Organize for Complexity Book

Niels Pflaeging’s amazing little book, Organize for Complexity, gives good advice on how to create self managing organization that are resilient and stable.

There is a lot to like about the book.  It is short: only 114 pages.  Lots of hand drawn diagrams illustrate the concepts.  Instead of bogging down in lengthy descriptions, it keeps statements clear and to the point.

Alpha and Beta

Alpha is a taylorist way of running an organization.  It is the embodiment of command & control, theory X, hierarchical, structured, machine-like, bureaucratic traditional organizations.  The reason that alpha style organizations have worked is an accident of history.  Complexity of marketplaces, and subsequently manufacturing environments, were long ago quite complex, but the dawn of the industrial age brought a century or so where the markets were sluggish and complexity quite diminished.  During this period of diminished complexity, alpha style organizations were able to thrive.  However, this came to an end in the 1970’s or 1980’s, and the world has become more complex again.

OrganizeForComplexityBeta is the style of organizing that is effective at dealing with complexity with a focus on theory Y, decentralization, agile, and self organizing.  He suggests we should form people into teams with a clear boundary.  Keep everything completely transparent within the team so everyone knows what is going on.  Give challenges to the entire team (or better, let them self-identify the tasks) and recognize accomplishments of the team, and not individuals.  Done correctly, the members of the teams will work out the details, taking on the tasks best suited to themselves, without regard to roles, titles, job positions, status symbols, etc.

The book spends a good deal of time motivating why this works.   One subject which I have covered a lot on this blog: a machine-like approach can not work against complexity.  Analytic decomposition of a complex situation, and addressing parts of a complex system can actually do more harm than good.  The one ‘silver bullet’ is that human beings have the ability to work in the face of complexity, so you must set up the organization to leverage native human intelligence. (Reminds me of human 1.0.)

Networked Organizations

The goal is to make an organization networked along informal lines, and also along value creating lines.  Instead of centralized command center pushing ideas out, the network is formed with a periphery which deals directly with the market, while there is a center which supports the periphery.  The network is driven by the periphery … very much the same as a pull organization.  I agree, and have argued that such an organization is indeed more robust and able to handle complexity (see ‘“Pull” Systems are Antifragile‘).  The networked organization decentralizes decision making, putting it closer to the customer, resulting in fast and better decisions.

Leadership

Since teams are self organizing, leadership works a little … differently.  Leadership needs to focus on improving the system, and not so much on the tasks and activities.  Radical transparency, connectedness, team culture are all important.  You might even call it collaborative planning.  He even spends some time discussing the steps you might have to do to transform an organization from an ‘alpha’ to a ‘beta’ working mode.

Summary

I really love the book.  It should be quite accessible to managers and leaders in any organization.  Like most inspirational books, it makes things sound easier than they are.  Ideally, each team, and each team member, would get paid proportionally to the value the team/member provides each time period — as if the organization was a form of idealized market.  Some forms of value are nebulous and defy measurement.  Also, people band into organizations in order gain the stability that comes from a fixed structure so that they don’t have to worry about how their own bills will be paid at the end of the month.  There will always be someone taking the risk, and as a result having a commanding influence.  One can’t be a purist; and it is pragmatic to expect that a mixture of alpha and beta will always be in force.  Still, the book gives an excellent overview of the principles of a networked organization to strive for, along with a reasonable explanation supporting why they work, as the title suggests, in the face of complexity.

 

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One Response to Organize for Complexity Book

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