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Adaptive Work SystemsA Perspective on the Evolution of Socio-Technical SystemsBy Stu WinbyThis paper provides a perspective on the evolution of Socio-Technical Systems as a new emerging form of workorganization, and introduces the concepts and practice of the adaptive work system as the next generation model.The skilled artisans in the late eighteenth centurycould only make a handful of products a day whenworking alone in their small craft shops. However,when that labor was divided among a team of 10 ormore, each performing one or two of the steps andusing specialized tools, literally hundreds of timesthat amount could be produced. By allocating thework components of a complex process to manydifferent individuals, working in parallel, the divisionof labor produces returns many times over. Soprofound were the economic returns to organizingwork based on specialization and the division of laborthat it became the fundamental distinguishing featureof a civilized society, as a contributing factor to theindustrial revolution.As this approach to organizing work became themost economical and efficient approach to business,the issue of workforce organization came into play.Work was initially organized by division of labor andjob specialization managed by the owner of thebusiness, forming a simple hierarchy. Businessesgrew by the process of vertical integration: onehierarchy effectively gets absorbed into another,generating a larger, vertically integrated hierarchy.Rather than each individual having a separatetransaction with the market, the industrialorganization was designed to serve the purpose ofeliminating costs associated with market transactions,replacing them with a single contract of employment.Inside this new vertically integrated organization,markets ceased to operate and the skills, resourcesand time of its employees were coordinated througha strict authority structure. This authority structurewould generally become a hierarchy and would beperceived as management and the driver of economicwealth.The vertically integrated model of factories,specialized production lines, and generally unskillednearly eliminated it previously dominated craftsystem of highly skilled craftsmen. For the nextcentury industrial organizations followed thehierarchy model.By the late 1970s, however, the world started tochange. The rapid growth of the worlds postwarindustrialized economies had begun to reach thelimits of what their domestic consumer markets coulddemand, and further growth required a dramaticglobalization of both production and trade. The newplaying field was the globalized economy.When industry economies started to turn towardsglobalization, many of the working assumptions thatsustained successful business performance for thepast half century started to change dramatically.From an organizational perspective new multi-dimensional organizational designs emerged. Thesimple hierarchy was undergoing dramatic change.The complexity of global organizations required thecreation of new horizontal processes using cross-functional, cross-company teams that work throughcommon business processes. In addition, due toglobalization simple legacy business models have adifficult time surviving an increasingly digitized,globalized, and virtual economy.It is important to note that several important trendsemerged during the early stages of globalization inthe late 1970s. Craft production continued to survive
Copyright @ SAPIENCE NETWORK: All Rights Reserved, DRAFT - Not to be Distributed without the Authors PermissionPage 2and was rapidly finding a foothold in manufacturingbased industries. In many cases craft basedproduction outperforming vertically integratedeconomies of scale in fast-moving and unpredictableindustries like fabric production in northern Italy andparts of France. The essential capability of thesecraft systems was its flexibility and adaptability tochange. Even in the most intensive economies-of-scale industries these new flexible work systems werebeing used. For example, the steel industry in theearly 80s was abandoning its traditional blast furnacetechnology in favor of smaller more flexible mini-mills.These flexible adaptive work systems are the anti-thesis of a vertically integrated hierarchy in that theyexploit economies of scope rather than economies ofscale. They rely on general purpose machinery andskilled workers to produce a wide range of productsin small batches, compared to specialized productionwith a restricted line of products. In slowly changingenvironments, therefore, in which generic productsappeal to a large number of consumers and the rangeof competing choices is limited, economies of scaleare optimal. But in the rapidly globalizing world ofthe late 20th Century, organizations are pinnedbetween uncertain economies and political forecasts,on the one hand, and increasingly heterogeneousconsumer requirement on the other, is whereeconomies the scope gained a critical advantage. Itwas evident that uncertainty and rapid change favorflexibility and adaptability over sheer scale.The other significant trend in the late 70s was therapid spread of an approach to work design calledsocio-technical systems (STS). Research showed thathigh performance resulted when the design of thetechnical system (tools and techniques) and thedesign of the social system (division of labor andmethods of coordination) were congruent. In otherwords, where a high degree of socio-technical fit wasachieved, performance increased. These systems laterbecame known as high performance systems. By thelate 70’s, several hundred new plant designs and justas many redesigns were underway.The design of socio-technical systems and craft basedflexible work systems were very similar in principleand design, employing team based work systems thatare self- regulation using feedback and participatinggoal setting, fewer levels of hierarchy, and greaterdiscretion with workers.The work design and processes of both STS andflexible manufacturing have been successfullyintegrated into most organizations today. It is difficultto find an organization that does not encourage teamwork, employee participation and decision making,and is organized in a more decentralize fashion thanits past hierarchal structure.Uncertainty and Problem SolvingHowever, in the last decade what has changed ischange itself, the rate of change, which has significantimplications in how we organize work. We havemoved from an era of equilibrium to an era ofconstant dis-equilibrium. The rate of change will onlyincrease, thus fueling ongoing industrydiscontinuities, like we experiencing in healthcaretoday.Globalization has matured to where many growthmarkets come from the developing economies, notthe developed economies. First generation successfulenterprises coming out of the developing world aregrowing by penetrating mature markets with low costofferings. New technology continues to shift to amore digitized global economy. Technology,specifically the internet and social mediatechnologies, , have fueled the leveraging ofworldwide assess to knowledge and rapid informationprocessing, leveling the playing field for UScompanies.The rate of change fueled by intense globalization andtechnology is driving the management andorganization of work. The increasing reliance oninnovation for solutions represents one importantshift. The past as a solution set is becoming no longera viable option. Solutions are increasingly not found
Copyright @ SAPIENCE NETWORK: All Rights Reserved, DRAFT - Not to be Distributed without the Authors PermissionPage 3in prescribed processes as in the past, but need to bediscovered and designed. Companies must becapable of both efficient operations and innovatingnew products and services.When environmental uncertainty is low and changeoccurs slowly, and the future is predictable - then taskuncertainty is low, effectively allowing the design /learning and production phases to be completedseparately. The assumption is that even when acomplex task is a decentralized process, requiring thesimultaneous, coordinated efforts of many specializedworkers, its design is somehow centralized, imposedfrom the above hierarchy. However, the level of taskuncertainty has increased dramatically, so not only doorganizations face uncertainty over which particulartask is required by the external marketplace, they arealso uncertain about precisely how they should goabout completing any task or what the correspondingcriteria for success might be. In today’s environment,it is common for no one person to precisely know thespecified work requirements in advance. Rather,each person starts with a general notion of what isrequired and refines that notion only by interactingwith other problem solvers.The amount of task uncertainty is triggered by theenvironmental uncertainties often requiring redesignof the production process as well as the design itself.This means that an equally important task must focuson innovation and variance control, which isperformed, at the same time as the task ofproduction and in the same decentralized fashion.This requires a different model of work organization.When the environment cranks up the rate of changerequired for a new strategic choice and competitiveaction, the complex task must be organized, andavailable human capital reallocated. Instead ofsome individual or group that serves as overseer, thistask organization and resource allocation problem isbest solved by the same individuals who have toperform the task of production. The result is acontinued swirl of problem-solving activity and evershifting interactions between the problem solvers,each of whom has information relevant to thesolution of a particular aspect or dimension of theproblem, but none who knows enough to act inisolation. Nor does any one person know preciselywho knows what, hence problem-solving is not justperforming the necessary combinations of resources(this is what flexible work systems are about) butsearching for and discovering those resources in thefirst placeThe central idea underlying flexible production workand socio-technical systems is that the tasks requiredof most organizations are subject to significantunpredictability and rapid change. Theenvironmental turbulence, rapid rate of change andthe shifts mentioned above strongly suggests ourways of leading, learning, working, innovating andorganizing must be reframed. A basic proposition isthat uncertainty, problem solving, and work designare central to the behavior of the modernorganization, and should be reflected in the nextgeneration work system design.Social ProductionIn the Silicon Valley a new model of economicproduction, referred to as social production, is beingdiscussed with a moderate amount of start-upexamples in progress. In social production thecreative energy of numbers of people are coordinated(typically through the Internet) into sometimes large,significant projects mostly without a traditionalhierarchical organization. People use their own toolsfor production, many of which are based in varioussoftware applications. Tasks are not delegated basedon a central decision-making process but selforganized. A market mechanism tags different pricesto different tasks serving as an incentive to anyoneinterested in performing a task.The point of mentioning this emerging trend of socialproduction is that work is increasing becoming moredecentralized, more network focused, and moremarket driven. The firm, or company structure, thatcame into existence to eliminate cost associated withmarket transactions and has a single employment
Copyright @ SAPIENCE NETWORK: All Rights Reserved, DRAFT - Not to be Distributed without the Authors PermissionPage 4contract, may compete against alternative networkorganizations that employ a social production model.Production work has gone through varioustransformations since the early craft work. Althoughnew ways of working are introduced they don’tnecessarily eliminate the previous approaches towork organization. An evolution of various worksystems are provided below:1. Small Guild Based Production – Craft ProductionSystem2. Scientific Mgmt Production – IndustrialProduction System3. Small Batch Production – Flexible SpecializationSystem / STS4. Optimized “lean” Production – ToyodaProduction System5. Net Work Production - Adaptive Work System /STS6. Social Production – Non-Firm productionOrganizations and Work SystemsThe term work system, as it is used here, refers to anorganizational design and alignment of people,processes, technology and information as comparedto earlier definitions of a particular combination ofjob tasks, technology, skills, management style, andpolicies and practices. The work system designdetermines how work is organized and managed, howpeople will experience work, and how they willperform.The term work system is also positioned as anevolving extension or next generation socio-technicalsystems theory and model.The concept of work system is not limited to a smallgroup or work unit, but as an organizationalarchitecture, specifically a type of networkorganization, that is scalable from the small work unitlevel to an enterprise organizational design. Giventhat work organizations are moving towards, which issmaller decentralized “production units,” the notionof work systems is useful. The term adaptable work-system is used more at the operating level andadaptable organization used at the macro level.This adaptable network model has also beendeployed in larger ecosystems, where, for example, acompany was a single node in a value chain sharing acommon value proposition with other companies whocollaboratively deliver value to a common customerbase. This “value net” arrangement exemplifies thescalability of the work system model.The following section of this paper will provide a briefoverview of key concepts and definition of anadaptive organization, followed by a set of designprinciples and design methodology. Examples of howthis new work system is being implemented will beprovided as well as key questions regarding itsevolution.Adaptive Work SystemsAn adaptable work system is agile and dynamicallychangeable. Adaptable work systems, frequentlyreferred to as network organizations, are bettersuited to complex, rapidly changing, and turbulentenvironments than hierarchal structures, which dobetter in stable, simple routine environments. TheAdaptive Work System is a type of organizationalnetwork that is configured to operate as a highperforming work system (socio-technical system) atmultiple levels of global, enterprise or unit levels ofdesign.Performance characteristics such as agility, speed,flexibility, and re-configurability are typicallydelivered by the adaptive work system. This worksystem incorporates into its design the principles ofinnovation, network sciences, and socio-technicalsystems theory and practice into a new model ofwork organization.A distinguishing feature of this type of work systemsis its approach to the planning and performing ofwork. Adaptive Work Systems approach planningand development /production work as evolving andrefined over a series of iterations, rather than fully
Copyright @ SAPIENCE NETWORK: All Rights Reserved, DRAFT - Not to be Distributed without the Authors PermissionPage 5defined or “frozen” before the iteration begins. Thesework systems are consistent with the pattern ofunpredictable discovery-driven planning, flexiblemanufacturing, and design thinking approaches toproduct and service development.Adaptable work systems can be characterized asfollows:A balance of optimization and adaption processesthrough an ambidextrous approach to managementand organization.Optimization processes focus on efficiency and costreduction. They are documented, measured, refined,and repeated. Adaption processes focus oninnovation, exploration, speed, and constantlyreacting to meet external changes. Optimizingprocesses thrive in low-change, predictableenvironments, whereas adaptive processes thrive inhigh change, uncertain onesOne solution to the execution versus adaptiondichotomy has been organizational ambidexterity(OA) referring to an organization’s ability to do twodifferent things at the same time. An “ambidextrousorganization” refers to an organizational designcontaining not only separate structural subunits foradaption (exploration) and execution (exploitation),but also different competencies, systems, incentives,processes, and cultures for each unit.A balance of hierarchy and networksAn extension of the ambidextrous organizationaldesign is the balance of hierarchy and networks.Most companies have hierarchies that dominate theorganizational structure along with lateral networksthat run horizontal across the verticals. Cross unitteams and matrix arrangements best represent thistypical organizational design. In adaptiveorganizations verticals and laterals still co-exist, butover time verticals move to the background andlateral more to the foreground. This is similar to aprofessional services organization where employeeshave homerooms but spend most of their time onclient projects that involve a mix of functions.Design PrinciplesAn Adaptive Work System is a set of principles put tosome purposeful application and situation. Adaptivework system design principles represent the basicassumptions that guide the organizational designprocess and affect design decisions and thearrangement of design element. These principles areboth extensions of the early foundational work donein socio-technical systems and new emerging designprinciples based on current theory and application ofadaptive work systems. Also, adaptive work systemis principal based not rules based. Rather than adefined set of rules regarding roles, responsibilitiesand activities the process is primarily guided by a setof principles.The core purpose of design is to enable a network ofpeople to efficiently, effectively, and innovativelyproduce and deliver product and service outputs thatmeet customer expectations in the context of arapidly changing environments.1. Open Systems DesignDesign starts from outside the organizationalnetwork by enabling its members to jointlygather information and learn from environmentalconditions, context, and customer expectations.Through a process of foresight-insight anddiscovering the deep needs of customers, thenetwork constructs a vision of its solution tomeet customer needs and accommodateenvironmental constraints and opportunities.The open systems design principle is realizedthrough a number of adaptive work systemprocesses and tools.2. Empirical Process ControlVariance control has historically centered oncorrection rather than learning because plansand processes were viewed as reasonably correctand therefore control focuses on fixing mistakesand explaining mistakes not learning somethingnew that might legitimately alter the plan. A keyprocess of adaptive work systems is to execute
Copyright @ SAPIENCE NETWORK: All Rights Reserved, DRAFT - Not to be Distributed without the Authors PermissionPage 6on its task vision, not to develop plans orschedules, but to focus on progress andadjustment. Empirical process control means thework process is highly visible and the processdetects real time unacceptable social andtechnical variances. When variances are detectedadaption occurs as quickly as possible tominimize further deviation. The work process isself managed where on a daily basis and atdifferent intervals everyone’s work is subject tovariance control, as well the systems and thework context. Context design involves removingvariances outside the work process. The heart ofempirical process control is learning. How can theteam learn at a faster rate following eachiteration?3. Information processingAdaptive work systems are purposely designedfor high levels of information processing.Organizational performance is optimal when theinformation processing capabilities of theorganization fit the information processingrequirements of the work. This was recognizedby Jay Galbraith in 1974 by noting “the greaterthe task uncertainty, the greater the amount ofinformation that must be processed amongdecision makers during task execution in order toachieve a given level of performance”. Decisionmaking among network members is acceleratedthrough various information processing workdesigns and technologies. For each project thecorresponding design of the work system focusesheavily on information processing design,because this drives cycle time, productivity, andquality of output.4. Purposeful NetworksThe network structure is defined by the problemthat needs to be solved or the product or servicethat needs to be designed and developed. It isimportant to identify a critical mass of peoplewho possess the required experience,knowledge, information, and skills that whencombined will enable the task to be completed.The work design challenge is to ensure that theright people have the right conversation toproduce the right output. The interaction ofthose individuals is defined as the work designtask.5. Design for InteractionsDesign for people and interaction, not structureand processes. Design for interaction is the newwork design. It is exemplified by the phrase“design for the right people, right information,right interactions, right knowledge, rightconversation, and right outcomes”. The workprocess establishes roles and infrastructure tocapture and process information real time asparallel interactions are taking place. People areexpected to interact, collaborate, be imaginative,solve problems, and develop product outputs.Large group methodologies like a decisionaccelerator are used for the design ofinteractions, as well an iteration reviews andreconfigurable sessions where design forinteraction occurs.6. Complex adaptive systemsA complex adaptive system is one that consists ofelements, called agents, whose relationships maybe changing all the time. Agents are capable ofself organizing, often following a set of rules. Inadaptive work systems similar properties are atplay, where individuals get work done throughreconfigurable interactions and self organization.Practices are used to drive “emergence” similarto complex adaptive systems.7. Integrated PracticesA system of practices exist which are mutuallysupportive and reinforce each other as they alignwith principles and values. Practices are gearedto be simple, aligned with socio-technical values,generative and not prescriptive, minimal (just
Copyright @ SAPIENCE NETWORK: All Rights Reserved, DRAFT - Not to be Distributed without the Authors PermissionPage 7enough to get the job done, and focus on deliveryof value to the customer.8. Self organizing unitsEmpowered self organizing units or teams aredeveloped around whole pieces or key elementsof the output product. This is determined onamounts of functionality it can design andproduce during an iteration of work. Typicallymultiple nodes or teams work during the sameiteration, each focused on a different set offunctionality. At the end of iteration the workunits review output, identify interdependencies,social and technical variances, and develop therequired re-configurability for better adaptabilityand iteration execution.9. Re-configurabilityAdaptive work systems have the capability of adynamically reconfigurable system that candynamically change its behavior in response todynamic changes in its environment. The worksystem has the capacity to reconfigure asrequired. One key objective of re-configurabilityis to create a variety-increasing work system thatembodies the principle of redundant functions(network members take on multiple, redundantfunctions)10. ValuesKey values are collaboration, diversity, learning,commitment, and empowerment - (the act ofpushing into the work unit and to the individual -authority, skills, information, and knowledge).Positional power is limited, information and factbase discussions drive decision making, anddiversity of thought is encouraged,11. Feed-Forward and FeedbackAdaptive work systems have both feed forwardand feedback systems. Feed-forward passes asignal from a source in the work systemsexternal environment which allows anticipationand greater problem solving capability, andfeedback allow for learning and adjustmentbased on output and customer information.Feed forward used various crowd sourcing toolsand methods.FrameworkThe simple framework for the adaptive work systemis presented below.The model deploys three steps – mobilize, act, andadapt.Step one is to MOBILIZE the network and collectivelydefine the problem, solution, and design the worksystem to implement the solution.Step two is one or more nodes or teams ACT byworking through a series of work iteration to producean agreed upon output. Multiple nodes continue tointegrate their work as they produce their outputs.Frequently an integration team integrates in processwork and drives emergence. This serves as a fly wheelof sorts in providing high leverage iteration to work inprocess.In step three outputs produced in the iteration alongwith customer and environment data are reviewedand the work system reconfigures to ADAPT. The actand adapt steps continue until the customer issatisfied with the output.The work system framework serves as a platform forvarious applications. Applications are designprocesses. Some of the most deployed applicationsare:
Copyright @ SAPIENCE NETWORK: All Rights Reserved, DRAFT - Not to be Distributed without the Authors PermissionPage 81. Business model design2. Product design3. Service design4. Experience design5. Work design6. Transformational designPerformance and ResultsThe adaptive work system continues to be tested asan action research work innovation. Initialimplementation was first started in 2008. Mostimplementation has been in the health care industryand technology sector. In general, the results arepositive and suggest the adaptive work system is anorganizational capability whose characteristics andbenefits do not exist in traditional organizations andthus provides a source of advantage. Reduced time to value (speed). Customerscontinue to comment on the reduced cycletime in getting to a defined desired outcome.A number of case examples support thisfinding. Maximizes productivity of resources (costs).The methods of parallel processing andretrospectives continue to eliminate waste,and produce scale and leverageopportunities by maximizing productivity ofresources. Scale and leverage: The ability of adaptivework systems to scale and leverage has had asignificant impact on company results.Although not mentioned in this paper aninnovation and optimization rapid diffusionprocess referred to as the Work InnovationNetwork that is part of the adaptive model isable to secure % improvement in multiplesites at the same time. Customer co-creation and on-goingengagement. The work process is driven bythe customer. Ethnographic data as well ascustomer requirements drive the output.Typically as work is completed the customeris also learning and changes are made toaccommodate this learning. This processtherefore has strong customer commitmentand satisfaction for results produced. Increased and continuous innovation.Adaptive work systems bring the disciplineand practices of design and innovation to allwork challenges. Accelerates stakeholder commitment(empowerment). All key stakeholders areactively engaged in the definition of theproblem and solution and work design.Customers drive the work product. Significantly increases social capital(integration). The network rapidly developsrelationships with each other which getcontinued developed over the period of thework project. Increased learning. Probably the single mostimportant driver of performance is theorganizations develop capability to learn.Most work is defined as low cost rapidlearning cycles in order to reduce risk anddesign/develop output. Increased capacity to adapt. Increases in theorganization’s ability to respond to changemore quickly and to adapt to shift in theenvironment (customer needs and market/competitor moves).
Copyright @ SAPIENCE NETWORK: All Rights Reserved, DRAFT - Not to be Distributed without the Authors PermissionPage 9 Increased and continuous innovation.Adaptive work systems bring the disciplineand practices of design and innovation to allwork challenges.SummaryThe early work of Trist and Emery who founded socio-technical systems (STS) has provided the theoretical,practical, and values based foundation for latergeneration works systems to be built. In the late 80searly 90s STS began to disappear both academicallyand in practice, but was successful adopted intomainstream organizations. Today, for example, theword “engagement “ is overused at the shop floorlevel as well as in the board room, and back in the 80sit was referred to as employee involvement, and thanearlier participation. These were key principles in STSwhen there was no room for employee voice in thework process.STS was initially conceptualized as a shop floormanufacturing process and then moved to knowledgeworker office environments. Today, the adaptivework system model as an evolution of STS createsvalue at all levels of the enterprise and ecosystem.The model also operationalizes network organizationswhich have been limited by the notion of informalsocial network or high level “value nets”. Theadaptive work systems defines networks asproduction systems, which is a much differentcapability then previously defined as a networkorganization.This work is still in its early stages and as with allinnovations will take on-going learning and actionresearch to find its true value.References1. Austin, Rob and Devin, Lee. Artful Making – What managersneed to Know about How Artist Work?2. Emery, F and Trist, E. Towards a Social Ecology. London andNew York. Plenum Press: 19733. Galbraith, Jay. Organization Design - an Informationprocessing View. Interfaces 19744. Geerat J. Vermeij. The Evolutionary World – How AdaptionExplains Everything from Seashells to Civilization. New York:St. Martin’s Press; 2110.5. Lawler, Edward E and Worley, Christopher G. ManagementReset – Organizing for Sustainable Effectiveness. Chapter 7:Sustainable Work Systems. Jossey Bass, 2011.6. Malone, Thomas W. The Future of Work. Boston,Massachusetts; Harvard Business School Press; 2004.7. Martin, Roger. The Design of Business. . Boston,Massachusetts; Harvard Business School Press; 2009.8. Miles, Raymond E; Miles, Grant; and Snow, Charles.Collaborative Entrepreneurship – How Communities ofNetwork Firms Use Continuous Innovation To CreateEconomic Wealth. Stanford University Press. 2005.9. Pava, Cal. Managing Office technology – An OrganizationalStrategy. The free Press. 1983.10. Trist, Eric and Murray, Hugh. The Social Engagement of SocialScience – A Tavistock Anthology. Volume II: The Socio-Technical Perspective. University of Pennsylvania Press, 1993.11. Winby, Stu. Adapting to New Realities: The Emergence ofnetwork Organizations and Work Systems, White Paper, 201012. Winby, Stu. Work Innovation Network: Concepts andPractice. White Paper, 2010.13. Winby, Stu. Transformation Design. White Paper, 2011Notes:__________________________________________________Stu Winby- Is a Managing Partner of Innovation Point and alsofounder of the Sapience Network – both Silicon Valley Firms. Aleading thought leader in new forms of collaboration andcoordination afforded by innovative work designs and emerginginteractive technologies that effect innovation and businessperformance.