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Dear Charlotte,

Your latest query asks whether it is possible to
maintain open, flexible processes in increasingly
large organizations. My earlier post did not answer
this extremely important question in explicit terms.
Apologies.

As more people are involved in any organizational
process, the process changes in terms of character,
quality, flexibility, and speed. This is true for
processes within the boundaries of a formal
organization such as a firm. It is true of processes
that function as most design process do, working in
teams that cross organizational boundaries and
involving many kinds of stakeholders.

While the degree to which a process must be formalized
is often related to these issues, small organizations
may be highly formal and large organizations may
remain flexible. The crucial factors in character,
quality, flexibility, and speed involve a
constellation of issues. Number of participants is one
of them.

In this post, I will focus on this one question of
organizational size.

As organizations or working groups grow, the character
of many processes tends to change. At some point, the
number of people who need to work together reaches a
point where they no longer work face-to-face. In large
projects, they may also be required to work across
divisions or firms with different cultures, different
sets of rules, and different kinds of activities.
Formalization and bureaucracy are a traditional
solution that helps all participants to work on a set
of well-understood ground rules and common principles.

One early goal of formal, bureaucratic was to reduce
chaos, enhance transparency, and create a fair context
for all process. As any knows who has ever worked in a
formal or bureaucratic system, most bureaucracies do
not achieve this goal. Some formal and bureaucratic
systems seem designed to defeat the very possibility
of transparency and fairness. Any system with formal
rules develops a new range of problems. So does every
system with bureaucratic structures.

Many scholars have come to feel that it is impossible
to overcome the problems of bureaucratic control
through yet more rules and formalization. This is my
view. Several fields of inquiry have grown that ask
how we may achieve appropriate yet flexible control in
effective, humanistic organizations.

Two promising approaches are organizational learning,
knowledge management.

The goal of organizational learning is to help the
members of an organization develop processes
characterized by high quality, appropriate speed, and
appropriate flexibility. Organizational learning
involves several factors. These include cultural
context and organizational process, double-loop
learning for groups and individuals, and reflective
practice for individuals.

Knowledge management refers to three things. It is a
research field, a professional practice, along with
social and technical systems to support them.

The research field examines human knowledge as a
central factor in producing goods and services. Over
the past decade, the research field has become a
distinct field with a philosophical perspective and an
applied focus. Knowledge management develops
systematic policies, programs, and practices to
create, share, and apply knowledge in organizations.
Practice is linked to theory through an explicit
philosophy of knowledge and learning.

Working with knowledge implies understanding
organizations as systems. Using knowledge requires
individual and organizational learning. This means
working with people. As actors in a system, human
participants enable the organization to learn.
Individuals share, improve, and effectively recycle
existing knowledge.

Social and technical systems support the process by
helping organizations to identify, select, acquire,
store, organize, present, and use information for
problem solving, learning, innovation, strategic
planning, and decision-making.

Knowledge management involves two parallel streams.
The first stream is social. Philosophical,
interpersonal, and organizational in perspective, it
involves human dynamics, dialogue, and organizational
learning. Such concepts as storytelling, communities
of practice, reflective practice, and behavioral
modeling characterize what is sometimes called a
person-to-person approach. This approach to knowledge
management employs both tacit and explicit knowledge.
I believe we have made great progress in this area.

The second stream is technological. Based on
information technology and data processing, it uses
information systems to harvest, gather, codify, and
represent knowledge. Such concepts as data
warehousing, data mining, knowledge mapping, and
electronic libraries characterized what may be termed
a people-to-documents approach. Because it is mediated
through information systems, it is almost exclusively
explicit. My experience has been that the
technological stream has generally been weak because
it is usually offered as a substitute for the cultural
focus on human beings and organization learning that
render knowledge management effective.

Effective work demands creating, sharing, and
distributing information as the raw material that
individual and organizations process into knowledge.
The administrative principles of most bureaucracies
and formalized systems restrict the flow of
information and power in vertically stratified
organizations. The management principles of a
knowledge economy encourage the flow of information
and knowledge within dynamic networks.

On a theoretical level, complexity theory seems
especially promising. All human organizations are
complex adaptive systems. Encouraging the conditions
in which organizations create emergent order is one
way to maintain open, flexible organizations with
large numbers of actors. While complexity theory has
much to say about why the principles of organizational
learning and knowledge management work, complexity
theory has not given rise to a body of applied
knowledge.

It is possible to have open, flexible organizations.
One reason this is rarely done is the impatience of
business leaders with the slow process required for
building organizational culture. This process
necessarily includes a deep enough understanding of
how – and why – these processes work. This is
comparable to what W. Edwards Deming called profound
knowledge. Because developing effective organizational
culture always requires patience and understanding,
the profound knowledge is an essential foundation.
Without it, leaders may fail to recognize that an
organization is developing well simply because it is
not developing as swiftly as they would wish.

Developing a robust organizational culture always
requires time. The larger an organization is, and the
stringer its culture, the grater the time that may be
required. Leaders who begin with an appropriate
strategic vision for cultural renewal and knowledge
management often lose patience with the slow, detailed
work of execution. Because strong culture grows out of
extended human interaction, development is always
slow. It is slow because the cycle of individual and
shared learning works at the speed of face-to-face
interaction among work groups across the entire
organization. Then it repeats and builds on the
interactions of these groups with circles of other
groups, and so on. Leaders grow impatient because this
cannot happen at the speed of one-way strategic
communication from a leader and a small circle of top
managers.

Most managers today operate on the principle that
results must come within one or two quarters, nearly
never more than a year. Most fail to distinguish that
long-term human development and cultural processes
bear fruit at a different pace than short-term product
or financial processes. This tempo is exacerbated by
the fact that in some industries, the average middle
managers changes jobs, assignments, or even companies
within a year or two. Even members of the top
management group often change at that speed. This
breeds an impatience for results, especially when pay,
bonuses, and rewards are linked to immediate pr
short-term results.

The paradox of this problem is that the speed with
which an organization reacts effectively to a changing
world depends on strong, flexible culture in an open,
transparent system. Building those systems takes time.
Thus, the kind of patience required in a leader who
can build robust culture may seem to conflict with the
need for impatience in responding to the external
world.

A strong, flexible organizational culture must be
anchored in trust and social memory. While a strong,
flexible culture is not necessarily open and
transparent, strength and flexibility seem to be
prerequisites to open, transparent process. Open and
transparent processes help organizations to learn and
grow in human terms even as they grow in size. They
generate and preserve intellectual capital and it
seems to me that such organizations tend to use
process that lead to better and more robust solutions
to the challenges they face.

One of Anders Skoe’s most useful slogans is, “Go slow
to go fast.” Organizations that build effective
cultures can achieve high quality, with flexibility,
and speedy response to challenges. The slow part is
building an organization that can do this.

Learning how to do it and learning enough about the
principles that make it work has been one of the great
developments of the past fifty years. 

We spend much of our lives at work. Work and work
processes define a large segment of our life. We
achieve identity through work and we influence the
world through what we do at work. The way we meet the
challenges of organizational life is therefore one of
the great human and philosophical challenges of our
time.

I probably should have said all this before sending my
last post. At any rate, I hope that I have addressed
these issues more clearly now. You will find the
details of how (and why) in the reference list that
accompanied the earlier post.

Best regards,

Ken


—snip—

Occasionally however, I talk to people who teach
design of large technical
systems, and there seems to be a rather definite
methodology (if I
understand them correctly). And of course (at least
simple mindedly) the
more people that are involved the more you have to
formalize the process -
the kind of openness/flexibility possible in a smaller
team is no longer
possible (or is it?)....

Best wishes!

/Charlotte

—snip—


Ken Friedman, Ph.D.
Associate Professor of Leadership and Strategic Design
Department of Leadership and Organization
Norwegian School of Management

Visiting Professor
Advanced Research Institute
School of Art and Design
Staffordshire University

email: [log in to unmask]




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