(2021-05-24) Wardley How Organisations Are Changing

Simon Wardley: How organizations are changing. Just over a decade ago, I published the table in figure 1 to describe how organisations were shifting from a traditional form to a set of next generation behaviours. Whilst the table was welcome in some quarters, it was generally met with derision and comments of “this is just for startups”.

I’m glad to say that a decade later, that many have already started their journey to the next generation or at least acknowledge it as their future.

So, given that I’m a glutton for punishment, I thought I’d repeat the whole process again and see if we can’t find a new “next generation” or in other words, a next “next generation”. (See 5GM, esp (2020-09-25) Rao Fifth Generation Management)

the future is already here, it’s just not evenly distributed and hence this is an exercise in finding existing differences in corporate populations and not pontificating cause and effects through technology change to “discover” a future.

Starting with a pattern

we need to understand a basic pattern from mapping known as co-evolution

I’ve outlined the basics of this pattern in figure 2.

To summarise, the evolution of a thing across a state (i.e. custom built to product or product to utility) changes the characteristics of the thing which in turn leads to a new set of novel practices that will in turn evolve, becoming first emerging then good and finally best practice for that more evolved thing

This is best explained with an example.
When compute evolved from products (called “servers”) to a utility (called “cloud”) in 2006, its characteristics changed

Eventually this was given the flag of DevOps — see figure 3.

The evolving technology is the cause of the change.

The practices are different competencies but they do share a common meaning ie. DevOps and ITIL were both architectural practices, just one is more “Next Gen”.

There can be forcing functions to change i.e. today, that is the isolation economy caused by covid-19.

I’ve summarised this all in figure 4: Co-evolution impacts

I italicised the term “Next Gen” in the text above because there is no reason why practices can’t evolve themselves. ITIL could have adapted to the new world but alas we have that tricky issue of inertia and factional mechanics to consider

Back in 2010, when I started the research which resulted in the above traditional vs next generation table, the cause was the shift of compute from product to utility.

Today, we have many areas of technology that are industrialising and even some that had already industrialised but we have just resisted adopting due to existing inertia. The isolation economy caused by covid isn’t so much creating the new but forcing us to overcome our inertia and adopt what already exists Backsliding since 2023?

our first problem in the hunt for the next next generation is to find the target spaces they are operating in

Given these competencies have the same meaning, we need to start by finding the changes in meaning first.

Finding changes in meaning.

In May 2020, I put together a team of 70 volunteers, organised into 11 different groups covering subjects such as defense to healthcare to robotics to immersion

Whilst the teams discussed the changes, I captured any “changes in meaning” that seemed to be highlighted across the groups.

The process is almost like “Derrida in reverse

what we sought to identify recognisable changes of meaning and work backwards to find the change of context. In total, 43 changes of meanings were identified. I then tested these against various other groups to see if they agreed or disagreed

see figure 5.

Once we had stabilised on a common list of meanings, I then asked each of the research groups to provide a list of prototype competencies for each meaning and characterise them as traditional vs next generation

To avoid us going into the world of science fiction, I also asked for examples of next generation practice, even if it was only an experiment being done or a paper written on the subject

Overall, we ended up with a list of over 600 traditional vs next generation practice prototypes.

Narrowing the space.

To narrow down the target space, I asked each of the groups to map out the area that was changing to attempt identify the underlying technology that was causing it.

Figure 6— Examining the underlying technology causing a challenge of orthodoxy in the medical profession. (healthcare)

In the map above, the key technology causes were identified as sensors, collaboration tools and access to data

there are two issues to be mindful of here — timing and impact.

On timing

Throughout history, the most significant cause of change is the industrialization of technology (from product to more commodity / utility).

see when the technology area was considered likely to industrialise

Figure 7— Example time frame test for industrialisation of technology with 101 people.

On impact.

how much impact does a technology change have on the practice?

In the case of DevOps then cloud was fundamental

I created a number of matrix voting structures and asked people to vote on the impact of technology on meaning.

an overall picture of change was created in figure 8.

What the above figure is telling us, is that if there is a significant difference in companies then it’s likely to be found in the change of meanings highlighted in bold i.e. swarming of people, learning, principles and intent, sustainability, incentives etc.

Figure 8 is certainly interesting and gives us our target space — an intersection of technology, changes of meaning and time

Within this target space we already have our examples of traditional vs next generation practice developed by the research group.

Two distinct characteristics had emerged during this time and been identified in our target space. The first was the distinction between being the company being driven by procedures versus the use of guiding principles to run a company.

The second was a tendency towards believing the future of work was more remote first or office first.

We were now ready to run the survey.

The survey would not be a random population but those connected to my twitter steams — the channel through which the survey would be pushed. Whilst this wouldn’t effect the phenotypic characteristics of two different populations (if they existed), it would certainly effect the volume of each of those populations responding

1,000 responses were collected and separated into populations based upon the selecting questions of “procedure vs principle” and “remote vs office”. There were 31 in traditional, 92 in next generation and 867 in the wider “in-between” population.

reasonably state that there are two distinct populations and the in-between companies are evolving from one state to another.

Are they evolving from next generation to traditional or from traditional to next generation?

we can reasonably say that the overall population of companies are evolving to become more next generation like.

I have summarised all these characteristics in figure 13 which represents the behaviours of this next “Next” generation versus the behaviours of the traditional.

In story form:

Traditional Company

Principles are an idea that are rarely stated or enforced. What motivates people in this environment is money.

Next Generation

The company is driven by guiding principles which are often stated and enforced in both recruitment and promotion. Distribution of power to where it is needed matters. Teams will often swarm around problems, leadership is transient in nature and leaders will arise to fit the problem

What motivates people are customer and societal outcomes

Awareness of the market also matters, it is systemic (throughout the organisation)

To train people, the company used scenarios and gameplay, usually online. The idea of Eve online being a training tool is not an alien concept

Doctrine

The next generation vs traditional table provides a list of behaviours exhibited by companies. However, behaviours themselves are a function of values (i.e. beliefs) and underlying principles (the corpus of which is known as doctrine) through complicated interactions

Figure 15 — Culture Map

I am currently mapping out the behaviours to see if any new doctrine (i.e. universally useful principles) can be established. Currently the doctrine table stands as described in figure 16. This might change with the addition of new principles as a result of this work.

Limits on

behaviours are a function of values and underlying doctrine. As such, some of these behaviours might be destructive if the right values or doctrine are not already established i.e. “leaderless leadership” might be destructive if an organisation does not have values (beliefs) of honesty or trust

Leaderless leadership

One of the more controversial aspects of the new behaviour is leaderless leadership. Prototypes of this form of thinking can be found in Holacracy, Burning Man, GameStop/WSB, Amazon, Haier, Buurtzorg and many other organisations

The problem with leaderless leadership is that it is likely to suffer significant sources of inertia because of existing power structures. When we talk about powerful

We have already seen aspects of this with the changes caused by the isolation economy

On the future

We are aware that some companies have not yet fully implemented (and in cases, not even started) the earlier behavioural changes from 2011.

For reference, I have provided the full list of behaviours that your firm should ideally exhibit in this amalgamated table (figure 17) which includes behaviours from 2011 and 2021.

Addendum

A number of questions have arisen from this article. I will try and answer the most common.

“Do you have more details on those next generation practices and how to implement them?” No-one does. They are emerging

“How do we get started on this?”
If you’re looking where to start, I would use the doctrine table provided in figure 16.

The best way to start is to discuss the doctrine within the company. I normally put up a miro board, add the table and ask people to add post-it notes with Blue for “good” and Orange for “poor”.

One final thing on the miro board … don’t use it as a source of power. I’ve seen people use miro boards where only execs could add post-it notes or the consultants running it. This is quite literally the daftest thing you could do unless you want to disenfranchise everyone

“Can people stop these changes?”
They will try if it impacts existing power structures that are beneficial to them.