Teamwork : People and Organizations

Permeable boundaries:

Organization Design

Based on the second law of thermodynamics, isolated/closed physical systems evolve towards a higher chaos.

On the contrary, life is an open system far from equilibrium, it is evolution from disorder (original chaos) to order. The difference is that life is an open system: any part is connected with its environment and exchanges information and energy with it (Ilya Prigogine, Nobel Price 1977 & Aharon Katzir). This is what non equilibrium thermodynamics deal with.

A system that wishes to innovate and evolve must be engaged in an on-going exchange with its environment.

Translation to organizations:

Multifunctional project teams. Strategy becomes a way to structure the chaos to compete on the edge.

Minimal critical rules:

Process Management

Equilibrium thermodynamics has 2 principles, Euclidian mathematics is based on 7 axioms. Researchers at the Santa Fe Institute (one of the principal centers for the study of complex organisms) showed that very few rules are required to produce complex, highly ordered behavior. In fact, it was shown that systems that evolve to a higher order learn new rules, but for each rule they add, they must shed an earlier one.

Translation to organizations:

It is desirable to have only a few important and explicitly understood rules, which are aligned with the organization’s values and tacit norms. All processes must cross-cut through the company.  

Flexible architecture:

Resources Management

The first two principles apply to both information and biological systems. Biology also teaches us that species have evolved, thanks to “flexibility in the component parts rather than their precise adaptation for their functions” (Stephen Jay Gould, evolutionary biologist).

Feathers did not evolve originally as a flight mechanism. Many feathered birds do not fly! Feathers are used for thermoregulation. However, as a species grew more feathers, for thermoregulation, they became sufficient at one point to enable the bird to fly.

Latent potential enables innovations in functions.

All biological organisms maintain massive redundancy: we have 2 kidneys, but can live with 1; we can live with a reduction in our liver mass, etc. The extra material becomes available to construct evolutionary novelties.

Redundancy enables additional or new functions.

If an organism does not have sufficient variety in its own resources, it must be part of a larger ecosystem, with which it must have permeable boundaries. Parasites live on other organisms: fungi are a good example. It is the number of possible connections that influence the ability to innovate through new combinations.

Variety provides possibilities for innovations through new combinations.

Translation to organizations:

We need to move people back and forth on a Dual Career paths to increase variety in skills and to improve flexibility, we need flexibility in resource allocation processes.

Aligned aspiration:

Create a Vision

Homo sapiens sapiens: man knows that he knows. Human beings have self-awareness and ego. They work hard to preserve and enhance their identities. They create OGSM: abstract visions, set goals and choose strategies to reach their goals. Human beings and organizations seek to understand the conditions that will lead to their improvement and evolution in order to deliberately create these conditions. When people are aligned towards the broad goals of the organizations, when they have common values that they share, cross boundary teams bring changes. By setting their own goals aligned with the broader one, they are pulled together and onward, like by a magnet. The essential qualities of engagement, widespread commitment and durability come through share visioning (as opposed to vision sharing).

Translation to organizations:

Invest in long term, broad based employee involvement at all levels. Do not use top-down threats nor speeches, but the basic principles of change management: clear vision, sense of urgency, guiding coalition, communicate and get alignment to gain and sustain momentum.

Change:

Strategic Business View

How long does it takes for the total amount of human knowledge to double? Around year 1000 it took 200 years, around 1850 it took 30 years, today it takes about 5 years. We have about 50 billion neurons. How to keep up with the speed of change? Why put up today a strategy for year 2005 when the total knowledge would have doubled by then?

Uncertainty should be viewed not as an obstacle to long term success, but as a resource for business opportunities. Strategy development is an on going process and strategy review should be part of strategic business planning.

What we have learned from skin biology: we must look at a product for the effect it brings to the skin (outside in), but also from the cell point of view (inside out) to understand all aspects of efficacy and safety. From a business point of view, we need to apply the same principles and look at the inside out (the market viewed by the company) and the outside in (the company viewed from the market) perspectives. Merging these two aspects will create strong ambitions and innovations.

Translation to organizations:

Review strategies at each strategic business review, and realign based on current knowledge. Look inside out and outside in.

Innovation management:

Blur the Offer

Sustainable innovation is a three dimension path: product and technology leadership – customer and consumer intimacy and loyalty – operational efficiency and excellence.

Aggressive involvement of lead customers and suppliers as well as strongly driven and proactive ideation processes, will increase greatly the robustness of the top of the idea funnels. Use this robustness to increase speed, value and globalization. Focus increasingly on the value of “intangibles”, consider the “offer” i.e. the mix between economic, information and emotional exchange between the company and the consumer.

Translation to organizations:

The notion of RD&E as a cost center has lead companies to incremental products innovations, consider Technology and Innovations as investments. Spin in (acquire) or spin out (create new venture) for innovative technologies.  Involve suppliers and customers (consumers) and focus cross functional teams on the intangibles and the 3 components of the offer.

Innovation:

Knowledge Network

Innovation is a mindset. “Common sense is the collection of prejudices acquired by the age of 18” , “the significant problem which we face will not be solved by using the same level of thinking that created them” (Einstein). To innovate we need people that see things differently, we have to be able to understand, trust and work with people who see reality differently from the way we see

Translation to organizations:

Create and support the exchange and cross-fertilization of both tacit and explicit knowledge. It makes possible the diversity of perception and experience that is essential to the learning and the unlearning that underpins organizational change and innovation. 

Globalization:

Process excellence

In today’s world where everything is known within nanoseconds, around the globe, where information and products are available anywhere, anytime, globalization of the offer is a must. Globalize or die. One cannot prevent competitors from entering with a lock and a key: there is always more than one technology to reach the same consumer benefit. Retinol is a good example. Connection to the Internet is mainly achieved today through a PC and telephone line. What will this be tomorrow? Appliances? Cable? Both?

To win in the market place, speed to market is key. Not beating the competition in product test.

Translation to organizations:

Create a reward system for process innovations. Rationalization, standardization, streamlining are more important when they apply to the processes than to the product lines (where they could increase consumer dissatisfaction).
  
© Alain Khaiat 1999

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