Notes from the Field: History of Radical Organisational Design Notes From London Integral Circle Salon Meeting 3rd Oct 07 Presentation of Research Material And Participants’ Comments
Original Introduction: **A History of Radical Organisations – through the lenses of the AQAL model**
“The session’s goal is to introduce Organisational Design as a specific discipline for looking at the structures that define our working lives.
Ken Wilber’s’All Quadrants, All Levels’ map, including the dynamics of social holons, will provide the structure of the discussion.
A summary of unusual company case studies will be used (including Semco Brazil/Ricardo Semler—author of ‘Maverick’; Visa International—see Dee Hock’s’Birth of the Chaordic Age’,
St Lukes London; see ‘Creative Company: How St. Luke’s Became “the Ad Agency to End All Ad Agencies”‘)with whom a series of interviews has been carried out for a pending book.
The long term results (10 years timeframe) of experimentation at an organisational level from the case studies will be offered.
Developmental archetypes (e.g. Spiral Dynamics) are tested against different roles within the case study organisations, along with Agentic and Communion phases of an organisation’s growth.
- Focus of the session will be in the LR and LL Quadrants, with emphasis on the dynamics of social holons.
- The origins of the research work: Taking four company case studies from an MBA class on Human Resources, that focused on radical organisational design (experiments with HR policies, participatory management, devolution of control), the research project set out to update the case studies. The case studies were St Lukes (London advertising agency), Semco (Brazilian industrial company, Ricardo Semler) and Oticon (Danish hearing-aid manufacturer), and Visa International. Interviews were carried out with the CEOs of all these organisations. Each of the transforming leaders from these case studies, had previously published works.
- The updates to the case studies would allow an analysis of the common traits between these companies. The original ambitions were to i) build the theory connecting these examples of progressive design, ii) highlight the leading edge of organisational performance lay in organisational design, before the design of its services and products, and iii) promote democracy in the workplace.
- Examples of the interest in building the theory were from a couple quotes: Ricardo Semler said that ‘Semco works in practice, but I am not sure it will work in theory’. Andy Law has said ‘the things that have benefited St Lukes the most, have been the things the least understood by us’…
The Research Journey
- Having started the research, a first paper on ‘Knowledge, Control and Emotions’ written in 2003 by John Oliver and MBA associates, attempted to find themes of optimum control levels and ownership models. However the greater the depth of research, the greater the contextual dependencies appeared – there were too many exceptions for a robust picture (e.g. similar ownership structures giving very different results).
- The update interviews with the case study companies revealed an anticlimax in the consistent dilution of the original radical policies. Conservatism has crept into all the case study companies as they matured. The book’s premises were then put into question due to both the contextual dependencies and the apparently temporary nature of the radical HR policies.
- The AQAL and developmental models however, began to emerge as one of the most useful structures through which the case study material could be interpreted, including the dynamic transitions experienced by these companies over time. The book is therefore an exercise in applying developmental language to collective holons – it prepares the ground for a second phase of specific research to test the correlations.
- Promoting democracy in organisations was the original value mission of the case-study research work, but over time, it has become clearer that perhaps democracy cannot be the ultimate end-goal in organizational design. Democracy does however have a role to play as a component, rather than as a universal structure – hence the concept of the ‘Post-Democratic’ organisation. The founder of St Lukes (the London co-operative ad-agency), experienced the progressive conservatism of collectively managed organisations. He then moved on to found his next company, Boysmeetsgirl, as the sole owner.
- The book looks at the legacies of these maverick leaders. Interestingly very different leaders have taken the reigns of the case-study companies.
Initial Research Conclusions:
- Each case study turnaround or creation story, was driven by a charismatic figure, imposing themselves in the first phases. In certain cases, very autocratic practices were used for immediate control (firing of 60% of the previous management, taking control of every expenditure decision). Each leader has then distanced itself from the original organisation.
- There were many policies that didn’t last the test of time. Approximately 2/3rds of the radical policies for which the companies became well known, have been toned down. The research has a check-list of the HR policies tried and tested.
- With the aid of the AQAL model and reference to research into Agency and Structure (Archer, Giddens, Bordieu), the dilution of the original radical practices, became therefore more positively recognized as a natural and constructive phase of ‘communion’, after extreme phases of agency.
- The provisional application (building the hypothesis for future research) of the developmental Stage archetypes to collectives, reveals the value of each Stage across different i) phases of a collectives’ growth, ii) departmental roles and specialisations, and iii) market places (is it e.g. a charity, bank, educational or industrial organisation). For example, start-ups will tend to have need for (using the Spiral Dynamics coding for Stages) Red and Blue characteristics, emphasising their internal belief systems, to overcome challenges and create new opportunities. Sales departments will tend to need Red characteristics, compared to HR departments that will tend to Green. Educational and charitable organisations will tend to emphasise Green values. ( Testing of the hypothesis in applying the developmental archetypes to collectives, is planned for 2008. The design of the interview and data gathering phases needs to establish how tools such as the sentence completion test, can be applied to collectives.)
- The agency and structure oscillations may be part of the continual unfolding through Stages, gradually building the presence of stable higher-Stages. Rather than debating which precedes the other between agency and structure, their relationship can be looked at a virtuous revolution of opposites, with the developmental backdrop of progress.
- Looking at the charismatic leaders, they demonstrated a wide range of 2nd Tier values of enabling human potential, whilst at the same time facing the realities of what can go wrong.
Session Discussion, Remarks From Audience
- Can organisations represent 2nd Tier? The hypothesis points to how collectives show spreads of each of the Stages. At the fringes, yellow and turquoise may appear. Stage archetypes can be further broken down to the ‘lines’ of intelligences of the collective (a collective’s centre of gravity across moral, knowledge/informational, social, technical, process, learning skills lines).
- Application of this material, bringing AQAL down to the ground in the context of organisational design: Simply by creating awareness within any organisation of the Stages, the individuals within the organisation can themselves act with more consciousness on the strengths, weakness and potential pathologies of each Stage’s manifestation. The educational process itself delivers then the space for the interiors of the individuals to choose and act.
- Do Social Holons posses agency? As debated between Mark Edwards and Ken Wilber (posted on Integral Naked), Ken asserts that social holons can be viewed using quadrivia, that they can be seen through an ULQ, but they do not posses a dominant monad that commands the collective. According to definitions found on II: Social Holons posses an interior-occasion. They cannot display agency as a DRIVE, in 1st person, but certainly as a dimension. A social Holon has a dominant mode of discourse, and a governing system (nexus-agency). A social holon is an individual holon with its artifacts of exchange. An individual Holon has a dominant monad (self-system, possessing agency).
Remark: Collectives can have an upper left drive. There are examples of organisations that show clear missions and drives, with a defined ethos. So surely that represents an ULQ dimension and drive?
- Social Holons and Stages: KW reference: Social holons do not have to go through Stages in a linear progression of maturity, since their ‘average’ Stage level (or centre of gravity) can be dramatically shifted by the influence of new individuals. This can be in both directions, either a pulling up, or a pulling down, by dominating individuals. The Elliot Jaques ‘Requisite Organisation’ school of thought highlight how a poor performing part of an organisation can drag the whole of the organisation down to a lower level of performance.
How do individuals affect the collective? It was felt by some that the poker-game analogy (of a minority raising dis-proportionally the level of the collective) as being conceptually the wrong model to apply to organisations, plus the analogy was seen to have certain flaws. The poker game structure has little in common with a real organisation (the game is made up of independent individuals, without having an overall purpose within its environment). Gaming Theory, where the collective has a hierarchical cybernetic purpose, is a very different analysis, and is perhaps the better choice of model. Difficulty was expressed in applying Wilber’s views on collectives. Does AQAL breakdown for collectives for surely the URQ also disappears for a collective, when looking at it as a social holon. Certain members of the Integral community assert from practice that groups HAVE to go progress linearly through each Stage of maturity, and that any outstanding individual coming into a collective are themselves impacted by the existing collective environment (or may these rules differ per Line of a collective’s intelligence?). Organisations can’t skip the basic structural requirements of HR departments, business plans, rules and regulations, even if they are a populated by people aware of the developmental stages and striving for 2nd Tier.
Remark: Every individual brings to the collective their own specific map……
The ULQ will also be influenced by the environment within which the collective is operating. Any social holon mirrors the greater social holon within which it operates. A distortion would not be sustainable (an collective of only ‘turquoise’-level individuals wouldn’t be effective. Neither can you grow social holons outwards to the next level of social holon – you can’t grow LIC out to become the whole of London.
Raising the Level of the Collective: Example from John on possible ‘raising of the overall level’ in a collective, from one of the case studies: In a time of crisis for the economy in Brazil, Ricardo Semler instituted a auto-setting of salaries across the company, at the same time publishing all salary information. The overall effect was for employees (incl. the directors) to embrace the requirement and responsibility to collectively reduce salaries. However, in the LIC session, this was seen as perhaps an example of what Spiral Dynamics calls the selfsacrificing, communal attributes of Purple, or a very clever Orange. Given the crisis context, then all sorts of positive behaviours become possible.
Analogy from John on process of studying organisations: The vibration plate with rice, producing diverse symmetrical patterns, as it moves through the frequencies—studying organisational design patterns is like walking up to the plate once the vibration has been switched off, to understand the observed phenomena, not knowing what is driving the plate. Looking at the rice and the plate itself doesn’t provide any information. This highlights how perhaps the social patterns we are observing are influenced from the external environment. This contrasts with the Poker Game analogy where none of the environmental issues are factored-in.
Remark: The case study analysis is perhaps focusing too much on them as discreet collective units, rather than looking at them as a function of their environments.
Do we create opportunities? Is there is a dual action of the chaos of the market environment creating pockets of vacuum for opportunity, along with the self-determinism of organisations satisfying unexpressed, emerging needs? Remark: Some of the best architectural practices reject the majority of the offers of work they get, and deliberately maintain a small size.
Remark: Conscious design is perhaps our way of participating in evolution, and where evolution becomes conscious of itself.
The Potential Application of the Case Study Insights
Using the developmental Stage language: The applicability comes from being able to analyse which Stages are most appropriate for the organization i) per phase of growth, ii) per departmental specialisation or role, iii) per environmental or market place context. Pathologies can be identified and diffused, where inappropriate Stage archetypes linger and dominate.
- For example a family-run business growing into a larger and more formal structure of specialisations (adapting to the environmental challenges), but still management is dominated by political power negotiations around the family founders.
- A start-up (or new initiative) will draw on Red and Purple characteristics, as it drives itself from its own self-belief, confidence and identity. It will prioritise its own internal information, compared to outside environmental information (which is often limited). A start-up rarely has a market survey that can guarantee the market opportunity, given the dynamics of competitors and all other environmental factors.
- The triggered reflection on organisational design will allow owners to make a shift, using an architectural analogy, from using their materials not only in compression, but also in tension.
Remark: This perspective of being able to ‘judge’ appropriate Stage archetypes, smacks of a technocratic, assumed position of authority.
Response: The Stage archetypes provide at the very least a language for the organisation to become more aware of itself – that in itself is a major potential step forward, so that each part of an organisation can appreciate their differences, and perhaps work better with those differences. The hypothesis is that the more the system (organisation) becomes aware of itself, the better.
Remark on the St Lukes Case Study: Perhaps the initial success of St Lukes was due to the clients wanting to ‘buy-into’ what St Lukes represented, from its new ways of structuring and organising itself (hotdesking, dedicated client rooms). From articles written on the company in Campaign magazine, it was mentioned that the company required a certain type of person to be able to work in such an unstructured environment. Certain employees suffered from the challenges of navigating such a different way of working. Why is there no other advertising agency that has tried to replicate the St Lukes model? To what extent was the success of St Lukes down to the buzz that they created around their image, rather than it being directly and solely due to any performance improvement from their organisational design?
Lessons from St Lukes: St Lukes can be said to of had provoked many other organisations to think about their HR policies, and alternatives in organisational design. They have provided a service to the wider community in questioning certain norms.
Co-operative Design Structures have however been around for many years, and have even influenced industries such as Silicon Valley, to retain staff.
Predictability of Life Cycles: The research community following Maslow, would say that these cycles of the Case Studies, are entirely predictable, where they (often NGO-type organisations with strong value missions) are often setup by these inner-directed, pioneer mentality people, which inevitably become more conservative (as more Orange and Blue orientated people take over).
Influencing a System: Cybernetics looks at how you can identify the small step-changes that will trigger internal reactions that snowball, to bring about a greater change. Rather than looking for the direct-hit large change, a planner using cybernetics, will study which point of influence is the most sensitive to the system, and which is subtle enough that no-one will see any reason to resist it. Donella Meadows (Club of Rome) put forward a hierarchy of levels of influencing any system, listed below:
9. Numbers (subsidies, taxes, standards)
8. Material stocks and flows
7. Regulating negative feedback loops
6. Driving positive feedback loops
5. Information flows
4. The rules of the system (incentives, punishments)
3. The power of self-regulation
2. The goals of the system
1. The mind set or paradigm out of which the goals, rules, and feedback structure arise.
Requisite Organisation Design: A school of organisational design, based on Elliot Jaques’ work, where the reward of each individual should be based on a scale determined by the time-span in which their decisions impact the organisation (Directors, making decisions on longer-term issues earn more). Spiral Dynamic practitioners have referred to this approach as a 2nd Tier design tool. This may well apply to mature organisations, and be influenced by the époque of its inception (1960s), but it was remarked in the session that this approach does not apply to all organisations – it doesn’t cover the whole story.
Remark: There are no definitive structures to arrive at from this analysis, and structures keep changing. Democracy as a design objective can be very useful for many aspects of an organisation, but it does put a lot of pressure on individuals. Democracy creates better people, but it does require a greater stretch of engagement. A conclusion from observing organisations over time is that any structure would be eventually subverted by the management, due to their interest in control. It would then become a shell of its former self, and then fall apart, to be then rebuilt. Of all the democratic organisations studied, there is this constant reconstruction.
Coming Back to 2nd Tier: You can have a network of people at 2nd Tier, but perhaps since 2nd Tier people are into having more independence, they may not be able to bind into any formal structure. They can pragmatically co-operate on specific tasks, but whether they are capable of forming enduring working organisations remains to be understood better. You can otherwise have a 2nd Tier organisation, where the leadership is at 2nd Tier, and the other people are at the levels they need to be at to function optimally. But these people would be dynamic and evolving. The literature around ‘beyond rational leadership’ is of interest.
Influence of the current economy: The developed world is moving into the right-brain (creative, caring, emotional) as its distinct value generation, as many industrial, technical roles are being outsourced to other countries (as described in Dan Pink’s book).
References to organic complex community structures, such as bees and ants. Sophisticated role structures, optimised over time, but within a predictable environment.
Suggested references from the audience:
- Ternary Software – Brian Robertson, pioneering the notion of Holacracy (The relevant idea at hand is that each tier of the organization (applicable at this point to governments and corporations) manages itself through a system of consensus, which does not allow for any particular member of the tier to be in charge, but rather allows the group consciousness to guide the decision-making processes.)
- Herb Koplowitz, liked by Suzanne Cook-Greuter, brings East and West influences together. Originally heavily focused on democratic organisational design, but after working with the Elliot Jaques ‘Requisite Organisation’ design theory (reward linked to time-span of decisions), has moved away from the democratic design camp, deciding it was flawed and limited.
- VALS Values and Lifestyles, Stanford Research Institute
- Pat Dade, Value Modes.
- Adizes corporate lifecycles.
- ‘Values Shift’ Brian Hall.
- Richard Barrett.
- Design of Freedom (Stafford Beer).
- Thomas Berry.
Remarks from the LIC Email List:
“One of J K Galbraith’s mid-1950s observations on the development of organisations, particularly corporations, was to the effect that, as (and IF of course) they achieve more power to influence their external environment, they can afford to devote more attention to their internal environment. In fact, my recollection of his implication, restated through an integralish lens, was that organisations would be unable to avoid turning their attention inwards as a growing proportion of the organisation would only see and affect other bits of the same organisation and would therefore have no external object for their Agentic impulses. So perhaps we might say that an organisation of sufficient size can convert agency, as observed from the level of individuals (or even sub-sections of the organisation), into communion when viewed from the level of the organization as a whole.”
Remaining Questions For The Research:
- How do participatory organisations potentially disguise power?
- How does the propensity for risk taking change between each of the Stages?
- Is propensity to take risks and agentic action independent of Stage?
- Does risk-taking increase when an individual is in a social environment whose Stage Centre-of-Gravity is far off their own?
- How do social holons influence the Centre of Gravity (CoG) of the Stages of the individual holons. An individual can be oppressed by a low CoG CEO, or inspired by a high-CoG CEO.
- How can the developmental psychology perspective contribute to the advanced organisational design techniques, such as Cybernetics (Syntegrity), and Open Source networks?
Semler: “No one can impose corporate consciousness from above. It moves and shifts every day and with every worker. Like planning, vision at its best is dynamic and dispersed”.
Further Reference to Distinction Between Social and Individual Holons:
Example: when you decide to lift your arm, and you lift it, all the cells in your arm go along. None of them decide to disagree and go somewhere else. They are parts of your arm, and subject to your centralized will. But a society works very differently. People are not parts, but members, with their own individual wills. Rulers with fascistic tendencies will often try to make society work as if its members are parts that simply are cogwheels that have to go along with the program, and that never really works.
Niklas Luhmann: The core element of Luhmann’s theory is communication. Social systems are systems of communication, and society is the most encompassing social system. Being the social system that comprises all (and only) communication, today’s society is a world society. A system is defined by a boundary between itself and its environment, dividing it from an infinitely complex, or (colloquially) chaotic, exterior. The interior of the system is thus a zone of reduced complexity: Communication within a system operates by selecting only a limited amount of all information available outside. This process is also called “reduction of complexity.” The criterion according to which information is selected and processed is meaning (in German, Sinn). Both social systems and psychical or personal systems by processing meaning.
- Dee Hock (Birth of the Chaordic Age, 1999; One From Many: VISA and the Rise of the Chaordic Organization 2005).
- Lars Kolind (“Vidensamfundet” (The Knowledge Society) 2000 in Danish, The SecondCycle (Wharton School Publishing 2006)).
- Andy Law (Open Minds 2001, Experiment at Work 2003).
- Ricardo Semler (Maverick 1993, 7-Day Weekend 2003).
John Oliver is currently Telecoms Management Consultant with Prodata-Partners Ltd. UK, with 8 years in technology sales management (Boston, USA, and Nice, France), and 2 years in telecoms strategy and market research consulting (Ericsson, British Telecom, Airbus, France Telecom). After an engineering degree at Brunel University, London, worked for Intermediate Technology Consultants (founded by E.F. Schumacher) for 4 years in technology transfer projects to Nepal and Ghana. Completed an MBA (with honours) in 2000, at Theseus-EDHEC, France. Working with MBA colleagues, research and interviews on organisational design begun in 2001, with a first paper on ‘Knowledge, Control and Emotions’ completed in 2003. Contact John Oliver at: email@example.com