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Building smarter organizations


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  • Ali - thanks for your encouraging comments. I haven't posted much because I'm just out of a large organization where SlideShare was blocked (worries of IP leakage and reputation threat). I'm add some more slide decks as I go along.

    I think smaller organizations are much more attuned to their environment (including their customers) and are, therefore, much more dynamically adaptative than large orgs. There is a whole bunch of reasons which this set of slides only really touches on.
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  • Gordon. with such clarity in thoughts I wonder why you do not contribute more presentations. I like your style. I smell in your words a great writer of comedian stuff. A mi right? I may add to your excellent presentation that comparing the 'time consumption' in big organizations with small ones we shall see a more company-centric one in big organizations leaving little time to care for the customer.
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Building smarter organizations

  1. 1. Building smarterorganizations Gordon Vala-Webb#smartorg@dynamicadaptatn February 2013
  2. 2. Our agenda1. Do we need smarter organizations?2. Designed for the “old” world3. The response so far4. Bigger cities are smarter, the work is smarter – but not organizations?5. Why are large organizations not smarter?6. What can we do?7. If we get it right . . Slide 2
  3. 3. Who am I? I help leaders improve their business results by transforming how their people collaborate, innovate and share Previously KM Director: • PwC Canada • Gov’t agency Global lead (design / value) PwC social Slide 3
  4. 4. Do we need smarter organizations?(Drucker, Dilbert and Debs) Slide 4
  5. 5. Drucker“Most of whatwe callmanagementconsists ofmaking itdifficult forpeople to gettheir workdone” Slide 5
  6. 6. The Dilbert index . . . most workers could not careless about their work 71% Of American workers are "not engaged" or "actively disengaged“ in their Slide 6
  7. 7. What would Debs think?Sickness absence, presenteeism and labourturnover costs – for example - the UKeconomy yearly £26bn Source: UK Foresight Project on Mental Capital and Wellbeing Slide 7
  8. 8. A comparison? Large Sheep organizations Slow ? Follow the flock ? Not fun ? Can’t fly ? Slide 8
  9. 9. Designed for the “old” Slide 9
  10. 10. Our organizations were designed for the “old” –easier - world Old world New world Stable Complex Repeatable processes Discontinuity Authoritative knowledge Ambiguous Adapted from Kent Greenes, “Knowledge Leadership, KMWorld Slide 10
  11. 11. They used hierarchy – great for repeatability,planning and control but terrible for innovation KM strategy in a KM WorldSlide 11
  12. 12. And in the “new” world the pressure to beinnovative is mounting. . .Global hyper-competition. . .Power shifting from West to East. . .Climate change. . .Slow growth. . .Youth unemployment. . .Public sector fiscal Slide 12
  13. 13. If we don’t get it right - in extreme cases - extinction! Image source Slide 13
  14. 14. The response so Slide 14
  15. 15. The response so far . . . control culture Source Slide 15
  16. 16. The response so far . . . Belt tightening• Exhortations “do more with less”• Cost controls• Business process re-engineering• Mergers / acquisitions• Offshoring• Remote Slide 16
  17. 17. Bigger cities are smarter, the work issmarter – but not organizations? Slide 17
  18. 18. For cities, bigger is better With each doubling of city population, each inhabitant is, on average, 15 percent wealthier, 15 percent more productive, 15 percent more innovative, and 15 percent more likely to be victimized by violent Source: Slide 18
  19. 19. At the same time, work has been getting “smarter” Source: Slide 19
  20. 20. “Smart” work now makes up 41% (and growing) ofjobs in the US Slide 20
  21. 21. But larger companies aren’t smarter (like cities) Cities – get smarter Companies - don’t or get less smart Power rules – city versus companies Source: Slide 21
  22. 22. In fact, average productivity drops by 25% foreach order-of-magnitude increase In companies with over 1,000 employees, the average productivity of an employee drops by more than ¼ for each order-of- magnitude Slide 22 Source:
  23. 23. Why are large organizations notsmarter? Slide 23
  24. 24. Three reasons larger organizations are notsmarter1) The Maze-trix2) Mind the complexity gap3) Old Slide 24
  25. 25. 1) The maze-trix: silos increase efficiency within aunit but create boundaries that make co-ordinatingacross difficult Big Cheese Assistant2nd Level 2nd Level 2nd Level Cheese Cheese Slide 25
  26. 26. Maze-trix - responsibility matrix Source: Slide 26
  27. 27. An maze-trix example - approving a contractchange request at an aerospace company Source: Slide 27
  28. 28. Symptoms of the maze-trix• Exponential growth of decision points• Unclear reporting lines• Meeting overload• Email overload We need to schedule a meeting• Slow information flows To plan for the meeting• Lack of “complete picture” To discuss why we have• Decision paralysis so many meetings _mug-168219332576188320 Slide 28
  29. 29. 2) Mind the complexity gap: Being bigger meansmore bureaucracy – and that demotivates peopleso higher-performing staff tend to leave Complexity Mgmt & rules % of highly engaged / performing staff Adapted from: “Netflix Culture” Slide 29
  30. 30. Mind the complexity gap – it Source: Slide 30
  31. 31. Symptoms of the complexity gap• Increasing bureaucracy and formality• Inefficient / over-engineered internal processes• Decrease in % of high performers• Decrease in % of engaged or highly engaged staff• Wait times for internal Slide 31
  32. 32. 3) Old think: hierarchy is in our corporate blood “U.S. corporations are historically imprinted with a hierarchical model— you develop something at headquarters, you scale it, and then you diffuse it.” Rakesh Khurana Harvard Business School Slide 32
  33. 33. Old think = control culture Concentration of powerequals abuse of power . . Suchconcentrations are blood clots in the circulatory system of society. . . The circulation of wealth, resources, and,especially, ideas, is blocked. Ina healthy system, information flows are unimpeded by clots of power or the sclerosis of hierarchy. Philip Slater The Chrysalis Effect Slide 33
  34. 34. Old think versus new think: key elements Old think New think Control culture Integrative culture People as thinking People as feeling animals animals that feel that think External reward Internal reward Selfish Connected Brain is fixed Brain is Slide 34
  35. 35. Symptoms of “old think”• Leadership by command and broadcast• “SMART” performance goals• Monetary rewards• Fault-finding• Low trust Slide 35
  36. 36. What can we do? Slide 36
  37. 37. It can be done . . .“30% of the topbanks we studiedwere able toimprove theirefficiency whilemaintaininghealthy growth” Source: Slide 37
  38. 38. . . . By combining hierarchy and networks1. Leadership renewal2. A new organizational bicycle3. Slide 38
  39. 39. 1) Leadership renewal – essential elements “The soft stuff is• Reject the “control” culture the hard stuff” Jack Welch• Establish shared goals• Connect through conversation• Embrace emergence• Transparency in decision making• Build trust• Learn to use social media• Authentic selves (Empathy versus egotism) Slide 39
  40. 40. 2) A new organizational bicycle – social networking “A bicycle makes man the most efficient mover on the earth. A computer is a bicycle for our mind.” Wilson Slide 40
  41. 41. The old bicycle doesn’t work very well Emailed Slide 41
  42. 42. The new bicycle - social networking platformsWith emails . . . With social networking . .. . . information, ideas andquestions become isolated - theyonly go to the people who receivedthe message. . . trying to have a conversation isreally hard. . . it becomes a guessing gamewhen working on a documenttogether (“who made whatchanges to which version?”). . . the information disappearsover time so that anyone joiningthe conversation late has a hardtime coming up to speed Source: 42
  43. 43. The new bicycle will enhance idea and knowledgeflows by moving from closed / push to open / pullEmail Social platformClosed (one to few) Open (many to many)Push Pull (subscription)Inside OutsideEphemeral PersistentBroadcast User-generated “We shape our tools, and thereafter our tools shape us.” Marshall Slide 43
  44. 44. Idea and knowledge flows have to across bothinternal and external boundaries Outside Near-side 44
  45. 45. Note: Some issues will need to be addressed Training Intellectual Regulatory property requirements leakage Records management Security Privacy / Reputation Risks Confidentiality $ 45
  46. 46. 3) Simplicity –drivers of complexity Source: Addressing general and administrative (G&A) complexity The next frontier in Slide 46
  47. 47. Simplicity: Its not that simple but organizationsneed to work to reduce their complexityManage down their complexity:• Products• Processes• Organizational capabilities• Information Slide 47
  48. 48. If we get it right . . Slide 48
  49. 49. If we get it wrong . . . extinction!“It’s not the strongest of the species that survives, northe most intelligent, but the one most responsive to change.” Charles Slide 49
  50. 50. If we get it right . . Slide 50 Source:
  51. 51. If we get it right . . . Google’s share Slide 51
  52. 52. Thank you and tell me what you thinkGordon (at) DynamicAdaptation.comwww.DynamicAdaptation.comTwitter: @dynamicadaptatnThis publication has been prepared for general guidance on matters of interest only, and doesnot constitute professional advice. You should not act upon the information contained in thispublication without obtaining specific professional advice. No representation or warranty(express or implied) is given as to the accuracy or completeness of the information containedin this publication, and, to the extent permitted by law, Gordon Vala-Webb and DynamicAdaptation does not accept or assume any liability, responsibility or duty of care for anyconsequences of you or anyone else acting, or refraining to act, in reliance on the informationcontained in this publication or for any decision based on it. Slide 52© 2013 Gordon Vala-Webb. All rights reserved.