Legacy Vs. Evolutionary OS
The world has changed. So has the working culture. The global marketplace today, is more dynamic and is constantly reinventing itself, at a pace faster than it did merely two decades ago. However, many organizations are still using the same old operating systems that were inherited over a century ago from factories and industries.
Brave New Work (2019) by Aaron Dignan gives a unique perspective to creating and sustaining organizational change. Using case studies and by offering suggestions, the author gives organizations subtle guidelines that can help them move from an outdated OS to a more flexible, human-centered, and open system of functioning.
The Old Traditional OS
The story of the organizational setup began a little after World War II. A field manual commissioned by the director of the agency that later morphed into the CIA laid down guidelines intended to destabilize commerce and communities. It was a manual that ‘waged a war of simple sabotage’. The manual, given to citizens that were friendly with the Allies had a list of actions that interfered with organizations and production, setting up complicated bureaucratic systems, adhering to regulations at all costs, and denying shortcuts that would help speed up the process of decisions, etc.
Looking back, the manual of sabotage seems like a regular workday today! Whether intended or not, this structure of organizations seems like sabotage and is having negative effects on companies.
Firstly, it has affected the lifespan of companies, where a company spending about 60 years on the S&P 500, now has a lifespan of 10 years only.
Secondly, the return on assets – the profit amount a company earns with what it owns – a hard-to-fudge performance metric, has gone down. Thirdly, despite technological advances, the production per hour is lower than it was twenty years ago, signaling a leveling off in production growth.
While economists are scratching their heads over the reasons for these negative effects, for the employees on the ground the answer is always – bureaucracy!
Debt Is Dragging Businesses Down
FAVI, the European auto manufacturer, exports auto parts to China when all other European auto part manufacturers have faced the brunt of Chinese competition. However, FAVI too struggled with bureaucracy earlier.
For example, if a worker manning a machine had to replace worn-out gloves, the worker had to ensue a time-taking bureaucratic process of showing the manager the gloves that issued a permission slip after verification of its wear-and-tear. The worker would then have to wait with the permission slip at the place where gloves were kept to get them, then take the new gloves and then slip back to the manager for signatures.
This process wasted about 30 minutes of a workers time before the new CEO stepped in. If one compares the price of the gloves (5 Euros), to the cost of leaving the machine unmanned for 30 minutes (5 thousand Euros), one can understand the concept of organizational debt.
To simply put it, organizational debt amounts to all the redundant procedures and policies that may have once served a purpose. Often organizational debt is a response to a problem, where policies and procedures are set to rectify it. However, such policies and procedures that are mere attempts of having perfect order lead to disorders, resulting in a number of self-sabotaging rules and regulations affecting organizations negatively.
This fix-with-rules habit is a century old, and breaking it needs understanding.
Assumptions Of Legacy Organizations
Every organization inherits assumptions that guide and underlie the system of working. This traditional, inherited Legacy OS is made up of structures, norms, and practices like performance reviews, budgets, managers that are so prevalent they are almost invisible. Moreover, in the fight between popularity and quality, the popular Legacy OS never gets questioned.
The traditional Legacy OS, born over a century ago, as a result of less efficient factories, a lack of standard instructions for workers, and the idiosyncratic techniques that veteran machinists had. In the system, the novices learned on the job and adopted the techniques and procedures of those above them.
Production was artisanal in nature and slow work was incentivized due to the reduction in per-piece rate if workers increased rates of production. Thus productivity was limited to avoid per-piece rate cuts.
To this mix, Fredrick Winslow Taylor added his measuring experiments that gave birth to the legacy OS and revolutionized the world of work. He measured each and every step in the production process and ascertained exactly how long it should take to produce a given part.
Then he offered workers a substantial raise, albeit with a catch. The 15-30% raise would only be given if the workers did exactly what he said just as he said it. And thus, the foundation of the assumption of the Legacy OS was laid with the sacrifice of employee autonomy – all for higher pay. This OS – where the managers think and the workers execute – was preserved as the business common sense in the following decades.
Complex, Not Complicated!
What is the difference between complicated and complex? Aren’t they synonyms? While mostly they are used synonymously, they indeed have starkly different meanings.
For example, a complicated system refers to a causal system, where its component parts have a cause-effect relationship. For example, if a cog is taken out of a watch, it will stop working. Put it back in its place, the watch will work again. Causal systems are predictable. One can expect the same results. Thus, an automobile engine is an example of a causal system.
Complex systems on the other hand are dispositional. One can guess what they do, but one can never be sure. One can’t simply read a manual to understand how they work. One has to learn to read and understand the quirks of the disposition of these systems. Traffic is an example of a complex system, as is the weather.
The Legacy OS treats organizations like complicated systems, assuming that the ‘right’ rules of work can be scientifically understood. However, the people within an organization are complex. Therefore, one can only hope to manage them, and this is the fundamental issue with the Legacy OS.
Roundabouts, Not Traffic Signals!
Signals and roundabouts were designed to tackle the same complex system – traffic – attempting to maximize smooth traffic flow and minimize accidents. Nevertheless, the underlying assumptions for both systems are very different.
While a traffic signal tells the people what to do – stop at the red and go at the green, roundabouts assume the opposite. The rules of the roundabout are to follow the flow of traffic and yield to those already in the circle. However, navigation in the circle and application of these rules is up to the drivers.
Conceptually, a roundabout is a better organizational system than a traffic signal. They reduce delays in traffic by 89%, reduce fatal collisions by 90%, are fully functional during power cuts, and are more cost-effective by a margin of $5000 to $10000. However, unlike roundabouts, traffic signals are more common in the US, with about over 300,000 traffic signals, versus one roundabout for every 1118 intersections. They are popular because they are the norm. They are familiar and people assume that they are effective.
Legacy OS’s are more like traffic signals – popular, yet not as effective. They are the norm. They assume that people cannot be trusted and need to be told what to do, and be directed.
What if there was a better organizational system? Without categorical rules, hierarchical structures, micromanagement, and mistrust? A system that allowed people to flow freely, use their judgment to navigate complex work issues. What if there was an Evolutionary Organization structure?
Evolutionary Organizations
The concept of Evolutionary Organization, though sensible, is difficult to achieve. Why?
Because it is difficult to shift from a legacy habit to an evolutionary practice! Making the shift to an Evolutionary Organization requires an understanding of two main concepts.
- Complexity Conscious – Evolutionary Organizations are complexity conscious. They are mindful of the complexity of business, as well as global complexity and human complexity.
- People Positive – Evolutionary Organizations believe that when people are empowered, they have the capability of dealing with complexities.
The performance turnaround of the USS Santa Fe under the command of David Marquet is a classic example of these concepts in action.
Before Marquet took over, the USS Santa Fe was known as the worst sub in the fleet. Its turnaround to the best was a result of an unorthodox approach. He encouraged his crew to think about what the decision should be. As the crew got accustomed to his approach, they were able to make rational decisions and shoulder responsibility without needing to blindly follow the chain of command.
He encouraged them to learn and experiment. He decentralized control. He enabled the crew to tackle complex problems with quick solutions. And he encouraged ownership of work.
He applied the concepts of complexity Conscious and People Positive.
There is no rulebook, however, for making the shift from a Legacy OS to an Evolutionary OS. The idea is to fight the dogmatism of the Legacy OS, and hence each organization has to cut its own path.
Structure And Purpose
The concept of Evolutionary Organizations can be applied in different domains. Marquet, for example, successfully applied it to the domain of authority.
Similarly, the largest tomato processor in the world, The Morning star Company applied the concept of Evolutionary Organization to structure. Every year, it asks employees to write a document mapping their responsibilities to their co-workers. The co-workers then review the document, offering improvements where needed, thereby replacing top-down directives with community suggestions.
The company also allows employees to set their own salaries. However, the suggested salaries are also subject to the same review. This change in the structure of the organization has enabled the company to consistently grow in the past 20 years with an average revenue net of over $700 million per year.
Similarly, the Dutch homecare provider Buurtzorg has a core team of about 50 employees that manage a nurse workforce of about 14000. How do they manage it?
They have split the 14000 nurses into teams of 12. These teams manage themselves and take care of everything ranging from recruitment to scheduling. The company functions as a collective of small businesses that work towards the same goal of providing personal and quality home care solutions.
The concept can similarly, be applied to the domain of purpose too. To achieve that, a company has to be conducive to flourishing and human happiness, or eudemonic. Secondly, it should be translatable into concrete tasks.
Tesla’s mission, ‘to accelerate the world’s transition to sustainable energy” is eudaemonic and inspirational, however, because it is vague, it is difficult to translate into action.
Facebook, on the other hand, has developed a system that is both actionable and aspirational. Every six months, the people at Facebook discuss where they want to be in the next 30 years. Then they discuss what can they do in the next six months to bridge the distance between their goal. This exercise helps them to focus on the present while keeping the bigger picture in mind.
Meetings And Membership
The Evolutionary OS can be applied to the domains of meetings and memberships too.
The average employee attends about 62 meetings in a month. The average employee also considers half of these meetings a waste of time. The Evolutionary OS introduces the concept of the meeting moratorium as a veritable practice. In this technique, the organization requires to cancel all meetings for two weeks. While it might seem reckless and impossible, it has certainly helped the author.
In one case the author and a team he worked with decided to discontinue their monthly strategy reviews. This decision led them to save about $3 million per year that was getting wasted on boring, worthless meetings that no one really liked.
Implementing the meeting moratorium helped the author and his team do 18 hours per week, which they took 45 hours per week to achieve in meetings before it was implemented.
The trick is to ascertain the pain points of canceling meetings for two weeks. Where does a meeting help? What does one miss without meetings? While reintroducing meetings one as to ensure that the meeting has a structure and a clear purpose. Without these, the meeting is surely unnecessary.
While applying the Evolutionary OS to the domain of membership, one has to take a look at hiring practices. Who gets to be a member of the organization?
While onboarding a new hire, it is essential to check whether the new employee’s passion and personality match with the environment and the company’s mission. Simultaneously, one has to be careful not to hire a culture fit. An Evolutionary OS needs people who will contribute to the culture of the organization, and not just fit within it. A culture fit almost always results in underperformance later on.
Continuity Of Change
Most leaders look at change as a journey from one point to another. They follow a roadmap, chart out landmarks, and pinpoint a well-defined goal. However, this practice is often misleading.
The truth is that journeys are sequential and assimilative, where the transformation is gradual. Change works in similar ways and isn’t a series of steps marked on a map.
Organizations, thus, need to change the way they change. Rather than the top-down, bureaucratic hierarchy that people are used to, change should be continuous and participatory.
This can be ensured with a technique called looping. It includes three looped stages, where the last stage leads back to the first. The stages are – identifying tensions, proposing practices, and conducting experiments. These loops can happen either on a big or a small scale, slowly or quickly.
For example, a team identifies a ‘tension’ that ‘only the loud voices in the team get heard. To clear this tension, a practice of asking every member of the team ‘how is your mood today?’ at the beginning of the meeting could ensure every person in the meeting is included in the present and has their say.
If this practice doesn’t work, one has to keep proposing practices and conducting experiments until the tension is resolved.
Unfortunately, there is no way to list down every tension encountered in an organization. Neither does one have a list of every practice that works for all tensions, or for all organizations. Each tension is unique as is each organization, simply because it is a complex system. It is mostly a trial and error system, where if each member of the organization accepts and understands that organizations are complex systems, success isn’t unachievable.
Conclusion
The modern corporate structures work on an inherited, hierarchical Legacy OS that aims to control. This controlling system often thwarts success. Corporates should move to an Evolutionary OS, modeled on the concept of roundabouts, where control is reduced and the decision to follow the rules is discretionary.
To implement the Evolutionary OS, organizations should decide to which domain the system should be applied. Finally, changing the way they change is key!