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Psst, there’s potential for disruption in organization design

Reviewed: Organisation Design: Re-defining Complex Systems

orgdesigncoverWhile Nicolay Worren explains that his new book is intended for MBA students and executives, one can’t escape the thought that much of the learning it offers could be useful to a much larger audience. In fact, it might even be inspiring to those confronted by the complex dynamics and ambiguity in modern business design, and hoping for tools to manage that growing complexity. After all, the book’s stated purpose is to promote approaches to organization design that are focused, current, rigorous and pragmatic. In other words, its aim is to bring science to a business where it has been lacking. Organisation Design: Re-defining Complex Systems achieves that, especially with its bold introduction of Axiomatic Design.

The thing about an open scientific approach, however, is that it potentially puts organization design thinking into the minds of any employee at the very time when the structure of agile companies are flattening and employees are having more say in the design of their own work.  As the author points out, research shows “successful firms pushed decision making down the organization, achieved fast, easy and abundant sharing of information, and encouraged creativity and learning among employees.” With this book, organization design is no longer a dark art where corporate witch doctors follow arcane recipes to satisfy only a few privileged stakeholders at the top. Today, organizations are increasingly collaborative systems and, to work most effectively, employees need to understand their role in the system holistically and to act accordingly.

The book is a model of a clear-headed, systems approach in its very layout. Each chapter begins with a bullet-point overview to establish the need for what is about to be discussed. This orientation to salient needs reflects the one thing of primary importance in designing every role and activity in an organization: its purpose. If you’re unclear, for instance, how a role’s purpose supports corporate strategy (i.e. you’re not asking the right questions), you’ll never get the right solution.

While this disciplined orientation to satisfying functional requirements is not exactly new, what is new is the methodology for achieving it. Axiomatic Design, invented by Professor Nam P. Suh (MIT and KAIST universities), is emerging as a formidable tool for managing complexity. A.D. has been applied very successfully in the world of engineering and product design but this seems to be the first book advocating its application to organization design.

Axiomatic Design comprises four design stages: strategic needs, functional requirements, design parameters, and process variables. The magic of Axiomatic Design is in the way design processes zig zag back and forth to ensure coherence between each stage. In fact, as Worren points out, this coherence-checking between design and the strategy it is intended to serve, can have the effect of requiring changes in strategy—it’s a two way street.

According to Axiomatic Design, complexity is a function of coupling or interdependency. In fact, Axiom Number One is called the Independence Axiom which states “Maintain the independence of functional requirements.” For example, an employee will be more prone to make errors when there is ambiguity about who he or she reports to. While there may, in fact, be justifiable reasons for structural ambiguity, those reasons need to be assessed methodically. Here, Worren makes a distinction between necessary complexity and unnecessary complexity.

Normally, it is best to remove all complexity i.e. coupling of ambiguous or conflicting functions. Sometimes, though, complexity can be beneficial, for example, when it enables solutions impossible by any other means or when the ability to deal with complexity is a competitive advantage. With that in mind, the design exercise becomes, first, to root out unnecessary complexity and then to manage or mitigate the risks of the necessary complexity.

To assess where coupling occurs in organization design, a Design Structure Matrix is used to graph the overlaps. At the highest, most superficial level, these matrices can be very easy to understand and work with. Although Worren doesn’t go much deeper than that, the experience of Axiomatic Design as it’s applied to product design promises much more. When design analysis drills down into finer detail and greater scope, the matrix maps can become extremely dense. But that is also where patterns begin to emerge that can point to major systemic changes being required.

To date, most organization design has been based on simple economics models. That is, you pay for someone to perform whatever function you demand and that’s it. In competitive businesses today, that won’t work anymore; employee relationships are becoming as complex as the jobs they are performing. High quality employees demand autonomy and empowerment so that they have a say in the design and performance of their roles. They demand the resources they need to master their roles. And they want clearly defined roles.

The costs of not moving to complexity management in organization design are huge. First, as an organization grows, the number of interactions within the organization grows. For the most part, this is unnecessary complexity that comes with increasingly onerous coordination costs. Every relationship or process handoff is a potential problem that needs to be escalated to management.

In addition to lower performance, the other problem with ambiguity in the workplace is unethical behavior. As the author describes in cases such as Enron, Arthur Anderson and other business disasters, the source of trouble was in ambiguous policies and roles. The reason or excuse for these painful failures was the fog of complexity.

With transparent sharing of knowledge and social learning in well-designed organizations today, it’s hard to imagine empowered employees allowing such situations to develop. Where it will happen, however, is in an organization structure where there isn’t that sense of clarity and transparency, where employees feel inclined to say “it’s not my job, it’s not my problem.”

The greatest hope that shines through in Organization Design: Re-defining Complex Systems is in the promise of greater agility. Using these tools for complexity management and designing employee roles that are more entrepreneurial, organization design becomes dynamic and ongoing. Instead of being forced into a panicky reinvention whenever it’s confronted by market changes, an organization designed top to bottom for managing complexity has the resilience to adapt more readily. That’s a clear-cut edge over competitors burdened with traditional organization structures. In fact, if done right, it could be disruptive.


Occupy Business Innovation in Canada

November 28, 2011 Leave a comment

It’s time to Occupy business innovation and research commercialization in Canada.

In response to reports that Canada has slipped badly in global rankings of innovation and research commercialization, the federal government asked industry for ideas on how Canada might fix the problem. The result is the Jenkins Report, which is stirring up some debate in business circles (see Globe & Mail column and comments).

The report offers a number of solutions to the problem of lagging innovation but the main thrust seems to be better targeting and distribution of the billions of dollars we already dole out to businesses every year. Strangely, since I’m more left than right, this has me feeling a little Kevin O’Leary about it all. It smells like tweaking a perpetual government bail out of business.

My point is the report and the debate completely disregard the concerns of the Occupy movement, which is pointing to the same broken business finance system. This disconnect is strange because so many of the business people arguing about improving Canada’s innovation financing are also sympathetic to Occupy, especially the younger startup crowd. But they seem unable to recognize their own power and this unique opportunity to influence both issues at once.

The Occupy movement says big money and corporate power can’t be trusted to run the world anymore. Capitalism, if it ever was a noble beast, has devolved to a rigged game of elite cronyism, manipulation and greed. We’re seeing examples of that in the way so many companies and consultants are gaming government innovation funding now.

Occupy supporters say the metrics used by the financial elite to pick winners and losers ignore everything but money. Aren’t those the same metrics used in the innovation funding game?

And Occupy says if corporations are indeed people, as recognized by the courts, then too many of them are psychopaths. Well, how many fat cats just take government money to pad their bottom line and run without a second thought?

While many old-school business people may sympathize with these Occupy issues, they are fearful that speaking out could cast them as socialists or threaten their jobs. Or jeopardize funding for their startups.

Others, though, are not so fearful of speaking truth to power. Their businesses are being built on ecosystems of social networking. They are broadly supported and connected – constantly sharing not only the cold information of transactions but also their feelings about how the world could become a better place. Being in touch with so many kindred spirits, they are not so easily divided and conquered.

So, here’s the thing: Plans for the future of innovation funding in Canada are being made now. These plans call for more or less of the same old same old. No one discussing these plans is connecting the dots to issues raised by Occupy. If you are a socially-networked business person and you sympathize even a little with the Occupy movement, then you have the power and the opportunity right now to influence Canada’s approach to business innovation.

Executive complacency blocks innovation

I heard it in two different conversations today and I’ve been thinking the same thing for awhile. In essence, the idea is expressed in a Tweet by Christian de Neef, ( ) a knowledge management consultant in Belgium: ”Innovation is an ongoing battle against apathy, complacency and laziness.”

It may not be totally the fault of those responsible for innovation. More often, I suspect, it is the fault of the money people – the senior executives, CEOs and board members who are too lazy to do the hard work of learning the details of innovations proposed by others. So they’re never pursued. As an advocate of education transformation, I am struck by the parallel between so-called “lazy” high school dropouts and complacent executives.

In my mind, the big issue with learning is motivation. Students are often de-motivated by under-funded and one-size-fits-all school systems and the prospect of limited opportunities, with or without a diploma, because the system is rigged and dehumanizing.

Executives are de-motivated because they’re complacent with their comfortable positions and remuneration. They’ve already got theirs so there’s no need to stretch their minds into new ways of thinking and working. It’s better to just play it safe, do what everyone else does and concentrate on what they know best. Unfortunately today, in most boardrooms that is financial management. Why bother innovating when we can ensure comfortable and even outrageous returns – for us – from mergers, acquisitions, political lobbying, and economic terrorism of our workers?

In fairness, if it can be called that, workers and politicians are too lazy to learn new ways of doing things as well. Things may be bad and getting worse, but for the moment 90% of people have got a job so they’re complacent. “Let’s leave innovation to the dreamers; all I want are my toys – my smart phones, my cars, my ….”

And executives hearing them say “Give the customers what they want because that’s the way to more wealth for us.” Round and round the circle goes. What little innovation that is funded is only marginal and incremental and in areas that don’t rock the boat. Disruptive operational innovation is admired when someone pulls it off but few try.

The tragedy is that there are so many dreamers – voices in the wilderness – with detailed proposals for systemic innovation that can deliver incredible value for vast numbers of people. But executives fail to understand because it takes real work to learn how to change the world. There are easier ways to get ahead. Drop outs are getting their message.

Sacred geometry of the Valentine heart

February 16, 2010 Leave a comment

For the sake of full disclosure, I am an atheist with an appreciation for the teachings and inspiration of religious traditions. Although this article talks about God, please remember that I use the term only because it’s easier than constantly saying “the awesomeness of nature or science.” I also use the word “God” as the traditional placeholder for that which is too sacred to be named.

My story is about the way wise people in the forgotten past may have tried to understand and represent the relationships between man, woman and God, their sacred source.1

Let’s start with the idea that the first people to believe in a single source of everything believed that God is infinite and perfect. God is the ONE. And let’s assume there were ancient mathematicians trying to understand the world using algebra and geometry. So, if they wanted to diagram the idea of God, they used the symbol “1”.


Of course, the earliest people didn’t start off thinking the symbol meant God. They just needed a quick symbol for counting things and there isn’t anything much simpler than a vertical dash. When the wise ones finally got around to thinking about the meaning of life and its source, they borrowed the symbol for one since it was ubiquitous and helpful, which is a kind of definition for God.

So, they had a simple, powerful symbol to express the idea of a single God or source. But how were they to represent man and woman? Well, if God is 1, then man and woman must be symbolized as something less than God. And they must be represented as almost the same but complementary to each other.

manThe wise ones trying to figure this out looked around at nature and at art and they noticed there was a kind of rule for creating beauty. It didn’t matter if the beauty was created by God or by humans. They saw this rule in the relative sizes of plant parts. DaVinci saw it in the proportions of the human body. Builders used it to create beautiful cathedrals. The rule is introduced to every beginning artist as the Golden Ratio or Phi.plant

Because this ratio seemed very mystical and powerful to the ancients, they decided it could be useful in representing a human when compared to God. Assuming those on earth are created in the image of God, the symbol for a human would be the same as for God but much smaller, as in the proportion of the Golden Ratio.

stemThe symbol for God, however, is vertical, as in the spirit reaching for heaven or flowers growing towards the sun . But the symbol for humans couldn’t be the same because the wise ones recognized that humans are not perfect like God. Not everyone is on the vertical path to heaven.

Plus women and men are, in fact, opposites in matters of regeneration.

So the wise ones came up with this: angled dashes to symbolize men and women using the angle halfway between the vertical and the horizontal. And they stuck those symbols on top of the God symbol. In accordance with the Golden Ratio, the human symbols are smaller than the God symbol The result is a mystical “Y”.Y

Wonderful! The wise ones had a new symbol to represent God’s relationship with man and woman. What next? Well, children of course.

Looking at nature again, the wise ones noticed that God is ruthlessly efficient. If some strategy for growing or reproducing life works, then that same successful formula is applied over and over again. Today we call this the science of algorithms but in those days it was simply called holy.


With this in mind, the wise ones took the algorithm they used to represent man and woman and the relationship with the Sacred One, and they repeated it to represent the next generation of man and woman as well. The same Golden Ratio of size and the same angle of divergence from the source. They repeated this formula again for the next generation. family1family2family3finalAnd again and again for each subsequent generation.

In nature and science, when the same formula or algorithm is applied to the results of the previous generation, we call it “recursion.” At least that’s the name we give it today. In the old days it was called sacred or magic because the results were so often amazingly beautiful – like a blessing from heaven. The symbols remain to this day and they’re still important to us even though we have forgotten where they came from.

heartIt’s rather sad that many of us feel so superior when looking at ancient or traditional beliefs. With our “modern” pride in science and technology, we dismiss as primitive superstition the connection that old traditions honor between learning and “spirit”.

But what have we got to show for it? A chaos of competing desires, a vulnerability to the greed of those fixated on short-term goals, information overload and a pervasive lack of meaning.

Don`t get me wrong and jump to the conclusion that I’m saying “everything old is good”. This is not a black and white issue of east versus west, modern versus ancient or religious versus atheist. The thinking and symbols that gave rise to the Valentine image were about “AND.” The mystical interpretation could be, “In order to find meaning in relationship, embrace both sides equally and consider the source and the product i.e. Man AND woman AND children AND God.

But symbols are just symbols – they have no meaning beyond what we give them. The angled dashes of man AND woman could represent east AND west, or modern AND ancient, or religious AND atheist. Regardless of the meaning we attach, though, it’s a geometry that’s helpful for thinking about relationships.

Building MPS business around air travel

February 8, 2010 Leave a comment

The current plan for Mobile Process Services involves partnerships with airlines. That seems obvious since it is a global plan and certainly requires a lot of meetings in the Nordic countries especially. Even so, there is a big question in my mind about how necessary are face to face meetings, even in the initial trust-building stages.

MPS, once it is into the production phase of pilot projects, doesn’t make a whole lot of sense in terms of face to face. Project teams in the Smart Business Network will be drawn from widely dispersed organizations, on short notice and for quick bursts of collaboration. Student researchers will balk at a lot of travel for the expense, whether they’re paying for it, the customer or their university. Not to mention the time involved.

I’m sure as MPS evolves there will be considerable air travel for face to face meetings – maybe a lot. But it seems so anti-green and 20th century to build a partnership plan upon airlines and face to face meetings when the viability of online collaboration tools is staring us in the face.

This blog post by Jessica Lipnack (and its comments) captures the tone of discussions about the future of business air travel.

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Is face-to-face necessary?

“I am writing to you this evening with what seems to me to be a slightly paradoxical request,” the email began. “I am looking for a presenter (live and in person) on the topic of Virtual Teams.”

He was writing from Europe, where the event would take place, with colleagues and clients joining from across North America, Europe, the Caribbean, and Asia.
I was impressed with the emailer’s self-awareness.

blog  it
Categories: Uncategorized

Open Innovation Office | HP Labs – deadline Jan 29

January 23, 2010 Leave a comment
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HP Labs’ Open Innovation Office pursues and coordinates research collaborations with top researchers and entrepreneurs in academia, government and business around the world.
Time is running out for professors to submit their proposals for HP Lab’s Innovation Research program for 2010. January 29 is the deadline. The HP Labs Innovation Research Program is designed to create opportunities — at colleges, universities and research institutes around the world — for collaborative research with HP.

MPS has a research project ready to go. Project-based learning, Enterprise Mobility, BPM, Axiomatic design, Agile …. We just need an innovation-oriented university as sponsor.

Categories: Uncategorized

Sir Terry wants to salvage remnants of Nortel

January 22, 2010 Leave a comment
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Tycoon plans fund to fill Nortel void Matthews seeks $100M-$200M to finance startups before ex-Nortel staff leave area
By Bert Hill, The Ottawa Citizen: CATA Teleforum MP3 Presentation by Mr. Matthews is Now Available
There’s not much left except the brand, and even that is tattered, but Sir Terry Matthews sees the value in salvaging the remnants of Nortel. More to the point, it is the talent left behind from the bankruptcy and breakup that he wants to put back to work.
Matthews sees the former employees of Nortel as a valuable resource that could be lost to Canada if new tech companies don’t jump in to fill the breach. The idea certainly fits perfectly with the plan to create the Mobile Process Services market.