putting the business in the driver's seat", defined as Shifting decision-making responsibility to line managers for processes such as recruiting and performance appraisal.

We have already seen how relevant the idea of Organisational Performance is and how much we should focus our attention on Productivity and Performance in the design of our organisations. The appraisal system should, therefore, be central in this design.

Yet, the idea that performance appraisal is owned by HR is the single most crucial point of failure for any performance appraisal system. Often joined with a general lack of understanding of business results by too many in the HR professional family, no wonder we keep interrogating ourselves on why these systems don't work.

So, When exactly did HR take the Diver Seat on these processes?

Ownership and Organisation Design

This is an example of one of the most significant misunderstandings underlying organisational design. The Design Process facilitator becomes the "owner" of the process itself. HR has often supported this conclusion, in some cases voluntarily. After all, in the great quest of having a "seat at the table", becoming a process owner is an excellent path to getting heard?

But let's step back and ask ourselves, who owns organisation design? Naomi Stanford tries to answer this question in her book Organisation Design: Engaging with Change published in 2013. She identified a trend:

That the overall 'design' of it is 'owned' by the business people, as a part of a business strategy, and the 'development' of it is 'owned' by the HR team. But these are not independent but integrated pathways. There is a business strategy that can only be delivered with the support of a corresponding HR strategy. 

Yet the topic is still open for discussion.

I agree with the above and genuinely think that Design needs to be owned collectively by the entire business leadership. HR needs to provide competencies and tools, playing the architect role in the construction flow.

What often gets wrong is the governance piece of design. RACI matrixes and the related field of work create cluttered spaces where a fog of HR jargon hides absolute "ownership" of systems and processes. So, owning the technology tool that supports the performance appraisal process makes HR automatically the owner of the process itself.

I don't want to think that HR is the only culprit. Other supporting families have acquired "power" in the organisation by "owning" entire systems, depriving the business of critical areas to exercise judgement and make business decisions. An example is Budgeting, which often constraints so much the strategic business decision process that it becomes a burden instead of a facilitator to business decisions. Think about the impact of cost centre structures on the organisation, and you get an idea of why this can be dangerous.

Why this happens

So, why is the above wrong?

Think about it. Stating that Performance Appraisal is owned by HR or that Finance owns resource Allocation means taking away from the business two critical activities for achieving business objectives.

This happens for three main reasons that intertwine each other:

1. First of all, it is the simple Principle of Bureaucracy, whereby a process gets "owned" based on a competency principle. Who knows the process owns it. In the original idea of Max Weber, this was not necessarily wrong because it allowed operations to be managed by the "best available resources". But we know that bureaucracy tends to go adrift into silo thinking and power exercise. Knowledge becomes a principle of exclusion from others.

2. Second, a low level of Organisation Design competencies in the organisation means we overlook critical components such as the Operating Model and the Value Flows. Instead, we focus on Organisation Charts and Process Flows, which offer a minimal understanding of what's at stake.

3. Third, Technology Application has vastly contributed to this problem by creating disruptive implementations of rigid systems, whereby the (technical) system decision-maker becomes de-facto the system owner.

Is there a solution?

Yes, but it's not easy. Because, especially in the case of HR, it means critically endangering the narrative that many CHROs have entailed for themselves in recent years. It is taking a seat at the table of decision-makers, being HR Business Partners by holding power on a few critical organisational processes. This, however, damages the organisation more than creating added value for the function.

The solution is to go back to the drawing table, showing that the added value of HR in Design is not by taking ownership of specific business decisions but by demonstrating competence in designing the best organisation for the Purpose and Strategy to be achieved. Continuously supporting innovation through Intentional Design of what's to come.

Else, we are creating a major source of organisational debt without having the tools to then manage it in the future.

Sergio

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What is Organisational Performance?

A very simple question, yet it is not easy to define, primarily as we focus on several elements introduced by the concept of Intentional Organisation.

Wikipedia defines Organisational Performance as

the actual output or results of an organization as measured against its intended outputs (or goals and objectives)

This definition, widely adopted as a baseline, concentrates a lot on the output, which is a general approach in the description of performance.

A Complex Definition

In a paper dated 2009, Prof. Pierre Richard et al., analysed the research background and definitions existing in management literature on organisational performance, underlining that it "is one of the most important constructs in management research". Their research focused on over 720 articles and ended up conceptualising two specific concepts:

Organizational performance encompasses three specific areas of firm outcomes: (a) financial performance (profits, return on assets, return on investment, etc.); (b) product market performance (sales, market share, etc.); and (c) shareholder return (total shareholder return, economic value added, etc.).

Organizational effectiveness is broader and captures organizational performance plus the plethora of internal performance outcomes normally associated with more efficient or effective operations and other external measures that relate to considerations that are broader than those simply associated with economic valuation (either by shareholders, managers, or customers), such as corporate social responsibility.

What they found is that there is an assortment of points of view weighing in on the definition of Organisational Performance, and it is not possible to find one unique meaning capable to satisfy them all. Their analysis brought several implications:

Implication 1: Measuring performance requires weighing the relevance of performance to focal stakeholders.

In our proposed model, this means focusing on the Ecosystem to understand the key stakeholders in our framework of reference. For many years the equation performance = profit highlighted the idea that the primary stakeholder to please was the shareholder (primarily through Friedman's thesis). With the developing theory of Stakeholder Capitalism, which is getting traction today, the question becomes much broader in terms of how you define performance then?

Implication 2: Measurement of performance must take into account heterogeneity of environments, strategies, and management practices.

This is an essential element to consider because any form of performance measurement is influenced by the tools we use to measure the performance itself. As well as management strategies or also expectations from some stakeholders. Amazon has been able not to produce profits for many years, still enjoying high market valuations, while many traditional retailers suffered whenever their revenues failed to cover costs.

Implication 3: Measurement of performance requires an understanding of the time series properties relating organizational activity to performance.

Think about a simple example. In many organisations, performance is managed linked to the budgeting process. I.e. it is evaluated against a plan of inputs/outputs (this can be quickly reviewed in the incentives that organisations have in place or in the way also financial markets react, not on absolute performance measures, but instead on the distance between forecasts and planned budgets).

The Blind Men and the Elephant

Therefore, understanding Organisational Performance can be described as an almost impossible task. The ancient parable of The Blind Men and an Elephant comes to mind.

Seven blind men who had never come across an elephant before are put in front of an elephant. Each one of them feels the large mammal by touching one and only one part of the body. Then they describe the animal, interpret a different animal, abstracting knowledge from a particular and partial experience.

Why is it relevant?

Understanding the concept of performance is very relevant from an Intentional Organisation perspective because of some of the elements we have included in our discourse.

1. An Intentional Organisation defines a Purpose that allows the organisation to establish its Definition of Value. Essentially, through purpose, each organisation can determine how its performance can be evaluated.

2. The mapping of the Ecosystem allows defining if this value creation is sustainable. For example, will customers buy our products or services? For how long? Will I be able to hire the right talents? How much will it cost me? These are just a few of the questions related to the Ecosystem and the broad sense of sustainability (which essentially anchors us to a long term perspective).

3. Internally, choosing the right Operating Model will help the organisation define the Value Delivery Chain that will enable performance and Value to be produced.

So, is this about Value Creation?

Yes, this is the critical concept beyond Organisational Performance.

How much Value is the organisational creating?

Answering this same question demands an Intentional Act defining which point of view the Value will be examined. Let's recall a vital principle: Value is in the relationship. We tend to think of Value in terms of financial quantities, but the reality is that Value is always relative to the relationship we're considering.

Organisational Performance therefore becomes the level of congruence that the intentional organisation achieves in the value it exchanges with its ecosystem.

A vital element to consider and that we will be continuing to explore in the coming weeks.

What do you think?

Sergio

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Last year, one of the issues of this newsletter was titled "Getting Things Done" and focused on the curious aspect of many of my mentoring efforts being focused on the question "how do I get more done at work?"

I introduced an important distinction that we need to make between productivity and Performance.

1. Productivity is the measure of the efficiency of producing a specific output. 

2. In contrast, Performance deals with how someone functions to accomplish something, which means that Performance underscores the concept of effectiveness rather than solely of efficiency.

Way too often, we see these words used interchangeably, resulting in adding to the confusion. There's so much written on personal productivity that we can quickly end up thinking we can start functioning as machines, solely focusing on optimising time spent rather than looking at the quality of what we produce.

This also substantially affects Organisation Design because we want to make sure that our organisations produce results. So what should then our focus be?

Productivity is a Feature of the Organisation

One of the objectives of organisational design is to ensure the organisation can provide a replicable set of activities aligned with its strategy and operating model to deliver its products or services. The efficiency of this design is traditionally analysed in terms of productivity, as what you would expect is an increase in output over time while keeping the input steady.

This is easily traceable in the standard way of looking at productivity through the following generic formula.

The above assumes that productivity is the product of the relationship between Output and Input. For example, in the case of a retail store, it can be given by the relationship between Net Sales (output) and the Labour cost invested to achieve that output.

Because companies rarely have clear strategies to increase output, they often intervene in the input to keep the productivity levels optimal. Continuing the example, this is why cost-cutting efforts are so often seen in retail.

However, productivity can be seen differently: not as a resulting KPI but rather as a constructive factor, a multiplier of our input.

This is how I see Organisation Design efforts playing their game, in trying to optimise conditions to ensure the level of Productivity increases constantly. How? Right-sizing jobs, having proper communication systems, providing suitable competency models, adequate reward mechanisms, the appropriate service levels, etc. Work-Design becomes particularly powerful in this context, as it allows the creation of a framework for reaching increased productivity levels. If the level of P increases, I can also increase the level of Inputs, still gaining more outputs.

The Role of Performance

Here comes the concept of Performance, which looks not just at efficiency but especially at effectiveness in reaching a result. The individuals can get results within the productivity framework we have created. Thus, through individual and team performance, the system's Productivity is achieved.

Let's give an example. Imagine Organisation Alfa having two teams of software developers. Both have the same number of people and cost the same to the company. They are responsible for two distinct product lines. Team A is thoroughly optimised in working; members rarely work overtime. They always respect deadlines, with great respect for internal processes, delivering results fully in line with the expected outcome.

Instead, Team B is more creative and less organised; they sometimes end up doing long hours of work debating the best solution to the problem, often missing interim deadlines, and delivering their project at the last minute. Usually, they do, however, over-deliver, often with one or two features not initially requested but that made sense during the path of work.

How do we evaluate Team A and Team B in terms of Productivity? If we look at money as the input, their Productivity is probably the same. However, let's look at the time spent. It might be that the productivity level of Team B could be slightly lower (especially if the additional features presented cannot be "estimated" in terms of impact on the outcome).

What about Performance? Both teams perform well, in line with objectives, with the second one probably ending being more effective than efficient.

Now the question is, do you want to have more Teams A or Teams B?

Not an easy answer

When I have posed the question, I tend to receive different answers depending on personality. For example, team B seems more energetic from the description, so it captures the fantasy of more creative people. On the other hand, team A attracts more those with a process-oriented approach. Some also have the feeling that Team A is focused on completing its tasks, whereas Team B can go beyond the goal assigned.

The reality is that teams rarely hit precisely the same results. A strict focus on traditional Productivity tends to stifle innovation, lower creativity and, over time, might create issues with the underlying Performance.

Adopting the more intentional approach to Productivity already raises benefits because you create an organisation where increased Performance is seen as a positive feature of the system itself.

But how do you then create an organisation that genuinely promotes Performance and not just Productivity? This is the conundrum of most discussions on Performance Management Systems and Processes that exist, as they often mix the two concepts. I will come back to this in the next issue of this newsletter.

Conclusion

Both Performance and Productivity need to be on the agenda of OD experts. I'm sure some of you have noticed that I have been speaking of Productivity at the organisation level and Performance talking about individuals and teams. It was not an incident. The reason is that I'm also referring to two different groups of reasoning from a system analysis perspective.

Should we be interested also in individual Productivity? Taylor tried to break up tasks in the most minute action to increase personal Productivity. But with intellectual activity, this is simply impossible. Thus it doesn't make sense to work in that direction.

Should we then look at the organisation's overall performance? This sounds like a more exciting endeavour, but it is more complex. Why? Because it drives the need to investigate the concept of Value and Sustainability that the organisation needs to define for itself. A topic we have seen as part of the definition of the Organisation Evolution Framework definition. And a case for another chapter in this fascinating journey.

Sergio

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Already a month has passed since Russia initiated the invasion of Ukraine. As I have been busy working on the #HRForUkraine initiative, I have been struck by the amount of "corporate activism" that immediately started to show in streams of solidarity and direct actions unexpected.

We have seen several different actions overlapping:

1. Transparent Activism by CEOs, some not new to taking a stance on burning issues.

2. Political and Academic pressure, sometimes also linked to some shareholders on companies to act (an example is the role of prof.  Jeffrey Sonnenfeld who has created the list at Yale University that is splitting companies into "good" and "bad" ones in taking a stance on Russia).

3. Consumer Activism, whereby consumer pressure groups demand actions, like in the case of Nestlè these days.

4. Employee Activism, whereby internal employees demand concrete actions, like in the case of Deloitte and under consulting companies.

In the US, this is underscored by a general tendency by the public to expect companies (and CEOs particularly) to take a stand on important policy issues. According to the 2022 Edelman Trust Barometer:

• 81% believe CEOs should be personally visible when discussing public policy with external stakeholders or their company's work to benefit society.

• 60% said that when considering a job, they expect the CEOs to speak out publicly about controversial social and political issues that the prospective employee cares about.

Some latecomers are also evaluating a robust reputational risk here, as the topic of the invasion of Russia did not go on the traditional division lines of western politics. Most companies have started to quickly think about the risks to their reputation were they to do nothing. With so many other companies pulling out, it likely seemed better to explain to shareholders and customers back home why they're leaving than why they're staying.

However, the question for me is how this links in with topics of Purpose and Intentionality that we have been discussing lately.

Purpose as a Guidance for Moral Dilemmas

The researcher in me feels compelled to call out that the actions of all of these companies underscore the normalization of stakeholder capitalism and the rise of organizational purpose.

This quote is by Stacia Garr, co-founder of RedThread Research. This company in 2020 issued interesting research on Purpose that underscores the necessity for a company to "publicly share purpose-based actions to normalize them".

Focusing on different stakeholders, in alignment with the Purpose and values of an organisation, is critical in moments of crisis such as the one we see now. But decisions are never easy or "black and white", especially in situations like the one we face. Leaders have faced Moral Dilemmas every day since the war started, each one requiring intentional action.

Let's see a few examples.

The situation is extraordinarily challenging for a global brand like ours, and there are many considerations. For 66 years, we have operated with the belief that communities are made better when there’s a McDonald's nearby

[…]

At the same time, our values mean we cannot ignore the needless human suffering unfolding in Ukraine. Years ago, when confronted with his own difficult decision, Fred Turner explained his approach quite simply: "Do the right thing." That philosophy is enshrined as one of our five guiding values, and there are countless examples over the years of McDonald's Corporation living up to Fred's simple ideal. Today is also one of those days. – Chris Kempczinski, CEO, McDonald's

This is how McDonald's CEO announced the closure of all McDonald's in Russia, a choice impacting more than 62.000 workers. Not easy, also because a significant portion of the stores is not operated directly but through franchising agreements, which has brought additional complexities. Some restaurants still reported opening two weeks after the decision. The closure is also underlined for its significance because it was one of the first openings to western lifestyles and has triggered immediate reactions by Russia's Duma.

Some companies have instead been taking a different decision, continuing to provide service to Russian customers, based still on assumptions linked to their Purpose and values. So it is the case of Cloudflare. Its CEO has written a long explanation.

Beyond this, we have received several calls to terminate all of Cloudflare's services inside Russia. We have carefully considered these requests and discussed them with government and civil society experts. Our conclusion, in consultation with those experts, is that Russia needs more Internet access, not less.

As the conflict has continued, we’ve seen a dramatic increase in requests from Russian networks to worldwide media, reflecting a desire by ordinary Russian citizens to see world news beyond that provided within Russia.

[...]

In fact, we believe the Russian government would celebrate us shutting down Cloudflare's services in Russia. We absolutely appreciate the spirit of many Ukrainians making requests across the tech sector for companies to terminate services in Russia. However, when what Cloudflare is fundamentally providing is a more open, private, and secure Internet, we believe that shutting down Cloudflare's services entirely in Russia would be a mistake.  – Matthew Prince, Co-founder and CEO, Cloudflare

Two different choices, yet both rooted in strong cultural roots. Both also have tremendous ripple effects on the companies' ecosystem, another element to consider.

Which underlines the fact that there is rarely one and only "right thing to do". No straightforward answer. And that's the entire point of having a Purpose that is a compass for moral and ethical action. It shows a path but does not dictate choices outside of the relationship system with all of the stakeholders at play.

Thinking about Employees

Companies in the food, agricultural, consumer goods, pharma sector are adopting differentiated solutions depending on their product lines. Most have suspended advertising and investments. Many companies have stopped operations in Russia but based instead on supply chain shortages than on the company's "political" decision. I have been tracking over 450 companies with the #HRForUkraine database to underline the impact of these suspensions on more than 450,000 workers in Russia.

Many of the companies that have been less willing to take more robust measures, underlined this precisely in terms of their "duty of care" for the employees in the country.

Yet also here there is no single straightforward answer, and HR these days has to confront an environment where also taking fundamental decisions is difficult. Just to give you a glimpse of the complexity:

1. Companies are facing challenges in explaining to their employees in Russia why they are making certain choices. The current legal restrictions make it practically impossible to criticise Russian actions, which adds to the complexity of the situation.

2. Sharing news and content from the west poses the risk of exposing employees in Russia to inspections and risks.

3. Some companies have started relocating their employees out of Russia. But this is difficult, few routes are open out of Russian airports.

4. There are extensive limitations in financial transfers, also paying a basic salary is currently a problem.

5. In certain areas, closing factories could trigger the potential for some blue-collar workers to enrol in the Russian army.

And these are just a few issues that are arising, all needing an answer in terms of intentional action.

Business Model Congruence

This situation has exposed, however, also another interesting aspect. Many business models have not been adapted to choices companies have made in terms of values, purpose and corporate sustainability. Marks & Spencer is an extraordinarily interesting case in this respect. A company deeply rooted in British history, with an ambitious sustainability agenda. Yet, despite its initial announcements of support, the company has been unable to close the Marks & Spencer stores in Russia, because they operate through a franchise agreement with a Turkish company.

The same is happening for many hotel chains, such as Marriott, and Yum Brands Burger King is facing the same difficulty.

These are perfect examples of choices that created Organisational Debt with far-reaching effects. If you set a Purpose for your brand, you need to be able to enact that purpose in every place where that brand is hanging. Seems such a simple idea, yet often not easily practised.

Conclusion

This new situation is bringing a lot of learning of what worked well with globalisation, and what instead didn't. Many corporations are paying important tolls for their past choices, but some are also rapidly adapting.

Yet, we should not forget that this learning is coming against the back of the worst humanitarian disasters of this century. A war intentionally initiated by an autocratic government, with an increasing amount of unintentional consequences.

Let's continue to approach all these moral dilemmas we are facing, keeping in mind the most important value of it all: our humanity.

Sergio

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This week Josh Bersin releases a report titled The Definitive Guide to Organizational Design: The Journey to Agile. My first reaction was, "great if even Josh Bersin acknowledges the importance of Organisation Design today, then we will see traction towards the needed focus".

Some exciting data accompany the report. According to Bersin's research,

approximately 58 per cent of companies are using haphazard organisational structures or heavily relying on role-based organisational design principles. Only 11 per cent are using organisational design approaches that are agile, have clear accountability for work, are continuously modified as needed for business change, and encourage employee growth in addition to business growth.

This derives from an Organisation Design Maturity Model that Bersin is proposing,

Although I share Jon Ingham's view that maturity models "rarely make sense", my consulting experience taught me that these models could serve a particular purpose in pushing organisations to act. Not many business executives like their company to be on the "immature" side of the spectrum.

I think the issue in the above model is about the term "Agile" used on Level 4. What do we mean by agile? We all know that this term is being used in many different directions. However, reading Bersin's report, it becomes clear we are not talking about applying full-scale Agile software development models, but rather thinking of Organisation Design as something that needs to change often and adapt.

Bersin links an essential dimension in his reasoning that Organisation Design is strictly related to Work Design. HOWEVER, what I found less than satisfactory is the details of this link. Although most ingredients are there, there's a lacking of true innovation, and a few of the aspects revert to very traditional HR processes or tools.

Bersin's Suggested Process

First of all, let's see the process that Bersin suggests.

Organization design is not a process of “spans and layers.” It’s far more. This is a process of bottom-up “work design” and building jobs that cluster work tasks in the optimum human way.

The below image shows the flow that Bersin suggests (and through it, we also start mapping the different components of the model itself).

The type of questions that the flow shows are correctly asked. Above all, the model rightly mentions that it is absolutely vital to reason in terms of the Operating Model first, as this is the genuinely critical component to infer the design of the organisation.

The flow also has another very relevant advantage, correctly pointed out by Jon Ingham:

Too many companies do start organisation design by looking at structure, rather than the work, and then focus on functional design and then hierarchy and delayering.

Following this flow, you create, instead, a binding process that looks at work first.

There is, however, another foundational layer that is missing: the Organisation Model. True, Work Design and Job Design are essential components, but an Organisation Model cannot be limited to simply designing the organisational structure. Otherwise, we risk falling into the same problem that Berins' work tries to avoid: the company focuses too much time on drawing organisational charts instead of pondering the model they want to implement.

Reasoning in terms of the Organisation Model is critical because it is there that many Intentional Choices are made and the basis for full organisational consistency is built.

Let's not forget that I have personally researched about 60 different models. And organisational models define not just work but also how decisions are taken and how communication flows. Unfortunately, too many organisations resort to traditional hierarchies because they don't spend time intentionally reasoning on how alternative models could better serve their business.

Bersin's Organisational Design Framework

The model comprises 7 major elements and 20 dimensions and is described this way:

merely focusing on organizational structure and hierarchy, spans and layers, and management models is not enough. Companies need to start with the business itself (identifying strategy, culture, and leadership), then define the operating model (identifying the customers and what roles, governance, and metrics are needed), describe what work needs to be done to drive success (work composition, accountability and rewards, and skills and experiences), and only then define job structures and organizational models.

Looking at the model, I echo most of Jon Ingham's observations and have a few more aspects to focus on.

• The process cannot just be left to right (or top-down as in the flow above) because many of your decisions on Work influence the above aspects.

• Purpose, Leadership, Culture are much more complex components than simple elements of Business Model Design, and they should be considered separately and with the needed focus. For example, think about the debate about Purpose-led decisions into the current Ukraine war, making many companies pull from the Russian market (and others willingly stay). How much does this impact Org Design?

• The Operating Model design misses one critical element: technology. Something weird considering Bersin's attention to tech topics in HR: this is particularly relevant today as we discuss automation, AI and Machine Learning. At the operating model level, you decide what role these elements will play in supporting your business.

• The other element that is completely missing here is the concept of the Ecosystem. Organisations don't live in a vacuum. They never did, but today this is even more true. Bersin's research focuses on quite some external market trends (for example, looking at demographics). But then, there's not much of an Organisation Design perspective into this element.

• An example is Remote Work. Companies cannot take decisions fully in isolation without considering the Ecosystem of services. And Work itself as a critical place today, as the "Great Resignation" demonstrates.

• Bersin correctly emphasizes Employee Experience as a value-adding connecting element between people and their organisation. But experience is only one of the components.

• Last but not least, most of the dimensions are expressed in a pretty traditional way in terms of Job and Work design, completely missing the change of Discourse of Work that is happening (and accelerating) these days. Therefore, job Crafting is the only alternative way to accommodate the new generation of workers that thinks of Work in terms of Personal Realisation.

Conclusion

Bersin's report has the enormous added value of bringing organisation design to the centre of the current management transformation. Topics such as Hybrid Work or The Great Resignation cannot be addressed by simply focusing on compensation, a few policies and some philosophical adaptations. They are all about the fabric of how Work gets done and ultimately affect the way business goals are achieved as an organisation.

All in all, I see this as a highly positive step forward.

The most damaging aspect, though, is the idea that you can encompass a "definitive" approach to Organisation Design into a report. Doing so exacerbates the approach that there is only good organisation design. Which we know is not valid.

The true lesson is that there's is not a definite organisation design, but only an evolutionary pattern of continuous improvement, made by intentional choices of the entire organisation.

Sergio

2. A Call for Action

In the past few weeks I have been focusing a lot of attention on the HR For Ukraine initiative. Here a few links on the most relevant pages of the project. Feel free to share, and also simply respond to thisn newsletter with feedbacks and suggestions.

A collaborative resource collecting links and tools for the HR Community on the crisis unfolding in Ukraine, including FAQs.

A list of Frequentky Asked Questions and resources for the HR on the effects on Russian employees of sanctions and companies pulling out of the area.

A Database of the companies suspending Operations in Russia and Belarus, and their impact on Employees and actions currently in place.

3. Reading Suggestions

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4. The (un) Intentional Organisation 😁

Source:Pinterest

5. Keeping in Touch

Don’t hesitate to reach out, either by hitting “reply” to this newsletter directly or using my blog’s contact form. 

I welcome any feedback, both on this newsletter and, in general, on the content of my articles. 

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When War erupted in Ukraine, I've asked myself: what is the role of HR in this?. I decided to collect resources and information channels into a shared collaborative workspace open for all. Have a look, and feel free to contribute by commenting on the site or tagging any resource with #HRForUkraine or #HRForRussians (yes, because we should care also for workers in Russia and Belarus!).

On February 24th 2022 Russia has started an Invasion of Ukraine.

The idea of this page is to collaboratively collect resources that can be useful, from an HR point of view...

1. Rediscovering Tektology

We are in a moment of deep turmoil, with the invasion of Ukraine by the Russian Army. It is always essential to avoid identifying an entire country with its regime in these moments. There's much more to Russia than the aggressive, illiberal and imperialistic vision that Putin is trying to implement. For this reason, I've decided to take a short detour from the traditional content of this newsletter and into history. And will do so, showing off that many of the concepts we regularly talk of today in management discourse have been somewhat anticipated by a Russian multipotentialite Bolshevik who invented an entirely new science between 1912 and 1917.

It all started with a Science Fiction Book.

Alexander Bogdanov was, as Wikipedia defines him, "a Soviet physician, philosopher, science fiction writer, and Bolshevik revolutionary". Reading about his life, you seem to be in front of one of those renaissance-born men, capable of spreading their intellect around multiple domains. I met him first as a science fiction writer. His Red Star (1908) is a fiction of a society on Mars that has fully embraced the principles of the Soviet Revolution. The meaning of work has changed in a society that has evolved, fighting a battle against the forces of that planet's Global Warming (!).

Through this novel, I discovered that Bogdanov had also been the author of a book called Tektology. He essentially has built a unifying framework for science and knowledge, anticipating the theories of Cybernetics and General Systems Theory that appeared in the West in the 50s. Despite being a personal friend with Lenin, Bogdanov's ideas were too revolutionary. They did not match the official line of the first Soviet government, thus ending in censorship oblivion for almost a century.

What is Tektology?

Bogdanov created the work based on the ancient greek work Tecton, which means "to build". In his mind, he was making a science of universal building, anticipating by almost three decades the idea of the "universal constructor" developed by John Newmann.

The goal of Tektology is to grasp the common organisational principles that underlie all systems.

The basis of tectology is a basic idea: the isomorphism of laws governing different systems. Isomorphism means that other systems are governed by laws that, even if different because they might relate to physics, biology, mathematics, or even human systems, do have an identical structure. 

The Political Vision of Tektology

In its author's idea, Tektology is meant to be a science supporting the vision of the socialist revolution and its concept of the new man. This science could help unify millions of people into a single collective. How? By carefully balancing the specialisation of work that is still needed with a central unifying theory of organisation that overcomes the traditional models of bourgeoise society.

As he made the first attempt to formulate some general laws of organisation, Bogdanov based a big part of his meaning on a philosophical belief that observation and perception were not different. Unfortunately, this piece of thinking created irreparable attrition with Lenin, which caused Bogdanov's vision to be considered dangerous, and condemned it to 80 years of censorship.

Bogdanov's Intuitions

We can see in Bogdanov's anticipation of themes that make up a lot of today's discussion, including self-management and manager-less organisational model, particularly as he identifies from the beginning that the critical issue in the world of science was the segmentation of knowledge across silos.

In a functioning society, knowledge should exist without artificial walls, and organisational theory should support connecting elements, not divisions.

For Bogdanov, organisations can develop a conscience as they overcome the silos division of knowledge. This way, they can stop thinking about stereotypes, according to "a stencil" of the world. What they develop is a form of creativity and true innovation potential. Creativity becomes an attitude applicable both to theoretical and practical tasks, based on the capability to unleash people from the constraints of segregated knowledge. In this way, any building task, in the sense of Tektology, is a creative task.

He also made advances in what we today would call complexity theory, as he clearly distinguished between complexity and complication in organisations.

Complex problems can always be broken down into several specific elements or issues. Each of these can be solved (or "created" as Tektology is about building) by a person of average quality. Hence the art is in decomposing complexity into simpler terms, a lesson that modern management has often forgotten. This way, Bogdanov developed an accurate heuristic applicable to organisations and their design.

He saw that there are opposing forces in any system that is developing. These contradictions develop into a "crisis", which leads either to a "revolution" or the system's death. Of course, as a Bolshevik, he had a particular idea of revolution. Yet we can easily migrate this concept into a less disruptive scenario, with some of the theories of change of today. Therefore, his idea of seeing and bringing forth a revolution out of the crisis as leadership capability sounds also very contemporary.

A fourth element that anticipates visions defined many years after is that Bogdanov considered that any complex organisation should correspond to its environment and adapt to it. He talks about stable and organised complex as something more significant than the sum of its parts (and his definition resembles a lot to what we today consider an organisation). When talking about stability, he thinks about how that specific complex can preserve itself in the environment through a continuous exchange.

Another anticipatory element that we can learn from Bogdanov is the interrelation between strategy and execution. According to him, all practical activities help us gain theoretical insights into the unifying forces of the Universe. Therefore, you cannot develop insights without practice. Those who "manage" an organised system need to be practical, not only theoretical.

According to Bogdanov's view, this is also why the worst enemies of progress are "specialists", another anticipation of a critical need we are seeing today so clearly about T-Shaped competencies needed.

What about intentionality?

The largest chasm that exists in Nature, according to Bogdanov, is that between unconsciousness and consciousness, else defined as between spontaneity and decisiveness. Yet these are not seen as opposing elements but rather as a circulating pattern connected by self-consciousness. Each of us has to go through this every day between sleep and awakening.

Easy to see a parallel between the idea of emergence and intentionality that we have seen several times. Also, here seen not as an opposition but instead as two reinforcing forces connected by awareness.

Conclusion

It is often easy to see anticipatory connections after so much time has passed, with more experience and 70 years of "western" systemic thinking. However, the reality is that probably some of the above ideas were only embryonic intuitions in Bogdanov's work.

Yet it is fascinating to see how specific topics can be reconnected through the fabrics of history and still appear so fresh and relevant today. With the added value of that socialist twist that, despite the failure of the communist state system, is coming back as a question in today's reasoning around collaboration in managerless organisations.

Hopefully, I've also been able to attract your interest towards a Russian person in a moment where the mental "unintentional" shortcut might be to link them all under one only label.

Sergio

Cover Photo by Steve Harvey on Unsplash

2. My Latest Posts

Organisational Debt equates to the amount of unintentional decisions done in Organisation Design. How much are you aware of its importance? What can you do?

3. Reading Suggestions

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4. The (un) Intentional Organisation

5. Keeping in Touch

Don’t hesitate to reach out, either by hitting “reply” to this newsletter directly or using my blog’s contact form. 

I welcome any feedback, both on this newsletter and, in general, on the content of my articles. 

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Looking at the concept of Intentional Organisation, I got recently asked if I had a position on the difference between Intent and Intention. The reason is that Intentional can refer to both words, and although these words are often used interchangeably, there seems to be a meaningful difference.

The origin of these words

Both words derive from the Latin verb intendĕre, which means the act of stretching out or reaching out to something. Both words arrived in the English language through French ("entente", "ententional"), and both also exist in Italian ("Intento", "Intenzione").

They are used with significant overlaps in their meaning, often almost interchangeably, even if a difference exists.

• Intent is more often defined as a purpose that a person wants to achieve. The word is mainly used in legal language to underline the state of someone's mind at the time, for example, of committing an offence.

• Intention is more often associated with a course of action towards a purpose or a goal. Thus, it relates to activity much more than a pure idea.

Another noticeable difference is that "intention" is a countable noun, and "intent" is uncountable. This stresses, even more, the fact that while I can have multiple intentions in terms of pursuing different actions, my intent is more intangible and abstract.

"Intent" is a mindset rather than something on a to-do list; it's what you carry in your mind when you pursue your intention.

"Intent” would be a held mindset or purpose, whereas “intention” would be the act of having that mindset or purpose.

Why is this relevant?

The word Intentional can be rooted in both words. From an organisation design point of view, being intentional translates therefore into a twofold intellectual experience:

1. Define the intent of your design activity, i.e. the purpose of what you want to achieve.

2. Pursue a number of intentions for your design process to be implemented, which represent the different courses of action you will be pursuing.

If it may still resemble a sterile differentiation of meanings, its importance will be clearer if we think of unintentional consequences of a specific activity. When we use that term, what are we referring to? A missing Intent or a missing Intention?

I think that a lot of org design activities are intentional in the sense that are pursued with a varying degree of intention. But the intent might not always be formalised, because not enough time is taken to define the underlining connecting coherence system.

At an overall organisational level, this can be seen very well when we look at the intent of an organisation (its purpose), and then we compare it with its strategic intentions. How often there's a lack of coherence there?

On being intentional

Therefore, being intentional means being clear about Intent and Intentions at different systemic levels:

1. With yourself. What is your intent with this project? Why are you doing it? What do you want to achieve? What are your intentions? Can you detail your course of action? How do they align?

2. With your team. Does the team collectively understand its intent? Why does the team exist, what is its purpose? How will it achieve its results? What means will it use?

3. With the entire organisation. Is the intent of the organisation clear? What is needed to define it? How do we translate that into intentions for the organisation?

There might be additional layers, but the meaning stays, and the process as well.

A Consistency Framework

The distinction between the two words helps also to reframe two of the topics we have recently covered in this newsletter.

• Organisational Debt. We have seen how debt is not a problem in itself, the issue being the level of awareness. Clearly defining the organisation's intent will facilitate the strategic management of debt making it an intentional choice, with planning activities.

• Conway's Law. We have seen how this is an unintentional consequence of organisational choices. Clarifying intent and intentions from an organisation's point of view will support the creation of better consistency between an organisation's design and its effect on the environment.

Consistency or even congruence from an organisation's standpoint are fundamental concepts that I have covered often, and the careful usage of these two words can help an even better understanding of the need for these.

Sergio

Cover Photo by Raphael Schaller on Unsplash

2. My Latest Posts

Conway's Law states that the products and services of an organisation are the result of its design. Intentional Design becomes the way to achieve consistency.

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4. The (un) Intentional Organisation 😁

Source: Pinterest

5. Keeping in Touch

Don’t hesitate to reach out, either by hitting “reply” to this newsletter directly or using my blog’s contact form. 

I welcome any feedback, both on this newsletter and, in general, on the content of my articles. 

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One of the most interesting metaphors derived from Software Development into organisation design is Debt. The concept of Technical Debt was first introduced by Ward Cunningham in 1992 when he stated that shipping first time code is like going into debt. He essentially referred to the fact that programmers, as they code, sometimes take shortcuts and don't produce a "clean code" to respect deadlines. This creates a debt that needs to be considered, making code more difficult to manage over time. This concept has resonated a lot, up to the point that Ward made a YouTube video in 2009 to explain how many people got his metaphor wrong. Let me pick two key concepts from that video when he states Technical Debt:

1. is not about missing or delayed features. Instead, these are product management choices.

2. It is not about producing poor quality: the initial product might be of high quality, but the code still might have debts.

3. Debt per se is not negative, as, with any other human activity, debt needs to be managed.

Technical Debt is fixed by refactoring code, which essentially means cleaning it; it does not add features visible to the users but makes the code more stable and understandable.

Extending the concept to Organisations

In 2015 Steve Blanks famously associated this same metaphor with start-ups, providing the first definition:

Organizational debt is all the people/culture compromises made to “just get it done” in the early stages of a startup.

The basic idea is that as startups focus on speed, especially in their early stages, they compromise on code features and many aspects of their organisation design. If the product is successful and the company grows, however, the scale of the organisational debt can quickly become problematic. So companies need to move away from the "we’re too small to need that" mindset and start refactoring their organisational debt.

Blanks looked especially at elements of Corporate Culture and Communication.

In reality, in 2012, Ben Horowitz had written an article on Management Debt, an idea that he credited to Joanne Bradford.

Like technical debt, management debt is incurred when you make an expedient, short-term management decision with an expensive, long-term consequence. 

He also refers particularly to startups and looks at a few examples of short-term decisions that can create issues in the long run, such as not clarifying role boundaries, overcompensating some employees or not creating a performance management process.

Everyone knows that pressure to ‘just get it done’ is the origin of the problem. This is why there is also a key leadership component in this concept, well captured by the definition of Scott Belsky, author of The Messy Middle where he dedicates a chapter to the concept.

the accumulation of changes and decisions leaders should have made but didn’t.

Aaron Dignan observes, however, that Organisational Debt is not a feature of startups only. In fact, he believes that it will turn out to be one of the most important concepts in the future of work.

He defines Organisational Debt as:

The interest companies pay when their structure and policies stay fixed and/or accumulate as the world changes.

Essentially the idea is that as time passes, organisations build roles, rules, structures, policies, procedures that become rigid and fixed by design.

The “interest” comes in the form of reduced speed, capacity, engagement, flexibility, and innovation that ultimately undermine the macro objectives of the firm: to survive, thrive, and achieve its purpose.

He also specifically identifies two ways where Debt manifests itself:

1. Obsolescence: This essentially happens when structures and policies become "unfit" to market conditions.

2. Accumulation happens when policies and procedures are constantly added but never removed.

It's easy to see this phenomenon happening in any of our organisations. But there are many different sources of debt. Let's see some:

• Business Pressures

• Lack of Collaboration

• Poor process design

• Policies everywhere

• Lack of testing

• Siloed practices (which create redundancies).

How can we assess the current Debt levels?

If you look yourself around in your organisation, you will for sure find traces of Organisational Debt. Unfortunately, we don't have today an organisational "p&l" that allows us to monitor the exact levels of debt. Yet, we can analyse and investigate our debt levels in some easy ways.

Debt can be identified through different tools, like running an organisation chart diagnostic or a broader assessment covering different design elements.

For example, just scanning an org chart, it is possible to spot several issues, such as:

• Redundant Organisational Structures

• Sideline projects that attract resources

• Outdated Structures (Team A that actually does Z)

• Premature Structures

• Disorders and so on.

Reading policies and procedures can give more insights and run through compliance reports. Likewise, the same analysis of Employee Satisfaction surveys (or similar) can provide a minefield of clues.

The idea is to run some debugging ahead of refactoring, for example, by running a "kill" list.

The issue is that very often Organisational Debt is already out of control. There's no awareness about its impact until market conditions make it evident that the organisation cannot repay the interests.

Organizations may intentionally or unintentionally incur organizational debt through management actions, governance process changes, internal process changes, or large-scale organizational changes when short-term advantages are sought at the expense of "doing things right."

So is it possible to intentionally manage organisational debt?

Deliberate Debt

Exactly like when you take Debt to finance your business, you need to be careful when taking Organisational Debt.

First of all, it is important to consider the Total Cost of debt (the sum of the capital plus the interests). This is because interests grow with the increase of risk for the lender, which is why if you ask for a second or third loan, these might come at a higher interest rate.

The second aspect to consider is that repayment needs to be done independently of business results. This is an important aspect because Debt is taken in anticipation of certain business results, which might not concretise.

Therefore Taking Debt needs to be an act of Intentional Design. You need to clearly analyse alternatives and make sure you commit to a sustainable level of debt.

I believe it boils down, again, to the concept of consistency. In most cases, Organisational Debt will result from not taking decisions. We need to ensure this is intentional and not just done to avoid consequences. A critical example is the nature of too many procedures in our organisations, often implemented as an escape door from taking action.

unmanaged organizational debt can bring disastrous results, and managing debt is more sophisticated even than managing change. If an organization isn't managing change, it probably can't manage debt.

So is your organisation capable of managing change today? The above made me immediately think about the key fuel for making change happen in organisations: Trust.

Building Trust

The only way to manage Organisational Debt is to ensure that your organisation has adequate internal trust levels. Only this way you will be able to support the necessary pressure to "fix" all the organisational issues we have mentioned, conducive to debt.

Nurturing Trust is akin to setting aside the resources to repay Organisational Debt when needed. With Trust we can pay forward our Debt.

Here is where things do often go severely wrong. In many cases, Organisational Debt can be seen especially in excessive policies, duplication of roles, control mechanisms. All elements decrease the level of trust within an organisation.

We all know the example of a new Travel Policy created simply because a colleague had abused good faith. The issue is that in too many cases, procedures are created instead of giving feedback. This way, policies become codified overreactions to situations that are unlikely to happen again. But have the immediate effect of lowering Trust across the people in the organisation.

Actions to Lower the Overall Debt

Building Trust enables running large transformation programs (that might offset the big sources of Organisational Debt we have seen above). Still, it should also allow the implementation of mechanisms that continuously monitor the level of debts and address issues as they form.

1. Job Crafting is identified as one of the main tools to enable the organisation to control its levels of debts. I have already written about Job Design being a pivotal competency to develop for the modern organisation. And here, I definitely see the link with Dignan's statement above. Enabling Job-Crafting by individual workers is the best way to ensure the organisation keeps flexible while enabling energy flourishing across individuals and teams.

2. Establish a Feedback Culture. We have mentioned it several of the debt artefacts are created instead of giving feedback to misbehaving individuals. The best way to prevent this is giving feedback.

3. Constantly keep questioning assumptions behind organisational choices. Whether it is an organisational structure, a policy or a role, keep challening the reason for why it was created in the first place.

4. Practice Participatory Governance. Involving people in the codesign of roles, structures, policies are a formidable way for escaping the junk of debt.

5. Last but not least, hold an Organisational Backlog. Akin to the agile methodology backlog, this will allow taking note of the priorities and all the "shortcuts" taken that need to be refactored over time.

Conclusion

Organisational Debt is a major issue to be considered at the level of an individual organisation and systematically. Similarly to private Debt, the total amount of Debt within a System is an indicator of its health. We all know what happens with countries that have too much Debt. It's not just the risk of default that looms, but the risk of having to act drastically to convey the necessary changes to adapt to markets.

Joined with the epochal change on the Meaning of Work, I see this topic is vital to be understood by all organisations.

What do you think?

Sergio

Cover Photo by Linus Nylund on Unsplash

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4. The (un) Intentional Organisation 😁

Source: Pinterest

5. Keeping in Touch

Don’t hesitate to reach out, either by hitting “reply” to this newsletter directly or using my blog’s contact form. 

I welcome any feedback, both on this newsletter and, in general, on the content of my articles. 

Find me also on:

• Twitter

• Linkedin

• Instagram

• Medium

• Refind

• Flipboard

• GoodReads

• Readwise

I was deeply impressed by the results of the Harvard Business School research on Digital Transformation led by prof. Linda Hill. Ninety-seven per cent of respondents “agreed” or “strongly agreed” that organisations will not remain competitive unless they radically adapt to the demands of the digital era. Yet only 47% believed their organisation has the right competencies to compete in a digital age.

Even more interesting is that the process seems to be a long one: most respondents traced their Digital Transformation journey to at least five years, some also too much more extended periods.

I've mentioned this other times: one of the complexities with Digital Transformation is that we perceive it as going against a moving target. The reason is that we focus too much on the technology side of it. As technology constantly evolves, we see our efforts vanishing if confronted with the speed at which innovation runs. Five years ago, we barely talked about micro-service architecture. Today, we're fully into a distributed blockchain.

Evolving Expectations are the Key to Digital Transformation

But technology adaptation alone is not digital transformation. However, a vital component of this transformation that we need to recognise is to build the organisational capability to adapt to new technologies.

The research identifies three key elements that impact businesses and organisations and influence the need and direction of this Digital Transformation.

1. Customer Expectations are evolving. Customers want frictionless end-to-end experiences with companies, even in the B2B setting. But they're not necessarily willing to pay more for this, thanks to the availability of products across global marketplaces.

2. Employee Expectations are gaining ground. Employees have never been core to the transformation efforts of organisations. Decades of outsourcing, off-shoring and cost-cuttings have got us used to the fact that employees have often just been considered a "side-effect" to sacrifice on the altars of efficiency. Today things are different. Talent is scarce in many critical areas to digital transformation, and companies need to consider reskilling efforts for all employees. This gives employees a new bargaining power in their relationship with employers, as recently demonstrated from the increase in attrition numbers.

3. Society is changing expectations as well. For example, there is a renewed attention to the social responsibility of companies across multiple domains and the search for deeper meaning in work by younger generations.

As you see, none of these is about technology. It's about expectations. Which drives to a significant focus that the researchers suggest. Digitally mature organisations can understand these expectations by using data and insights derived from data.

Developing a Data-Informed Culture

Thus developing a culture that is data-informed, not data-driven is a clear distinctive mark. But what does it mean (bold is mine)?

Digitally mature organizations embrace data [...] and use it to make better, faster decisions. However, data informs, not determines, their decisions. Analytics are important, but judgment and critical thinking ultimately set the roadmap. All employees, not just the data scientists, use data to develop new insights and foresight instead of relying on past experience.

This translates into an immediate consideration: developing a data-informed culture is an act of intentionality. It means setting a clear priority for the entire organisation to become digital literate beyond an elected team of analysts. So how do you achieve this?

Step 1: Remove data ownership as a power or status criterion

The first step in resolving a cultural conundrum that deeply affects most organisations today and, as we have seen, is a negative deviation of the hierarchical model. Data and information in most organisations today are highly segregated both horizontally across functional silos and vertically across layers in the bureaucratic pyramid.

Data like all information is Power, and not everyone will embrace this transition easily.

Linda Hill, Digital Transformation: A New Roadmap for Success

Access to Data is a sign of the importance of your functional expertise and the status associated with your level in the organisation. Both elements are, at the same time, cultural and organisational and need to be removed to make room for a new way of intending competency: not by owning the data but rather by using it.

Step 2: Don't make Analytics and Elitist Endeavour.

The importance of Data and Analytics is not new. Many organisations have started to look into this arena some years back, and it's not a mystery that Data Scientists are among the most sought roles on the job market. This is also because, once they recognise the need, most organisations have created a small team, high up in the hierarchy, in isolation, that could swim in their data-lakes in isolation from the business environment.

It's easy to spot these organisations. The data scientists speak jargon that is not understandable by many. The sponsors (i.e. the top executives that created the Data and Analytics unit) constantly talk about their data-driven strategy. Board meetings have long sessions on data that are difficult to understand. Yet the impression is to see one of those medieval kingdoms in Europe where a late Alchemist influenced the courts with the tales of their experiments.

This moves us to the second step: you need to move away from this elitist view of analytics. Although it is senseful to build a data organisation and build specialist competencies around data engineering, it is vital not to restrict the entire data strategy to just a limited number of omniscient.

Step 3: Make data Available and Simple.

The third step starts from considering that if Data is the new oil, it needs to be widely available in the organisation. Functional barriers need to be lifted. Knowledge about Data needs to be expanded across all employees to access data when they need to make a decision.

This means thinking about the accessibility of data and the simplicity of the concepts behind it. Careful: this does not mean that we ask each individual to develop their own analytics. This is another relic of the past: as many organisations built their last technological transformations around different ERP versions, most teams set their own analytical skills. This is because reporting was seen as a mere transactional focus. Data access was also technically challenging, which led to the proliferation of Excel as a management tool, with every department running its little dashboard and its little empire of segregated knowledge.

That's why I think simplicity is the key. Modern data access tools are all about visualisation and decision-making support. With the proper upskilling, all workers can easily access data and use it in their daily activities.

Step 4: Ensure Trust

The last and most vital step to achieving a Data-Informed culture is that people in your organisation Trust the Data.

I've seen it many times. You present a new project idea, a new product, a new service. You have data to support it. Somebody in the room, often a manager of another department, challenges you not on the idea but the data. This usually happens with HR, as it's a profession not seen as capable of dealing with numbers.

Building trust around the Data means addressing all the three steps above at the cultural level. Removing information-linked status often means removing the idea that a specific set of Data is associated with a source that ensures its quality through ownership. Thus you need to move to a culture where Data is owned collectively and every person feels responsible for data quality. The garbage-in garbage-out issues become a problem that every employee is willing to tackle.

Removing the elitist view means that employees need to be equipped with new skills to understand data and aggregated information. We have seen with the recent pandemic how difficult it has been for people to cope with basic statistic concepts such as exponential growth. Data Literacy needs to be built through learning, exposure and constant nurturing of the tools to enable these new competencies.

Finally, Availability and Simplicity call for a more substantial consideration of the autonomy of employees to work with data. Let me give an example. Many organisations restrict access to Data based on data protection, privacy or data-security considerations. Locking data away, however, is not the solution. Instead, you need to train people on how to use data securely. Moving from control to autonomy is a culture change that is not to be underestimated and is at the core of the self-management efforts that many organisations are doing at the heart of their transformations.

Becoming a Deliberately Data-Informed Organisation

The above steps make it easy to understand that the journey to Digital Transformation is not about technology. It's about profoundly restructuring the fabric itself of your Organisational Model and making it coherent with a new Business Model where Data is pivotal, a new Operating Model where data informs each step of your Value-Chain, a Strategy where data tells every decision step, which calls for a Leadership that works with data, and a Corporate Culture that is built around renewed concepts of Autonomy and Trust.

Being a Data-Informed Organisation means nurturing all levels of your organisation with Data that can Trusted and the Autonomy to decide when and how to use this Data.

Are you ready to start this journey? If so, then you are prepared to achieve your Digital Transformation.

What do you think?

Sergio

Cover Photo by Alexander Sinn on Unsplash

References

Here below are the links to the two articles already issued. A third is underway.

Digital transformation seems like a journey without end, but many companies are forging ahead. Linda Hill and colleagues reveal six qualities that set digitally mature organizations apart.

Is your company reaping the rewards of digital transformation yet? Linda Hill and colleagues offer seven guiding principles for transformations at any stage—nascent, progressing, or stalled.

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