7th Global Peter Drucker Forum

The Quantified Organisation: people-powered digital transformation
by Lee Bryant

When we first started trying to ‘humanise the enterprise’ using social tools to improve the way firms coordinate work, back in 2003, we believed that just by giving employees the means to connect, collaborate and communicate more freely, we would help firms evolve towards more agile, responsive organisations. But after a decade of helping organisations develop social and collaboration strategies and platforms, the limits of this approach are clear. Cross-cutting networks can achieve a lot, even in firms where power flows orthogonally down the management hierarchy, but to really change the way we work, we need to focus on developing the new organisational capabilities that digital technology has made possible – what I think of as our new superpowers.

 

But we also need to unlearn our approach to organisational change.

 

It is no secret that the default organisational template for today’s corporations is largely based on assumptions and constraints that are no longer valid. Most of us are not reluctant factory workers in need of Taylorist time management to get things done – nor are we educated to prepare us for a particular class of work (manual, admin, management, etc). Thankfully, we also have better tools than the telegraph and the telephone, which means a cascading hierarchy of managers following orders is no longer the only way to co-ordinate work. In fact, rather than driving productivity gains, existing structures, planning cycles and central services are increasingly getting in the way of value creation and innovation.

 

The reason these historic management techniques continue to exist is largely because we have baked them into business education, systems, software and processes, which makes changing them hard. There have always been exceptions, but these have tended to exist in businesses with visionary founders, unburdened by MBA orthodoxy, who have managed to create high-performance organisations based on trust rather than control. More recently, we have seen an explosion of startups which have grown as natively agile, high-technology businesses able to coordinate fast-moving value chains without resorting to bureaucratic management. But even these firms often drift back into classic departmental management as they grow, either through lack of imagination, at the behest of investors who want controllable structures, or perhaps in anticipation of IPO – a process seemingly designed to create dysfunctional organisations.

 

The question is, can we learn from the exceptions and the startups to create tools, techniques and methods that will allow any firm to grow new Twenty First-Century structures around their ossified hierarchies? Can we make agile, networked, human structures the new normal, even in an existing large firm that is largely optimised for the past?

 

Yes we can; but not through traditional change management where the top of the pyramid (perhaps assisted by external consultants) diagnoses the problem, and then cascades down a solution in the form of a new structure, new ‘values’ or other top-down initiatives. The resulting big-bang change projects are expensive and prone to failure, and even where they have an impact, it rarely sustains.

 

As digital transformation moves beyond an early focus on social media marketing and begins to look more seriously at how we transform the organisation itself, we need a better way to manage the change process.

 

We already have some of the methods to achieve this in other areas of digital, such as agile development. Instead of big-bang top-down change projects, we know how to evolve the functionality of an organisation (or a software system) by defining agile user (or job) stories, creating tests for the capabilities we need to develop, and then re-prioritising effort in short sprints defined in response to changing conditions. Whereas a traditional change project might assume it knows exactly what will be needed in the future, and then roll out a pre-planned project to achieve it, an agile approach to change focuses on the organisational capabilities we know the organisation needs to have (even if the overall future operating model is not 100% clear) and takes an iterative approach to developing them.

 

The starting point for managing transformation in this way is organisational self-awareness. Social tools give us the ability to ‘work out loud’ and increase levels of ambient awareness in the workplace; plus, they make it ever easier for people to speak up when they see something broken, or to provide feedback on how things work. But we also have an increasing array of data flowing around organisations, which we can use to construct organisational health measures that let us test for the impact of digital transformation. Conventional thinking on big data assumes that we will use it to monitor individual performance to improve productivity. But what if we also hold up a mirror, and allow people to monitor the performance of the organisational structures and processes they operate within?

 

The best managers already act as supporter leaders, removing barriers and helping solve problems that stand in the way of people getting work done. New ideas like Holacracy formalise this by setting aside a proportion of meeting time to ‘processing tensions’ that stand in the way of people fulfilling their objectives. I would go further and say that if we give people better tools to monitor organisational health and the performance of structures and processes on an ongoing basis, we can encourage ownership of small-scale tweaks and improvements that could add up to a powerful movement of agile transformation. Change becomes routine – a part of everyday management.

 

Digital transformation will be judged by how it equips companies with the capabilities they need to survive and thrive in fast-moving, connected markets characterised by greater volatility and ambiguity. We may not be able to predict precise futures and launch pre-planned change programmes to deal with them, but we are able to develop greater organisational agility and adaptability to respond to change of any kind by leveraging the power of people and social data to improve our structures and practices, rather than just accept them as given.

 

About the author:

Lee Bryant co-founded the pioneering social business firm Headshift, and most recently Post*Shift, a consultancy solving 21st Century organisational challenges, and Shift*Groups, a research and learning community for internal change agents. 

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by Lee Bryant

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