Chapter 6 - The Future of Clever Organizations

In spite of everything, the authors suggest that the organizations of the twenty-first century "will look very much like the organizations of the twentieth century," which in turn look much like the organizations of the nineteenth century. During the course of history there have been very few changes that have revolutionized the structure of organizations, and most have resulted only in slight adjustments to what was already being done.

(EN: It's been mentioned in other sources that even the industrial revolution wasn't that revolutionary to most industries. The change from the hand-loom to the power loom enabled firms to weave more and better quality cloth in less time and with fewer and less skilled workers - but the essence of the textile industry did not change, nor did the structure of cloth-producing organizations.)

There are presently few firms that have become entirely swept up and restructured by the information age, and these are largely companies whose products are related to technologies that did not previously exist. But the groundbreaking technology firms of the present day perform the same function as a group of teenagers in a garage in the 1980s - there are more people doing more work but the productive process is essentially the same.

In manufacturing firms such as textiles, automobiles, food products, and the like, the information age hasn't had much of an impact. There are still people who design the goods, people who manufacture the goods, people who sell the goods, people who perform the same functions as ever - just using better tools and working more efficiently. The tasks may no longer happen under one roof, but they are essentially the same tasks.

So, in all, the notion that the future (particularly the near future) will be radically different from today is a gross overstatement - but at the same time there will be changes. The tasks will be the same, but the way that people are organized and managed to do them will likely undergo some substantial, though not essential, changes.

Pragmatic Organizations

One futurist describes the new organization as being one of "innovative pragmatism." That is to say that the fundamental focus on the organization will not be on doing things more efficiently or in greater volume, but finding different things to do in order to accomplish the same goals. Most obviously, companies will look to leverage the minds of their workers, not merely their hands.

Then, it gets random. The notion is that companies will become more like communities, in which people interact with one another more extensively. Looking to Google, the campus has become a place where employees can do everything except spend the night: it is much the same in terms of the amenities and services provided as a large college campus.

What's lacking now is not an abundance of smart people with innovative ideas, but a lack of people who can coordinate their activities, get them to apply their intelligence to common goals and collaborate in a meaningful way. In that sense, companies will become more like social centers, and managers more like social directors.

The Value of Synthesis

Another futurist considers the various capacities of the human mind, and arrives at the conclusion that synthesis is the only task at which artificial intelligence is, and is likely to remain, far inferior to human intelligence. The artificial intelligence of computers has long surpassed the capabilities of human beings to calculate, to remember, to identify differences, to store and retrieve information, to analyze (with the aid of sensors) sense-data, and to perform an array of other tasks. However, computers have never been capable of "thinking" by deriving meaning from raw data and leveraging the way in which information is related.

(EN: The argument has been made in favor of statistical correlation, but this works only for data that has been quantified - and often, it has been quantified by human intelligence. Proponents of AI have argued that human quantification of input is only necessary if the output must be meaningful to humans, but this is a problematic and rather silly argument.)

For example, consider that the Google search engine, while regarded as far more accurate that its predecessors, still must present users with a list of possible matches and users must rephrase their search terms multiple times to get to the information they are seeking, even when their original query made perfect sense. Even machines that pas the Turing test are programmed, with quite some effort, by humans who instill it with algorithms that echoes some fragment of human logic, and those machines are woefully incapable of passing the test when a conversation leaves a very narrow topic.

The intelligence that is valued in society has already shifted: people who are capable of memorizing and repeating a large volume of information are of lesser value than those who can notice patterns and connections in information they have never before encountered.

And in the present day, even the kind of academic intelligence that enables a person to discover and understand relationships among information is less valued than those with "emotional intelligence" to discover and understand the relationships among people. Consider that the "arrogant genius" who is unable to collaborate with others is less valued, and less valuable to organizations, than people of sub-genius intelligence who are able to pool their efforts and cooperate with a team.

Communication and Collaboration

Communication is expected to be a massive issue for organizations of the future. Already, technology and globalization are supporting operations around the world and workers in remote (and even isolated) locations, such that a team need not be located in a given place. Communicating effectively across distance and differences in culture and language is challenging.

For the clever worker, making himself understood will become more challenging - as specialists often fall into speaking in jargon that few others can understand (particularly those outside their area of specialization), and it is up to leaders to facilitate communication - not merely to suggest that others ought to do it better. At the same time, isolation remains important to the knowledge worker - there is a time for collaboration, and a time to withdraw and think.

There is also a generational difference in communication - channels of preference: older workers prefer face-to-face meetings and phone calls whereas younger ones prefer texting. Not only are younger generations more comfortable with technology, but also with transparency, freely sharing information that their elders would consider indiscreet, both about themselves and their companies, and speaking their mind when they should exercise greater caution and sensitivity. Whether young people should be coached to communicate less or old people to communicate more is a matter of perspective.

In a sense, we can already see the border between work and home eroding - people play at work and work at home, and no longer draw as strong a distinction between their "professional" and "personal" lives, nor the need for separation or opacity.

Free to Do

Innovative companies often take a bottom-up approach to work, in which the decisions are made by the employees and supported and coordinated by management. This model has been extremely successful for innovative companies such as Google. Another innovative practice there is giving employees a full day of free-time each week to work on whatever they want to, without control, to develop ideas.

It's suggested that this works well in western cultures as they are more individualistic. People are capable of working on their own, acting and speaking freely. In other cultures people are culturally disinclined even to express a personal opinion without getting a sense of the group's feelings, and working independently is virtually impossible. (EN: I think this overlooks that freedom to do also means freedom to associate, so people who need groups can assemble them, facilitated by management.)

An example from China is a firm that kicks managers out of staff meetings entirely, which enables employees to be more informal and speak their minds without fearing punishment. As is their preference, they can discuss and socialize ideas before making anyone else aware of them and have the comfort of consensus. Even this takes conscious effort to adapt to practices that run contrary to traditional culture.

There's an aside on "clever optimists" and "clever pessimists" that concludes that it's a balance: one cannot be so optimistic as to believe things will work out for the better, but neither so pessimistic as to believe they will work out for the worse. Innovation requires accepting uncertainty, and being pragmatic

It's suggested that this is likely a model organizations will follow in future, switching from top-down control to bottom-up innovation - whether organizations choose to succeed by adopting this model, or end up failing because they failed to do so. Innovation cannot thrive under rigorous bureaucracies.

Provide Clear and Simple Rules

While giving clever employees plenty of breathing room and shielding them from organizational politics are important, it's important to emphasize that this does not mean allowing them to run entirely wild. They must serve the interests of the organization, and behave in a way that is amenable to the organizational culture, to ensure their efforts are both productive and coordinated, while being aligned with the organization's mission.

All organizations have rules - and it is these rules that define them as an organization. The mission declares what the organization is about and, if only by exclusion, suggests what it is not about. Other rules derive from the core documents of mission, vision, and values. However, may organizations take this to far - over years or decades (or a shorter period of time if they desire) they develop a codex of complicated and sometimes self-contradicting rules, written and unwritten, that seek to ensure employees behave in a way that supports the mission, but which actually become so cumbersome they prevent employees from doing exactly that.

Innovative organizations are rediscovering the need to govern behavior with a light touch - giving employees a direction and guidance in clear and simple terms and discouraging the development of complex codification that provides unnecessary process and procedure to define and enforce.

(EN: This is not as simple as it sounds. Very often the institutionalized employees spin up a cloud of bureaucracy, by attempting to specifically interpret what the simple rules "really mean" and making things unnecessarily complex. This is the reason that a simple change in documents often fails in heavily bureaucratic organizations, as the rats like their maze and the nest they've made in all the red tape.)

Simply stated, "a small number of clear rules can set clever people free." It is important to do so because innovation requires having the space to take risk and tolerance for failure - whereas a rigid organization has so many rules to prevent failure that it also prevents success.

AS such, the future organization will be less rigidly controlled than the organizations of the present, and cultures will evolve to appreciate efforts that are well-intentioned but do not lead to success.

It's suggested that these kinds of organizations will be highly dependent on hiring the right kind of people - those who can be trusted to understand the principles and constrain themselves rather than looking to take advantage. (EN: My sense is most people are this way, and that much corporate control arises from unusual incidents - one guy in 1978 did something really awful, so rules were put in place to prevent anyone from ever doing anything similar again. So all employees are chained down equally.)

It's also suggested that those who regulate organizations must understand the needs of the employees. In many organizations reviews of rules and guiding documents are done not by management, but by the employees who will have to live by the rules they create. This is very wise, as nothing creates divisiveness and conflict more than giving some the authority to set rules for others that they will never themselves have to obey.

Specific reference is made to the Information Technology departments of many firms, which are particularly problematic because the employees are accustomed to working with machines - which follow orders perfectly and have no emotions to consider. Programmers who matriculate into management, in which they no longer do hands-on programming, but set rules and review the work of programmers, are particularly awful.

Generate Meaning

The authors refer to the "moral authority" of leaders, which derives from their concern for the welfare of the organization and shared values. This stands in contrast to the traditional three models of authority that derive from formal authority, rational authority, and charismatic authority.

(EN: I disagree. The misuse of the term "moral" rankles a bit because the will of the majority is not always ethical. Second, they fail to describe quite what they mean - providing some quotes and anecdotes that are too oblique to illustrate the concept.)

One quote comes from a person who recognizes their personal esteem is linked to the esteem of their company. In social settings, people ask what you do and where you work - and whenever you mention your employer, the brand rubs off onto you. If the firm is doing interesting things and is well regarded, you gain and are credited - but when it is in trouble in the news, you lose and are blamed.

(EN: The author stated earlier that many clever people talk about their profession but not their employer, and reading this suggests that this often happens because they are disappointed in their firms, expect others to be disappointed as well, and want to distance themselves to preserve their dignity and integrity.)

It's then suggested that values are not top-down: the executives can issue whatever statements they wish and write lofty vision statements, but when the people of a firm disagree, they do not assist in helping realize that vision, and often regard it as a sarcastic joke that emphasizes the firm's failure rather than success. In essence, there is a "real" culture and a "desired" culture that are not often the same, but there must be a genuine sense that the firm is able and willing to move in the direction of the desired culture.

Management Objectives

The "interface" between manager and subordinates is largely based on proximity: the supervisor could look "down the row" to see everyone at once and keep track of what they were doing - and when work is primarily physical in nature, it's easy to observe the activity in the shop. In the present day, all a supervisor can see are people typing or staring at computer screens, which gives him no sense of what they are working on. Moreover, offices are more open - workers may be roaming about a large campus and some may not be in the physical offices at all.

This requires managers to have a different method of monitoring work, keeping up with what people are doing so he can be apprised of their progress or step in to handle obstacles that may arise. It's also re-mentioned that the manager of knowledge workers may not have sufficient understanding of the nature of their work to be ale to tell what they are doing at all or whether a problem has arisen. Given that knowledge workers solve problems for a living, chances are there is always a problem, and that's entirely normal.

All of this obfuscates traditional management, whose tools and techniques for monitoring workflow have become ineffective and obstructive in the present-day workplace.

The authors have only vague suggestions: that the leader must be supportive of three key elements: personal relationships, mutual purpose, and trust. This is a bit of a waffle, in that the result of this is encouraging positive behavior rather than monitoring and supporting, but it is believed that if you can jeep the smartest people "thinking, talking, and working together" that positive progress will be made.

Really Care

All companies pay lip-service to wanting to be innovative and to have the very best people work for them, but few stand behind those words when it comes time to take action and make decisions, particularly those that have a financial impact to the organization. Clever people are sensitive (perhaps overly so) to disingenuous claims, and they closely compare what you do to what you have said, and stand ready to call you on it when the two don't match. (EN: Employees are not the only ones who have a good nose for fertilizer and little tolerance for manipulation - prospective employees, customers, investors, regulators, and all stakeholders are much more savvy and well-informed in the present day than they have been in the past.)

The closing point the authors attempt to make, in a sort of roundabout and frayed way, is that being innovative takes genuine interest and dedication - firms are not perceived as innovative because they claim to be so, but because they do innovative things. And to do innovative things, a firm must do what it takes to be innovative, primarily in fostering a culture in which the most clever employees are able to contribute their best ideas to an organization that has genuine interest in hearing and executing upon them.