Organizational Design in the 21st Century

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The organization is broken

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1949 1969 1989 2009

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PR O D U C T I V I T Y

W A G E S

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13.3

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1949 1969 1989 2009

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SH A R E O F I N C O M E , T O P 1 % , U S A

G E R M A N Y S W I T Z E R L A N D P O R T U G A L J A P A N I T A L Y S P A I N F R A N C E F I N L A N D S W E D E N D E N M A R K N E T H E R L A N D S

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1949 1970 1991 2012

�4

PR O D U C T I V I T Y / G L O B A L O U T P U T

0.0%

1.7%

3.3%

5.0%

1965 1980 1995 2010

�5

RE T U R N O N A S S E T S

0

23

47

70

1958 1982 2006 2030

�6

AV E R A G E L I F E S P A N , C O M P A N Y O N S & P 5 0 0

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Likely to be computerized

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Actively Disengaged

�9

Every day, millions of

people wake up and play

a boring RPG called

‘Professionalism’”

“C O R Y D O C T O R O W :

Every day you see me,

that’s the worst day of

my life.”

P E T E R G I B B O N S :

“

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Wait. What about everything else?

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0

300,000

600,000

1946 1966 1986 2006

C O N F L I C T D E A T H S , A L L T Y P E S , 1 9 4 6 - P R E S E N T

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0%

50%

100%

1880 1940 2000

S H A R E O F W O R L D W I T H A B A S I C E D U C A T I O N

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$1

$1,000,000

$1,000,000,000,000

1961 1981 1997 2000 2001 2003 2007 2011 2013

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CO S T P E R G I G A F L O P

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33%

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1995 1999 2003 2007 2011 2015e

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NO I N T E R N E T

N O S M A R T P H O N E

G L O B A L A D U L T P O P U L A T I O N W I T H . . .

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Category Starting Cost Current Cost Timeframe Cost Performance Improvement

3D Printer $40,000 $100 7 years 400x

Industrial Robots $500,000 $22,000 5 years 23x

Drones $100,000 $700 6 years 142x

Solar $30/KwH $0.16/KwH 30 years 200x

Sensors $20,000 $79 5 years 250x

Neurotech $4,000 $90 5 years 44x

DNA Sequencing $10,000,000 $1,000 7 years 10,000x

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0

8

16

24

AverageFortune500

$GOOG $FB $TSLA Uber Snapchat Oculus Rift

Y E A R S T O $ 1 B V A L U A T I O N / C A P I T A L I Z A T I O N

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What should I believe?

T B H , I T ’ S H A R D T O S A Y .

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Work is simultaneously easier and harder than ever before.

B U T I N P O C K E T S , W E ’ R E F I G U R I N G O U T H O W T O D E A L "

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�20

�21

�22

WHAT’S HAPPENING

HERE?WHAT’S

HAPPENING HERE?

WHAT’S HAPPENING

HERE?

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�24

�25

�26

�27

The legacy organizations are brokenthat we designed 100 years ago

legacythat we designed 100 years ago

We’re pursuing a normative

definition of an “organization”…

that is, what it should be in the

21st Century

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Should work be easy? Should it

be fun? Should it be a happy

place? Should it be perfect?

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We’re building an understanding

from lateral and direct models,

and through applied practice.

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Something with “The Quality”…

1. is alive; invigorated, but not

literally living

2. is whole; free from

contradictions, but not

enclosed or cut off

3. is comfortable; tuned, fit, not

just soft or yielding

4. is free; wild, true to nature,

but not without constraint

5. is exact; particular to

specification, but not perfect

6. is egoless; unselfconscious

but not without the maker’s

“self”

7. is eternal; self-maintaining,

but not mysterious, or

religious

Christopher Alexander

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GO O D B U I L T E N V I R O N M E N T S

Five main performance criteria:

1. Vitality

2. Sense

3. Fit

4. Access

5. Control

Plus two meta-criteria:

6. Efficiency

7. Justice

Kevin Lynch

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GO O D C I T I E S

1. High-quality output, as judged by the team’s customers

2. More capable as a team than when they started working together

3. Makes significant positive contributions to the lives of the individuals on the team

Wageman, Hackman & Lehman

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GO O D T E A M S

1. Consensus Oriented

2. Participatory

3. Follows the Rule of Law

4. Effective and Efficient

5. Accountable

6. Transparent

7. Responsive

8. Equitable and Inclusive

United Nations

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GO O D G O V E R N A N C E

1. Individuals and interactions over Processes and tools

2. Working product over Comprehensive Documentation

3. Customer collaboration over Contract negotiation

4. Responding to change over Following a plan

Agile Manifesto

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“G O O D ” = A G I L E

IDEAS:

1. Interfaces

2. Dashboards

3. Experimentation

4. Autonomy

5. Social

SCALE:

6. Staff on demand

7. Community and crowd

8. Algorithms

9. Leveraged assets

10. Engagement

Exponential Organizations

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“G O O D ” = F A S T G R O W T H

M A S S I V E T R A N S F O R M A T I O N A L P U R P O S E

Reinventing Organizations

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Formal Roles Innovation Empowerment Self-management

Processes Accountability Values-Driven Wholeness

Meritocracy Stakeholders Evolutionary Purpose

E V O L U T I O N A R Y O R G A N I Z A T I O N S

P L U R A L I S T I C O R G A N I Z A T I O N S

A C H I E V E M E N T O R G A N I Z A T I O N S

C O N F O R M I S T O R G A N I Z A T I O N S

“ G O O D ” = H E A L T H E W O U N D S O F M O D E R N I T Y

1. Individual benefit as

important as the overall

corporate benefit

2. Strategy before technology

3. Listen to the voice of the

employee

4. Learn to get out of the way

5. Lead by example

6. Integrate into the flow of

work

7. Create a supportive

environment

8. Measure what matters

9. Persistence

10. Adapt and evolve

11. Employee collaboration also

benefits the customer

12. Collaboration can make the

world a better place

Future of Work

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“G O O D ” = C O L L A B O R A T I V E

1. Lead for the long run

2. Value diversity

3. Reinvent market incentives

4. Foster collaboration

5. Drive full transparency

6. Create thriving communities

7. Scale true accounting

8. Restore nature

9. Redefine reward systems

10. Ensure dignity and fairness

The B Team

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“G O O D ” = S A V E T H E W O R L D

1. Purpose over Profit

2. Empowering over Controlling

3. Emergence over Planning

4. Networks over Hierarchy

5. Adaptivity over Efficiency

6. Transparency over Privacy

Responsive Organizations

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“G O O D ” = A D A P T A B L E

1. Improve understanding of what coworkers do

2. Reinforce the people who are integrators

3. Expand the amount of power available

4. Increase the need for reciprocity

5. Make employees feel the shadow of the future

6. Put the blame on the uncooperative

Yves Morieux’s Six Simple Rules

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“G O O D ” = A D V A N T A G E A M I D C O M P L E X I T Y

1. Never add a process or a layer unless you absolutely have to

2. Never blame a problem on someone’s mentality or mind-set

3. Don’t let decisions be escalated to you

4. Don’t rely on financial incentives

5. Don’t try to measure specific behaviors

Yves’ Five (Actually) Simple Rules

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“G O O D ” = A D V A N T A G E A M I D C O M P L E X I T Y

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Organizational Design Criteria

Ever-Better Organizations

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Eight performance criteria:

1. Purposeful and important

2. Quality, achievement and context fit

3. Alive and interesting

4. Fairness and equality

5. More, and more forms of power for all

6. Connected beyond our walls

7. Supportive, safe and comfortable

8. Transparency, signaling and internal connectivity

Ever-Better Organizations

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2. Dean Baker, Center for Economic

and Policy Research, “The

Productivity to Paycheck Gap: What

the Data Show” 2007

3. World Top Incomes Database and

Max Roser

4. University of Notre Dame Mendoza

School of Business

5. John Hagel III, John Seely Brown,

Tamara Samoylova & Michael Lui,

“Success or struggle: ROA as a true

measure of business performance”

Deloitte University Press 2013

6. Richard N. Foster and Sarah Kaplan,

Creative Destruction 2001

7. Carl Benedikt Frey and Michael A.

Osborne, “The future of

employment: how susceptible are

jobs to computerization?” 2013

8. Gallup US Daily Survey, 2014. N =

80,837

9. Perhaps apocryphal, but cited to

Cory Doctorow. Also, Office Space

11. Human Security Report Project,

Battle Deaths from State-Based

Armed Conflicts by Region,

1946-2007

12. Max Roser visualization of data

from van Zanden, J.L., et al., “How

Was Life?: Global Well-being since

1820” 2014

13. Top 500 & Wikipedia

14. Benedict Evans, Mobile is Eating the

World

15. Michael S. Malone, Exponential Organizations 2014

16. Ibid

23. Horace Dediu, Seeing What’s Next

2013

24. Yaneer Bar-Yam, “Complexity rising:

From human beings to human

civilization, a complexity profile,”

2002

25. Ray Morris, Operating Organization

of the Union Pacific and Southern

Pacific System, Railroad Administration, 1920

Sources by page

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31. Christopher Alexander, The Timeless Way of Building 1979

32. Kevin Lynch, Good City Form 1981

33. Ruth Wageman, Richard Hackman

and Erin Lehman, “Team Diagnostic

Survey: Development of an

Instrument”

34. Yap Kioe Sheng, “What is Good

Governance?” United Nations

Economic and Social Commission

for Asia and the Pacific

35. agilemanifesto.org 2001

36. Michael S. Malone, Exponential Organizations 2014

37. Frederic Laloux, Reinventing Organizations 2015

38. The Future of Work Community

39. The B Team

40. responsive.org

41. Yves Morieux, “Smart Rules: Six

Ways to Get People to Solve

Problems Without You” 2011

42. Ibid

Sources by page, continued

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