Organization is a process, not a structure
May 6, 2012
The way in which companies organize themselves and define their internal boundaries has essentially been determined by the way in which communication between people is planned and transfer of information is designed. The classic hierarchical structure was based on the assumption that a manager or worker could have rich interaction and exchange of information only with a limited number of predetermined people. A narrowing of interaction always marked operational boundaries. Thus you did not want people to cross functional silos. This was the infamous trade-off between richness and reach.
An increasing number of companies trying to become social businesses are now becoming aware of the technical barriers and structural bottlenecks that hinder or totally prevent cooperation that is not planned in advance.
It is time to rethink. Rather than thinking of organization as an imposed structure, plan or design, organization arises from the interactions of interdependent individuals who need to come together.
The accumulating failures of attempts at organizational agility can be traced to the fundamental but mistaken assumption that organizations are structures that guide and, as a consequence, limit interaction. An organization as a structure is a seventeenth century notion from a time when philosophers began to describe the universe as a giant piece of clockwork. Our beliefs in prediction and organizational design originate from these same ideas.
A different ideal is emerging today. We want to be agile and resilient and we want to learn effectively and fast. The tension of our time is that we want our firms to be flexible and creative but we only know how to treat them as systems of boxes (or network nodes, where the shapes are round instead of square), with a fixed number of lines between them.
It is time to change the way we think about organizations. It is not about hierarchies vs. networks, but about a much deeper change. Organizations are creative, responsive processes and emergent patterns in time. All creative, responsive processes have the capacity to constantly self-organize and re-organize all the time. Change is not a problem or anomaly. Change is the organizing input rather than the typical managerial re-design process. All solutions are always temporary.
Gregory Bateson wrote: “information is a difference which makes a difference”. Information is the energy of organizing. When information is transparent to everybody, people can organize effectively around changes and differences, around customers, new technologies and competitors.
What we have still not understood is that people need to have access to information that no one could predict they would want to know. Even they themselves did not know they needed it – before they needed it. Thus an organization can never be fully planned in advance. When information is transparent, different people see different things and new interdependencies are created, thus changing the organization. The context matters more than ever. The easier the access that people have to one another and to (different) information is, the more possibilities there are.
We seek organization, but organization is a continuous process, not a structure.
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Thank you Ken Gergen for a great evening and great conversations
More on Gregory Bateson. On social business. Narrative work.
The idea of co-working spaces
February 4, 2012
Although work today is primarily digital, most organizations still have a spatial dimension, and most of those spaces have a designated organizational role. Even in the digital age we still think in terms of space. The key thing is that both the organizational structure and space greatly influence the patterns of work. A few years ago, the typical organizational design meant that work was divided into multiple parts that were simply added together to create the product. Individual workers did not need to know much more than what was specific to their individual tasks to complete their jobs.
Today, the results of work are not brought together at the end but are communicated throughout the process. A growing number of people are involved in generating ideas and information and bringing those ideas together in collaborative sense making. Work is interaction. Communication is not talking about work. Communication is work.
There are three archetypes of communication in firms. The first type is communication for responsiveness and coordination. This creates the need for transparency. The right hand knows what the left is doing. The second type is asymmetric following. It is about a Twitter type of information sharing to help people keep up with new developments. The third type is serendipitous inspiration. It is spontaneous and helps people to come upon the unexpected. The third type of interaction often occurs between people who work on different things and draw on different disciplines. These people don’t often meet in traditional work arrangements. They don’t normally have a lot to do with each other.
Most managers will acknowledge the role played by the organizational structure, but few understand that physical space is equally important. Structure and space both influence how we work and where communication takes place when we meet.
The goal is paradoxically to increase the value of work and at the same time save costs. This means that you can expect to see more of the clubhouse type of co-working spaces. Clubs are places where only members and their guests are allowed in. The rooms are defined according to a function, such as eating, reading, and meeting. These rooms are open to all, rather than being assigned to a single worker. You can book a more private room for a specific purpose, but in a clubhouse, you cannot put your name on the door.
Members of future organizations will use these new co-working spaces for networking and for concentrated individual work but they are not going to have spaces to fill with their personal belongings.
Many people bemoan the loss of a personal designated space. However, I believe that they are going to learn to appreciate the value of freedom of choice and the escape from the control system of being seen in the office nine-to-five.
If you are in the middle of a conversation with someone, you seldom pause to talk about the conversation itself. But today, it is time to pause and consider how we work together and where we meet to do that. Although work is digital, we are still going to meet, also physically!
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The inspiration for writing this came from meeting my good friend @elsua face-to-face for the first time a few days ago. Thank you @villepeltola and @sakuidealist
Advice on how to manage off-site workers
New structures – new designs
January 29, 2012
When we think about business structures, many of us picture an organizational chart or the layout of an office building. A structure often refers to the physical arrangement of things, the parts making the whole. What we have missed so far is an understanding of the business structures that can foster faster learning and help us work better with information. Conventional structures don’t address knowledge-related challenges as effectively as they do problems of measuring input and output or accountability.
What social media have helped us to do is to link and coordinate unconnected activities or initiatives addressing a similar information domain. There have also been great successes in diagnosing recurring business problems whose root causes cross unit boundaries. We know that the problems we face today are too complex to be managed by one person or one unit. It requires more than one brain, one point of view, to solve them.
Sharing a practice or sharing an information domain requires regular interaction. Work is interaction and the new business structures should be built on interdependence and communication.
Almost all business communities started among people who worked at the same place or lived nearby. But co-location is not necessary any more. The Internet has changed that. Interdependent people forming a community can be distributed over wide areas. What then allows people to work together is not the choice of a specific form of communication, face-to-face as opposed to email or social platforms, but the existence of a shared practice, a common set of situations. What lies at the core of those situations is the need for different perspectives requiring interaction.
When you design for live interaction, you cannot dictate it. You cannot design it in the traditional sense of specifying a structure or a process and then implementing it. As many have experienced, communities seldom grow beyond the group that initiated the conversation, because they fail to attract enough participants. Many business communities also fall apart soon after their launch because they don’t have the energy to sustain themselves.
Communities, unlike business units need to continuously invite the interaction that makes them alive.
Community design is closer to iterative learning than traditional organizational design. Live communities reflect and redesign themselves throughout their life cycle. The design should always start with very light structures and very few elements.
What is also different is that good community architecture invites many kinds of participation. We used to think that we should encourage all the community members to participate equally. Now we know that a large portion of the network members are and should be peripheral. In a traditional meeting we would consider this type of participation half-hearted, but in a network a large portion of the members are always peripheral and rarely contribute. Because the boundaries of a live community are always fluid, even those on the outer edges can become involved for a time as the focus shifts to their area of particular interest.
Because conversations and communities need to be alive to create value, we need an approach to management that appreciates passion, relationships and voluntary participation. Rather than focusing on accountability, community design should concentrate on energizing, enriching participation.
The new structures and new designs are about communities continuously organizing themselves around shared information, shared interests and shared practices. Business is about doing meaningful things with meaningful people in a meaningful way.
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More: “Lead like the great conductors“
Attention blindness and the social business
November 26, 2011
Cathy N. Davidson has studied the way we make sense and think. Her claim is that we often end with problems when we tackle important issues together. This happens “not because the other side is wrong but because both sides are right in what they see, but neither can see what the other does”. In normal daily conditions, it may be that we don’t even know that other perspectives other than our own exist. We believe we see the whole picture from our point of view and have all the facts. Focus however means selection and selection means blind spots leading to (attention) blindness. We have a partial view that we take as the full picture.
This is one of the reasons why people in companies are often stuck in narrow, repetitive and negative patterns that provide them with numbing, repressive and even neurotic experiences.
The opportunity provided by social tools lies in the widening and deepening of communication, leading to new voices taking part and new conversations that cross organizational units and stale process charts.
According to Cathy Davidson, attention blindness is the fundamental structuring principle of the brain. Attention blindness is also the fundamental structuring principle of our organizations and our political system. We see and understand things selectively.
Knowing in the brain is a set of neural connections that correspond to our patterns of communication. The challenge is to see the filters and linkages as communication patterns that either keep us stuck or open up new possibilities.
The opportunity lies in the fact that as we don’t all select the same things, we don’t all miss the same things. If we can pool our insights we can thrive in the complex world we live in. In this way of thinking, we leave behind the notion of the self-governing, independent individual for a different notion, of interdependent people whose identities are established in interaction with each other.
From this perspective, individual change cannot be separated from changes in the groups to which an individual belongs. And changes in the groups don’t take place without the individuals changing.
Our attention is a result of the filters we use. These filters can be a mix of habits, company processes, organizational charts or tools. Increasingly these filters are social. They are the people we recognize as experts. Our most valuable guides to useful bits of insight are trusted people whose activities we can follow in real time to help us enrich our views.
Management research has focused on the leadership attributes of an individual. Leading and following in the traditional corporate sense have seen the leader making people follow him through motivation and rewards. The leader also decided who the followers should be.
Leading and following when seen as a relationship, not as attributes of individuals, have a very different dynamic. Leading in this new sense is not position-based, but recognition-based. People, the followers, also decide. The leader is someone people trust to be at the forefront in an area, which is temporally meaningful for them.
People recognize as the leader someone who inspires, energizes and empowers them.
Another huge difference from traditional management is that because of the diversity of contexts people link to, there can never be just one boss. Thus, an individual always has many “leaders” that she follows. You might even claim that from the point of view taken here, it is highly problematic if a person only has one leader. It would mean attention blindness as a default state.
We are now at the very beginning of understanding leadership in the new contextual, temporal framework. The relational processes of leading and following should be seen as temporary, responsive activity streams, not only on the Internet but also inside companies. They are manifested as internal (Twitter) feeds, (Facebook) updates and blog posts from the people you associate with.
Richer, more challenging, more exploratory conversations leave people feeling more alive, more inspired and capable of far more creative and effective action.
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Thank you Cathy N. Davidson and Doug Griffin
Start-ups in the networked information economy
September 6, 2011
Corporations are the dominant mechanism by which economic activity is organized in developed countries. Whether there are opportunities for leaner and more agile approaches to value creation in the corporate context, is hence a key question for the prosperity and well-being in the society.
The big move we are in the midst of is towards an economy that is more centered on information products than physical products. Examples of this are financial services, professional services in general and software.
The second transformative change is global access to relatively cheap and relatively high quality communication networks.
New communication technologies have always had a strong impact on the production of information. But this time the societal changes are huge. The Internet is the first communication environment that decentralizes the financial capital requirements of producing information. Much of the capital is not only distributed but also largely owned by the end users. Network servers are not very different from the computers we have at home. This is a complete departure from the model of TV broadcast stations and televisions.
The characteristics of the new economy are different from what we are used to: the production of physical goods was (financial) capital-intensive, leading to centralized management structures and the shareholder capitalism we now experience. The production of information goods always requires more human capital than financial capital. It is much more about finding brains than finding money. But the good news is that you are not limited to the local supply. Work on information products does not need to be co-located. If the task at hand is inviting and compelling, human capital investments can come from any part of the network.
This is why decentralized action plays a much more important role today than ever before. The architecture of work is the network and the basic unit of work is not a process or a job role but a task.
Our management and organizational approaches are derived from the era of tangible goods production and high-cost/low-quality communications. These mindsets are not helpful in a world of widely distributed value creation and ubiquitous connectivity.
The opportunity is in new relational forms that don’t mimic the governance models of industrial, hierarchical firms. We are already witnessing the rise of very large-scale collaborative efforts that create tremendous value. Coordinated value in these cases is the result of uncoordinated actions by a large number of individuals with different goals, different values and different motivations to take part.
The financial capital constraints on action meant that having a great idea, or simply wanting to do something, was not enough to get one going and trying it out. In the networked economy, information products can now be created and co-created in a human-centric way, by interdependent individuals, interacting with each other by utilizing free or low cost social media.
Technology does not determine social and organizational change, but it does create new opportunity spaces for new social practices. Some things are becoming much easier than before and some things are becoming possible, perhaps for the first time.
Pitching in the world that is built on the centrality of information and radical decentralization of intelligence may be more about justifying human capital investments than justifying financial investments. Perhaps start-ups in the future won’t even seek to create jobs at all because of their industrial-era nature, but may see themselves as platforms for all kinds of contributions from all over the network they are an active part of.
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Thank you Margaret Blair and Yochai Benkler
More on the subject: The work of Yochai Benkler. The Atlantic on progress in life and job careers. A TED video on unintended consequences. Steve Blank´s great post on start-ups. Irving Wladawsky-Berger´s post on new style of working. Luis Suarez writing about the social enterprise. GigaOM: Do we need defined hours of work any more? The Atlantic: A Jobs Plan for the Post-Cubicle Economy. “From a container to a platform”; @Joi Ito’s blog post @ the MIT Media Lab. A very nice Cisco ad.
The real Enterprise 2.0
April 30, 2010
Lenin famously said that the economic system in Russia would be run as one big factory. Many economists at the time said that this was impossible. Yet there were already big factories in the West then, and there still are, so why not? Is there a limit to the size of a factory that cannot be surpassed, or is it because the factory logic cannot be used outside of a real factory?
The typical hierarchical form of an organization is meant to simplify communication, accountability and the coordination of tasks. In theory an employee needs only one connection, to the boss. This is far easier than communicating with all and trying to coordinate actions with everyone. And what about accountability? The worker is accountable only to her manager. That manager reports to her manager on the next higher rank, and the chain goes further, leading in the end to – Lenin.
During the centuries since the publication of “The Wealth of Nations” by Adam Smith, in 1776, the principal theme of most economists has been that government regulation or centralized planning were not necessary in order to make an economic system function well. The coordination would be the result of markets. Lenin and the communists were advised to move to a market economy. The parties in that system follow their own self-interest and are governed, when it comes to the actual choices they make, by a system of prices. This is the polar opposite of centralized planning. Adam Smith was a proponent of extreme decentralization.
A 21-year-old comes out with a revolutionary new theory
Ronald Coase was one of the first economists who started to question mainstream thinking in economics. If a system of prices and competition would do all the coordination necessary, why did we have centralized planning, not only in the now bygone communist countries, but also in well functioning and successful firms? Why did we need management, whose function was to coordinate?
Ronald Coase set out to bring the different views together. It is almost impossible now to fathom that he found the answer as early as during the summer of 1932, at the age of 21. He realized that there were costs involved in using the pricing mechanism. The needs and offerings have to find one another. The prices have to be discovered. Negotiations need to be undertaken. Contracts have to be made. There may be disputes that later have to be settled. These costs were not part of “the invisible hand” equation of Adam Smith. Ronald Coase called these costs transaction costs.
The first revolutionary argument was that a firm would emerge, exist and continue to exist successfully only if it performed its planning, coordination and management functions at a lower cost than would be incurred by means of market transactions, and also at a lower cost than would apply if the same things could be performed by another firm.
The second revolutionary argument was that a well-functioning economic system needs both markets and planning. This depends on the size of the organization and the level of the market side transaction costs. Increasing the size increases (internal) transaction costs. Running an organization is difficult and running a bigger organization is more difficult.
Management is an overhead
Managerial overhead increases as the organization grows. Management, communication and coordination are all transaction costs. Every sales call, every offer, every agreement and every meeting also consumes limited resources and increases transaction costs.
As the corporation grows, all its energy finally goes into maintaining the corporation and does not benefit external stakeholders.
Whenever transaction costs inside the organization reach the level of the transaction costs in the markets, markets outperform firms and outperform central planning/coordination in general. This was the main theoretical argument against Lenin. The same thing is clearly still evident today in companies like GM, or organizations like large health care units.
Communist countries learned their lesson, but we still haven’t.
An organization can only be successful when the costs of hierarchical coordination are lower than the gains achieved from that coordination.
The existence of high transaction costs outside of firms leads to the emergence of the firm as we know it, and management as we know it. A large part of corporate economic activity is designed to accomplish what high market transaction costs prevented earlier.
The Internet is an extinction-level event for the traditional firm
If the (transaction)costs of exchanging value in the society at large go down drastically, the form and logic of economic and organizational entities also change! Accordingly, a very different kind of management is needed.
Today, with social media, we stand on the threshold of an economy where the fundamental processes of communication and coordination are being transformed. Familiar economic entities are becoming increasingly irrelevant as the Internet, not the traditional organization, becomes the most efficient means to communicate, coordinate and exchange value.
For most of the developed world, hierarchies, as much as markets, make up the dominant economic pattern. The Internet is nothing less than an extinction-level event for the traditional firm. The Internet makes it possible to create new forms of value creation and new forms of value exchange.
It changes our views of markets and hierarchies in ways that Adam Smith or Lenin could never have imagined.
Thank you @cshirky
The agile organization
January 14, 2010
The management approach to getting something done is to create an organization. If something new and different needs to be done, a new and different kind of organizational form needs to be put into effect. Changing the lines of accountability and reporting is the epitome of change in firms. When a new manager enters the picture, the organizational outline is very often changed into a “new” organization. But does changing the organization really change what is done? Does the change actually change anything?
An organization is metaphorically a picture of walls defining who is inside and who is outside a particular box. Who is included and who is excluded. Who we are and who they are. This way of thinking was fine in repetitive work where it was relatively easy to define what needed to be done and by whom as a definition of the quantity of labour and quality of capabilities. As a result, communication design created two things: the process chart and reporting lines.
In creative, knowledge based work it is increasingly difficult to know the best mix of capabilities and tasks in advance. In many firms reporting routines are the least important part of communication. Much more flexibility than the process maps allow is needed. Interdependence between peers involves, almost by default, crossing boundaries. The walls seem to be in the wrong position or in the way making work harder to do. What then is the use of the organizational theatre when it is literally impossible to define the “organization” before we actually do something?
What if the organization really should be an ongoing process of emergent self-organizing? Instead of thinking about the organization let’s think about organizing. If we take this view we don’t think about walls but we think about what we do and how groups are formed around what is actually going on or what should be going on. The role of management is then to define tasks and outcomes but not to say who does what. The new task for managers is to make possible a very easy and very fast emergent formation of groups and to make it as easy as possible for the best contributions from the whole network to find the applicable tasks, without knowing beforehand who knows.
The focal point in organizing is not the organizational entity one belongs to, or the manager one reports to, but the reason that brings people together. What activities and tasks unite us? What is the cause for interdependence and group formation? My friend Jyri Engeström calls this a social object. My understanding of “social object” as an idea is more derived from the work of George Herbert Mead and my friend and mentor Doug Griffin. Because of this different background, a social object, in my vocabulary, is more often called a context or even an attractor. Although the word attractor has a different and very specific meaning in the sciences of complexity, I like the picture of an organization without walls, rather like magnetic fields defined by gradually fading rings of attraction.
These contexts create transparent, permeable boundaries between them, not walls. Instead of the topology or organizational boxes that are often the visual representation of work, the architecture of work is a live social graph of interdependence and accountability. Our thinking about organizations is very much based on the old expensive and low-quality communication. The reality today is very different. Communication as the key driver in organizing is both high-quality and cheap. One of the biggest promises of social media is easy and efficient group formation! It is just our thinking that is in the way of bringing down the walls.
Digitaalinen työ, tietoverkot ja johtaminen
December 8, 2009
Liikkeenjohdossa ei yleensä puhuta siitä mitä tapahtuu, vaan siitä mitä pitäisi tapahtua tai mitä on tapahtunut. Sille, mitä juuri nyt tapahtuu ei tavallisesti anneta aikaa. Mutta mitä jos juuri ajalla ja paikalla onkin huomattavasti enemmän merkitystä kuin olemme ymmärtäneet? Mitä jos toiminnan tuloksellisuus onkin merkittävällä tavalla kiinni intensiivisestä läsnäolosta juuri siinä tilanteessa missä ollaan? Mitä jos kontekstiherkkyys ja siitä nouseva ketteryys ovatkin liikkeenjohtamisessa huomattavasti tärkeämpiä asioita kuin aika- ja paikkariippumattomat yleistykset menestykseen johtavista kausaliteeteista? Mitä jos toiminnalla on aina parasta ennen päiväys? Mitä jos jälkikäteen tapahtuvalla mittamisella ei voi ymmärtää sitä mitä tapahtui, puhumattakaan siitä, että toimintaa voisi tehokkasti ohjata mittareilla? Mitä jos tärkeintä on intensiivisempi osallistuminen tilannetta rikastavalla tavalla?
Organisaatioiden toiminta on toisistaan riippuvaisten ihmisten vuorovaikutusta. Vuorovaikutus on aina kontekstisidonnaista. Se tapahtuu aina ajassa ja paikassa, kontekstissa. Tässä vuorovaikutuksessa ihmiset sekä mahdollistavat asioita toisilleen että rajoittavat toisiaan. Samaten kontekstisidonnaisesti kutsumme ihmisiä mukaan, mahdollistamme osallistumisen tai jätämme ihmisiä ulkopuolelle, suljemme pois. Vallankäyttö verkostoissa perustuu juuri näihin muuttujiin: mahdollistamiseen – rajoittamiseen sekä mukaan kutsumiseen – pois sulkemiseen.
Johtaminen on vaikuttamista, joka tapahtuu kommunikaatiossa. Tämän johdosta johtajaa ei voi nähdä erillisenä, ulkopuolisena vuorovaikutuksen arkkitehtina, suunnittelijana. Ainoa mahdollisuus vaikuttaa on kommunikaation kautta – siihen osallistumalla. Johtajan tapa osallistua vuorovaikutukseen selittääkin merkittävällä tavalla organisaation menestystä tai menestymättömyyttä tänään. Johtaja on erityisen näkyvä ja arvovaltainen osallistuja kommunikaatiossa. Johtajalla on myös erityisen suuret valtuudet mahdollistaa asioita, jotka eivät muuten olisi mahdollisia tai kutsua mukaan vuorovaikutukseen tavalla, joka ei olisi kaikille mahdollista. Käänteisesti voimme kuvitella johtamisotteen, joka pelkästään rajoittaa tai estää osallistumista.
Johtaminen verkoston suhteiden ominaisuutena
Yhtä lailla kuin puhumme johtajasta vuorovaikutuksessa, meidän tulisi nähdä, että mahdollistamme ja rajoitamme toisiamme kaikissa suhteissa koko ajan. Johtaminen onkin suhteiden ja vuorovaikutuksen ominaisuus verkostossa yhtä lailla tai jopa enemmän kuin (johtaja)yksilön ominaisuus asemalähtöisesti.
Johtamista tuleekin tarkastella verkoston toiminnassa yhtä paljon tai jopa ensisijaisesti kun pyrimme ymmärtämään johtamista tänään. Vaikuttaminen ei ole vain aseman kautta syntyvä mahdollisuus. Verkostossa tapahtuukin aina paljon enemmän johtamista, ja harhaanjohtamista, kuin mihin esimies voi tai ehtii osallistua. Mielipiteet, joille annetaan arvoa, vaikuttavat samalla tavalla kuin mihin vaikuttaja asemastaan käsin pystyy.
Johtaminen vaikuttamisena syntyy samanaikaisesti johtajan suhteena alaiseen ja alaisen suhteena johtajaan. Esimiehen arvostus alaista kohtaan ja alaisen arvostus esimiestä kohtaan tarvitaan samanaikaisesti. Alainen tekee johtajan hyvin samalla tavalla kuin olemme ajatelleet johtajan tekevän alaisen. Esimies ei voi enää olla esimies ilman, että alainen haluaa olla alainen. Kielenkäyttömme liittyen vaikuttamiseen verkostossa on kuitenkin liian kapea ja stereotyyppinen. Kuvittelemme, että siinä on vain kahdenlaisia toimijoita: esimiehiä ja alaisia. Meiltä puuttuu sanoja, jotka paremmin selittäisivät verkoston toimintaa ja siinä tapahtuvaa vaikuttamista, johtamista ohi esimies – alaissuhteen.
Vuorovaikutuksen laatu
Kun ymmärrämme organisaatiot toisiaan tarvitsevien ihmisten vuorovaikutuksena kääntyy huomio vuorovaikutuksen laatuun. Johtamisessa korostuu tänään luovuuden ihanne. Vuorovaikutuksessa se tarkoittaa, että ihmiset hakeutuvat kohti niitä, jotka pystyvät luomaan merkityksiä syntyville, vielä epäselville, nouseville, uusille teemoille. Johtaja on silloin henkilö joka pystyy artikuloimaan sen, millä ei ole vielä hahmoa muiden mielessä. Käyttäessäni sanaa johtaja tarkoitan sekä mahdollisuutta vaikuttaa asemavallasta käsin että mahdollisuutta hajautettuun, emergenttiin vaikuttamiseen. Johtaja luovassa työssä on vastaavasti hän joka pystyy kestämään epävarmuutta kauemmin kuin muut ja hän joka mahdollistaa suuremman riskinoton luottamusta lisäämällä kuin muut.
Johtaminen tarkoittaa myös toistuviksi ja kapeiksi muuttuneiden aiheiden uudelleen määrittelyä vuorovaikutuksessa. Kaikki ihmisten välinen toiminta on kommunikaatiota. Johtaminen parhaimmillaan syventää, laajentaa ja rikastaa vuorovaikutusta. Tämä on erityisen tärkeää organisaation pyrkiessä parantamaan tuottavuutta, tai tilanteessa jossa vanhentuneet, liian kauan jatkuneet toimintamallit ovat kriisiytyneet. Tarkasteltaessa kriisiytynyttä tilannetta, on hyvin tavallista huomata, että vuorovaikutus on joko loppunut, sitä ei ole ollutkaan, tai se on kapeaa, samoja asioita neuroottisesti toistavaa ja samaa kehää kiertävää uudelleen ja uudelleen. Dominoiva osallistuja myös vaientaa helposti keskustelun ja siten jumiuttaa organisaation paikalleen. Johtajan tärkeä tehtävä on saada paikalleen juuttunut tilanne liikkeelle tuomalla vuorovaikutukseen uusia elementtejä tai kutsumalla mukaan uusia näkökulmia.
Tietoverkko mahdollistaa jatkuvan organisoitumisen ajassa
Toisiaan tarvitsevien ihmisten vuorovaikutus on yhä useammin perinteisiä rajoja ylittävää. Toisiaan tarvitsevuus ei ole ainoastaan fyysisesti paikallista. Tietoverkkopohjainen vuorovaikutus määrittelee uudelleen aikaisemmin fyysisesti paikallisen vuorovaikutuksen digitaalisesti kontekstuaaliseksi ja sitä kautta määrittelee myös uudelleen sen mistä puhutaan, kun puhutaan kilpailukykyisestä toimijasta globaalissa kilpailussa. Ei ole välttämättä hedelmällistä nähdä maata kilpailemassa muita maita vastaan, tai puhua monoliittisesta yrityksestä kilpailemassa muita yrityksiä vastaan. Vaihtoehtona voisi olla kilpailun ja yhteistyöverkostojen jatkuva dynaaminen, ketterä muodostuminen. Tavoitteena olisi nähdä elinvoimainen toiminta jatkuvana, joustavana organisoitumisena ajassa, jossa vuorovaikutukseen osallistuvat muodostavat koko ajan muuttuvia, eläviä ryhmiä digitaalisessa verkossa ja sitä kautta koko ajan muuttuvan ja kehittyvän hahmon ja elinvoimaisen, dynaamisen identiteetin.
Interactive value creation
December 4, 2009
The division of labor reduces organizational effort and the cost of work. The division of labor also increases the quality of efforts through specialization. For this reason all societies and all enterprises are heading, at least to some extent, towards specialism. The assumption has been that the further the division is carried, the greater are the savings and the better the quality of the contributions. This has led managers to focus on the efficiency of activities separated from other activities and organizational design and management are seen as the planning and execution of a collection of independent activities forming the organizational system.
The function of the line manager was accordingly to be the representative of his box, his domain of action and resources. The manager enjoyed a high degree of autonomy and was accountable only for that domain. The grounding principle in practice was: “Don’t tread on my grass, and I won’t tread on yours”.
From action to interaction
As demands for higher value and creativity are the norm today and the complexity of offerings has grown, we have begun to see that the division of labor has reached its point of diminishing returns. What managers have learnt is that the division of labor always implies a scheme of interaction by which the different divided activities are made to work together. The lines between the boxes are starting to matter more than the boxes! Complex value creation is impossible without interaction. This is because any higher-value activity involves complementary, often parallel, contributions from more than one person or one team. In fact, the more complex the offering is and the more specialized the resources needed, the greater the demand for the amount, quality and efficiency of communication, because of the inherent interdependence of the activities.
One-dimensional approaches to interaction have involved top-down command-and-control or sequential workflow-based communication, where the action of one part is meant to set off the action of another. Interaction has thus been seen as one-way signals, a system of senders and receivers (Shannon and Weaver 1948). These approaches seemed to work in simple, low-value environments, but are not creating the desired results any more. What managers have lately found out is that in the pursuit of higher value and when facing the growing demands of complex offerings the value of actions is limited by the value of the interaction. The two are mutually dependent
Activities and interaction are mutually dependent
A system of partial activities that go into the completion of the total offering always implies a scheme of interaction among the persons concerned. If the scheme of activities changes, even somewhat, the scheme of interaction should change too. As the two are mutually dependent, it means accordingly that if there are changes in interaction, so the activities will change.
The mainstream management paradigm is based on the presupposition that activities are the independent, governing factors and the scheme of interaction conforms to the planned division of labor as a secondary feature. The organizational structure, as a number of independent activities, comes first. Then an appropriate system of co-ordination and communication is put into effect. If, however, action and interaction are mutually dependent, it means that low-quality interaction leads to activities that are poorer than planned, just as enriching, high-quality interaction may lead to higher-value activities than planned.
We need to understand how the present ways of dividing labor have been historically based on a very different communications environment than the one we are living in at present. The earlier high cost of coordination and communication is the reason behind many of the organizational forms that are taken for granted and which we still experience. The digital world we live in today is totally different when it comes to the transaction costs associated with coordination and communication and allows us to experiment with totally new value creation architectures.
Managing the scheme of interaction – creating a social media/communication strategy
The activity systems and units of activity can no longer be seen as a collection of independent activities and independent high-performing specialists. There are, however, many challenges ahead if we adopt the way of thinking of seeing interaction as the governing factor in organizations. One of the challenges is our language. That is the way we speak about work following the system of subjects and predicates. Our language of work is geared towards handling one independent factor and one dependent factor at a time: “someone is doing something to somebody”. Linear causes and effects, rather than thinking in terms of mutual interdependence and non-linearity, are built into our management speech. And yet, a situation that can be described accurately in terms of linear, rational causes and effects is the least common one in social contexts. An organization consisting of people is always a social network following a different logic – complex causality. Organizations as social activity processes are about interdependent people working in complex interaction.
If we take this view, it means that people and actions are simultaneously forming and being formed by each other at the same time, all the time, in interaction. Instead of thinking in terms of spatial metaphors, of organizational levels, boxes and lines, this explanation focuses attention on how the actions of people create patterns in time following a very different approach to communication than the sender receiver model.
Organizations seen as patterns of interaction
Organizations can be described as patterns of communicative interaction between interdependent individuals. All interacting imposes constraints on those relating, while at the same time enabling those people to do what they could not otherwise do. Supportive, inspirational, energizing and enabling patterns of interaction are the most important raison d´être of working and being together. If we see interaction as the governing factor and see organizations and organizing as relationships between interdependent people, our methods of sense making need to change. Social interaction does not follow linear causality, seen as a system of senders and receivers, but is fundamentally non-linear, responsive and complex. Following this logic, organizations today and information-based value creation in general can only be understood if seen as complex, communicative patterns of mainly digital interaction.
Back from interaction to action
Resource allocation has always been one of the main tasks of management: planning what is to be done by whom and by when. In integrated systems and with homogeneous resources, this allocation can easily be performed top-down and in advance. Planning can take place separately from action. When knowledge resources are the decisive factors of value creation and when work takes place in digital, global, decentralized environments, this top-down process is increasingly inefficient. A manager cannot know who knows best or where the most valuable contributions could come from. The solution has been so far to try to “know what we know”, and, even more importantly, try to “know who knows”. Neither of these approaches has quite fulfilled expectations. Knowledge databases have not met the situational needs of their users. Accordingly, people have not been able to explain what they know to others or even to themselves in a meaningful way
Because of the aforementioned growing needs in daily organizational life a new, different approach has to be adopted. One could even claim that a new mode of knowledge based production is now emerging in, and because of, the digital networked environments. The most important platforms for the new production systems are social media platforms.
This new production method refers to a new economic phenomenon: people from the whole network contribute pieces of their time and expertise to tasks, emergently, according to their interests, availability and experience, working in a transparent, open environment. This method has systemic advantages over traditional production hierarchies when the work in progress is mainly immaterial in nature and the capital investment involved can be distributed. For most knowledge-based products and services, this kind of production is the most efficient method of creating value from a resource allocation point of view.
The system is developed as much in a bottom-up manner as a top-down one. In a top-down system everything is created and provided by the organization to the user. The user has no or very little control over what services, information and people are available to him. Instead of forcing people into predetermined groups in the way groupware does, social media facilitate the natural formation of groups based on spontaneous, contextual needs for interaction. In social media, people affiliate through personal choice and need. Understanding this difference in community formation is crucial for building self-sustaining, dynamic communities.
A Wiki is a typical knowledge production medium, a platform for interdependent people to work in parallel interaction. A Wiki provides the most efficient way for a group of people to contribute, edit and interact with information that is meant to be shared. A Wiki can be seen as a way to create and iterate collective information, thus developing shared iterative learning. It’s about making visible what has been learnt and the road that leads to it. This leads to a better sharing of experiences, use of skills and utilization of the total number of brains in the network.
The primary goals are increasing the value and quality of information and the value and quality of interaction and at the same time lowering the transaction costs associated with information and interaction. Even more importantly, open interaction platforms such as Wikis are a medium for sharing what we would like to know next, where we would like to go, and what we would like to explore. A Wiki is a medium for continuous, creative learning. This thinking is based on a belief that everything can and should develop in iterative interaction among the network of users. In practice it means voicing questions and concerns for others to answer of their own free will: the small deviations, the small questions that we don’t normally pay much attention to or have time to explore. These are, however, the starting points for change, improvements and learning. There is a shift in thinking from sharing what we know to sharing what we don’t know.
All organizations essentially operate like Wikis. Every organization has it’s own language, resulting in a unique, iterative understanding of concepts, terms and ongoing sense making. There is always a lot of information that is continuously evolving in the “encyclopaedia” of an organization. The articles are things like strategies, customer databases, product information and manuals.
Interactive, iterative work
In these kinds of contexts, information artifacts that don’t connect with ongoing live conversations are often of less value, even obsolete and most probably out of date. Because of this, we are now moving away from a focus on content to a focus on conversations. Content should be seen as the by-product of conversation. Perhaps in the future of digital work IT will not mean Information Technologies, but Interaction Technologies.
This view focuses attention on the way in which daily, mainly digitally mediated communication between people organises value creation and, at the same time, creates value. An organisation should today be understood as complex, self-organising, iterative patterns of interaction, through which both continuity and innovation emerge as patterns in time.
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