Better Business

I have for many years held the view (as formalised in my Rightshifting work)  that most businesses operate at a small fraction of their potential. Or put another way, they are wasting a great deal (on average circa 80%) of their time, effort, ingenuity, etc., on doing the “wrong things”. By which I mean things that add no value from the customer’s point of view.

This is particularly the case for knowledge-work businesses, a relatively new class of business and one in which common management assumptions, practices and principles – what Ackoff calls “the Analytic mindset” – actively encourage and perpetuate significant dysfunctions. There is much evidence, both anecdotal and formal, to validate this view.

Rather than rant about the present sorry state of affairs, I thought I’d make a constructive suggestion about a different perspective on business – one more congruent with effective, high-performing knowledge-work organisations, and a perspective – what Buckminster-Fuller calls “the Synergistic mindset” – with which I myself have had some experience.

Business

What is a business? Wikipedia has a fairly prosaic definition, and not one which I have much time for. Art Kleiner in his book “Who Really Matters – The Core Group Theory of Power, Privilege and Success” has a definition much closer to my own view:

According to Art Kleiner, “The customer comes first” is one of the three great lies of the modern corporation. The other two being: “We make our decisions on behalf of the shareholders” and “Employees are our most important asset”.

“What comes first in every organization is keeping the Core Group (normally, most of the top executives) satisfied. Note, Core Groups are not inherently bad or dysfunctional, but rather, necessary – and even the best hope we have for ennobling humanity, since organisations are natural amplifiers of human capability.”

Even more broadly than this, I believe businesses serve a social need, and are an essential part of the fabric of our societies, influencing and influenced by society in equal measure, and serving folks’ need for safety, love/belonging, esteem, and other aspects that Maslow refers to in his “Hierarchy of Needs” (plus the need for social connections, which some folks pedantically argue that Maslow missed out on):

Aside: This is also very congruent with Deming’s First Theorem:

“Nobody gives a hoot about profit.”

The Problem

The Analytic Mindset is very poorly suited to knowledge-work and the knowledge-work business. Why is this so?

In knowledge-work, by definition, people work with their brains, learning, exploring and converting knowledge – often new knowledge – into things of value (i.e. goods, services and the experiences implicit in these things).

Given we are talking about groups of people, and learning, then collaboration and state-of-mind (e.g. engagement, enthusiasm, passion, etc.) count for much more than in other, more traditional kinds of business. (I could make  a case for these things mattering much more than generally appreciated in these other kinds of business too, but I’ll stick with knowledge-work businesses for the purposes of this post).

The Analytic mindset, with its tendency to break things down into parts, and the concomitant creation of functional silos within organisations, has a naturally deleterious effect on collaboration. And the traditional Analytic Management scenario, with managers directing the work and workers actually doing it, has a naturally deleterious effect on folks’ morale, engagement and enthusiasm in their work.

Knowledge-work thrives in the presence of intrinsic motivation. The Analytic perspective, however, prefers the extrinsic motivation best suited to task of manual labour and physical toil. Many studies have shown that attempting to encourage innovation, learning, and creative thinking through extrinsic motivation is not only unproductive, but actually anti-productive, demotivating and misdirected.

As Dan Pink points out in his book “Drive”, effective knowledge-work rests on three principles; Autonomy, Mastery and Purpose – three principles largely discounted, suppressed or entirely eliminated by the Analytic world-view.

Aside: Some folks have pointed out that Dan Pink’s work best relates to individuals and individual motivation, and that some different dynamics come to play in team-work and collaboration environments. There’s an interesting discussion on this in this blog post.

So, to sum up, most knowledge-work businesses are (unwittingly) using a default, inherited model of organisation and direction ill-suited to the kind of work they find themselves doing today – and, incidentally, ill-suited to getting the best out of the kinds of people best-equipped for knowledge-work (i.e. creatives, innovators, and the like).

A Solution

The obvious solution is to find a new model of organisation and direction better suited to the dynamics of knowledge-work and the knowledge-workers. In other word, a new mindset, replacing the ill-fitting Analytic mindset. Various businesses have reported their experiences in this journey of exploration and transition, including:

• Semco (Ricardo Semler)
• Motek (Ann S Price)
• Familiar (your humble author)
• St Luke’s (Andy Law)
• Forward Internet Group (London)
• Reaktor (Finland)
• Buurtzorg (Netherlands)

What Might Such a “New Model” Look Like?

[Remainder of this section is work in progress]

Fundamental characteristics of this new model include:

The Agile Connection

Many folks in the Agile community argue that if we apply Agile principles to business as a whole, things would get better. Given that Agile principles, as appear under the Agile Manifesto, are a subset of the above-listed characteristics:

• How many folks think that the twelve Agile principles are sufficient?
• What characteristics appear in the above list that are missing from the twelve Agile principles?
• How critical are these missing characteristics to making better businesses?

Challenges

The key challenge to better knowledge-work business is the current collective mindset that prevails in the majority of organisations in the world, compounded by the same mindset as manifest in society globally. Given its ubiquity and longevity both, swapping it out for something more relevant and useful will likely take much time, and require progress on a broad front.

However, progressive organisations that can insulate themselves from the deleterious influences of wider society, and build and cultivate a view of the world of work more suited to knowledge-work can get to it right now. Some indeed are already some way down the road in this “journey to Radicalsville“.

Of course, the more folks that make the journey, the less radical Radicalsville will look.

What do you think?

– Bob

Further Reading

Reinventing Organizations ~ Frederic Laloux