A Powerful Tool for Organizational Analysis and Design (Part 3)

In my first two articles about this topic I described how to use the concept of open vs. closed organizations in order to gain an understanding of the strengths and weaknesses an organization possesses. To help a company transform successfully a change manager must adjust the organization appropriately so that its form is optimally matched to its function. I also covered a case study to show how the model worked on one of my own projects.

In this third and last installment I want do provide a little more of a deep-dive and cover the expression of an open and closed culture in different aspects of an organization. Hopefully this will allow you to record your own observations and build your own diagnostic capabilities when it comes to analyzing culture.

Don Harrison with AIM defines corporate culture as “the collective pattern of behaviors, values, and unwritten rules developed over time.”

Behavior of members of an organization is easy to spot; it is demonstrated in observable actions and guides operations on a daily basis. It is reflected in the structure of an organization, such as a functional organization versus a matrix organization. It can be tracked through organizational charts, ways of working or HR policies and typically is readily discussed.

The shared values of an organization are its underlying, driving beliefs to which anyone can refer, either as a guide to action or as a justification for having taken action. They are essential to personal and organizational integrity and provide guidance for making and implementing strategic decisions.

Unwritten rules determine what members of the organization perceive to be successful behaviors. These successful behaviors become replicated over and over until they become “the way we do things around here”. The rules are generally not openly debated and therefore very powerful. They are harder to lay open than the observable behaviors or the underlying values of an organization.

It follows, therefore, that if we want to assess whether a client’s culture is primarily open or closed we should look to the behavioral aspect of culture. Some dimensions that suggest themselves are how people perform their jobs, how they interact with one another, how the organization focuses on what is important and how it is structured.

As you conduct a culture audit and speak with stakeholders pay attention to the following information:

 Observations about people’s jobs – open vs. closed:

  • There are many ways to achieve performance vs. there is only one sanctioned way to do the job
  • Only the most critical aspects of jobs and methods are specified vs. jobs and methods are specified to the greatest extent possible
  • Jobs require a variety of skills and knowledge and training and development are lifelong vs. jobs are narrowly defined and training periods are short to enable quick placement

Observations about how people interact with one another – open vs. closed:

  • People work in groups to assure interaction and problem solving vs. people work mostly by themselves to minimize distraction
  • People stress the importance of work-life balance vs. people believe that working hard and going “above and beyond” is important
  • Emphasis is on self-organizing teams vs. emphasis is on leadership
  • Managers stress self-motivation and self-responsibility vs. managers stress clear goal-setting and control
  • Diversity in race, world view and gender tends to be higher than the industry norm vs. diversity in race, world view and gender tends to be lower than industry norm

Observations about how the organization focuses on what is important – open vs. closed

  • Mistakes are controlled as near as possible to the point of origin vs. mistakes are controlled by specialized functions if they cannot be eliminated
  • Information goes directly to the point where action can be taken vs. information flows up the management hierarchy for decision-making
  • Daily behavior is primarily motivated by high-level vision and strategy vs. daily behavior is primarily driven by policy and procedure

Observations about the structure of the organization – open vs. closed

  • The structure is mainly purpose and issue-based vs. the structure is fairly bureaucratic and mainly function-based
  • Decision-making is based on knowledge and expertise vs. Decision-making is based on power and status
  • Role descriptions are flexible and people self-determine their career path vs. detailed role descriptions and clear rules for promotions and advancement
  • Hierarchies tend to be flat and job-titles are fairly unimportant vs. a complex, many-tiered organization with emphasis on specific job titles

During your analysis you will rarely find a client who expresses culture in only an open or a closed way, but you will be able to see markers that give you an overall idea what you are dealing with.

Keep in mind that neither an open or a closed culture are inherently good or bad as long as they are the best fit for the function the organization or a group within the organization has to perform: if a team works regularly under hazardous conditions where strict rules and protocols need to be followed to ensure every team member’s safety it should adopt a more closed style of organization since the ad-hoc style of behavior typically associated with an open culture could endanger people’s lives.

As a change manager reserve judgment during your observations, seek to understand what the organization wishes to achieve and then determine with your client which aspects of their culture currently present obstacles to the proposed change and which ones could be used as levers to drive change – remember: “Form follows Function”!

A Powerful Tool for Organizational Analysis and Design (Part 1)

Louis Sullivan: Carson, Pirie, Scott Building; Detail

The architect Louis Henry Sullivan who taught Frank Lloyd Wright and developed the concept of the tall steel skyscraper in 19th century Chicago famously coined the phrase “Form follows Function”. He tried to break free of the old school approach of making skyscrapers look like French chateaus or gothic cathedrals and believed that the design of a building should reflect its purpose and not try and pretend to be something else.

In Change Management, and particularly its discipline of Organizational Design this tenet is still eminently valuable and important. A hospital emergency room has to be structured differently from a technology company’s research and development department; a start-up will have processes and leadership practices that will distinguish it from a legacy company that has been in a specific market for half a century.

A concept that will help a Change Manager to analyze the kind of organization they find themselves in and then determine how it may need to be shifted in order to optimally serve its function is based on one of the concepts developed by the Austrian philosopher Karl Popper. In The Open Society and Its Enemies he laid out the concept of an open vs. a closed society.

Popper developed this approach for the realm of political philosophy and as a strong defense of a free and democratic society, but sociologists have since taken the concept into smaller units of human interaction, such as religious communities, organizations and companies and have developed it into a very helpful analysis tool. I came across it several years ago during a seminar in Germany held by Prof. Diether Gebert of the Technische Universitaet Berlin and have found it to be a great concept in Change Management ever since.

While Popper’s original thoughts gave the open society model superiority over the closed model the approach I have been using provides even weight to either form of organization, because in their tempered version we encounter them both every day and they each have their own advantages and flaws.

The analysis tool postulates that human beings organize themselves along a continuum with two very extreme end states. On the one side we find the open model with its extreme end state of complete anarchy where all rule of law fails, everyone looks out for themselves and we have no guiding principles that would put any curb on what people can and cannot do. On the other side we find the closed model with its own rather unlivable extreme of absolute totalitarianism where everything, including people’s thoughts is prescribed and the slightest deviation from the norm is punishable by death.

Obviously most organizations that would require the services of a Change Manager will not be stuck in these dystopian scenarios, but anyone who has worked as a consultant has sometimes shaken their head at the chaos and dysfunction of one of their clients or groaned in frustration at the complexity and tedium of some red tape they have encountered somewhere else. They have seen examples of the kinds of open and closed systems we are surrounded by every day.

If we return to our Louis Sullivan quote of “Form follows Function” we can see that each organizational model has its own strengths and weaknesses and depending on the function an organization wishes to fulfill it may have to adjust its current state from open to closed or vice versa.

In general open organizations are characterized by fairly democratic and participatory processes. Hierarchies tend to be flat, everyone is encouraged to weigh in and to a certain extent define their own job role and the work force tends to be fairly diverse. Organizations like this may also be pretty invested in encouraging flexible work hours or work by remote teams. Often “younger” or smaller organizations fit this profile.

Closed organizations value clarity of direction and clear objectives, and strong leaders or a single visionary CEO will be setting the agenda rather than all of the employees participating in this process. Roles and responsibilities are clearly defined and there are rules and processes for how to do things. Efficiency is valued above exploration. These organizations can be “older” and are generally large enough to have established hierarchies. People are encouraged to identify strongly with the organization, spend time at the office and cultivate a sense of corporate identity.

While these two ways of organization convey very specific strengths to a company they also have some down-sides – remember at their extremes they promise anarchy or total supervision and conformity. An open organization can descend into chaos. Individuals may pursue selfish goals rather than act for the good of their team members or the good of the company and it may take forever to come to consensus to make a binding decision.

Closed organizations can become very rigid and if their leadership pursues unsound goals and ideas they can fail without anyone daring to question increasingly toxic decisions. Since leaders are also unlikely to fly in the face of their own success they tend to be more focused on the status quo rather than try something new. Because of their focus on protocol and process and asking for permission rather than forgiveness they can also evolve elaborate bureaucracies that slow people down.

To complicate matters some organizations also have “micro-climates”, for example a fairly open organization in a heavily unionized market may have a very closed HR division due to the many rules and regulations that need to be observed. A fairly closed organization may still have a very open marketing  department, because they want to encourage innovation and a collaborative work style rather than top-down leadership.

What is important for a Change Manager is to try out the model to get their bearings when they start analyzing and interacting with an organization or part of a transformation. Depending on their findings they will be able to both put problems into context as well as understand an organization’s strengths. This will allow them to define levers as they begin to implement strengths and to anticipate risks or issues.

In my next article I will talk about some case studies and show how the model worked on some of my own projects by helping me first to understand my clients and then to successfully shift their “form” so it would fit their new “function”.

Launching ProjectEcologyOnline.com

Creating an environment where projects thrive

Project Ecology Online (PEO) is a website with an a la carte menu of content that gives individuals and companies the tools and know-how to combine Project Management, Facilitation and Organizational Change Management in order to create an environment where projects can thrive – in other words a full methodology translating business strategy into results.

After 20+ years in Project Management as a practitioner and a coach, I have decided to collect the wealth of templates and processes I have developed, successfully applied on projects and used in educational settings and share them; not just with my immediate clients, but with other professionals who are looking to add useful tools to their repertoire and with companies that are developing a Project Management function in their organization.

Continue reading Launching ProjectEcologyOnline.com