The knocker-upper, the stoker, the lamplighter and the president of electricity are all titles that belong to the past. They appeared as a result of technological change, they flourished for a time and then they disappeared back into the darkness. Today is no different.
Never before, however, have the innovations been as frequent and as generally accessible. Technology enabling the flow of information and materials from homes to offices, factories, world capitals, and remote villages has transformed the way products are made and services delivered. Rapid technological improvement requires a flexible and fluid organisational structure that risks insufficient control and unnecessary error in more mature operations. Conversely, requirements for error-free mature operations may conflict with the innovative behaviour needed for continuing improvement. This conflict in the life cycle of organisations is not new and must certainly be recognised in developing structures and people that will encourage innovation, while maintaining that which is necessary for the ongoing operation of the organisation
… stated the National Research Council report on People and Technology in the Workplace (1991). It feels a lot like that in 2017.
The “solution” to this change, as it was in the past, as it often is today is to bolt on a new department. To let it grow and then to let it die. To suffer the pangs of re-organisation. It doesn’t have to be like this. You can design organisations to evolve but it requires quite a bit of transformation from what exists in many organisations today.
It is difficult to organise around that which you cannot see. It’s important to know the details and to understand the landscape which you are operating in. This requires some form of map. But a map isn’t any old diagram, it has specific characteristics that enable you to see the position of pieces and how things can move. An example of a map of business anchored around user needs is given in figure 1. A map has all the characteristics listed in the grey box.
Figure 1 — A Wardley Map for an online photo business in 2005
With an understanding of the landscape you can now organise around it
The principles of FIRE (fast, inexpensive, restrained and elegant) as promoted by Lt Col. Dan Ward of the USAF and exhibited by SOCOM (special operations command) are applicable here. You need to beak the landscape into small components building teams around it. You need to think small.
In Amazon this is exemplified by the “two pizza” model, in Haier (the world’s largest electrical manufacturer) you have similar cell based structures. I’ve provided an example in figure 2.
Figure 2 — A Wardley map broken into small cells
Those cells interact with each other through the interfaces. Cells can also grow due to the success of a component. However the component and the map can be subdivided to keep the principle of small cells. We can build teams of teams or cells of cells and maps of maps. Each cell can be given autonomy, mastery over its own space and a purpose.
A management structure can also be overlaid on top. This is not done by telling the members of a cell the minutiae of what to do but by measuring their performance against agreed criteria, a fitness function. This provides a starfish model of operating where the day to day action of decision making is decentralised into the cells and a spider of management hierarchy overlaid on top providing a direction. Such structures are uncommon but slowly diffusing.
However, there’s a complication. Those components that the cells govern don’t just grow, they evolve through supply and demand competition and as they do so their characteristics change — see figure 3.
The techniques and methods we use to manage a component has to change as the component evolves. The way we manage the exploration and development of some new discovery is not the same as the way we manage the volume operations of a highly industrialised component. We have to embrace multiple methods.
It’s not enough to populate the cells with the right sort of aptitudes (e.g. finance or engineering or operations or marketing), we also have to consider the right sort of attitude. For example, software engineering in the uncharted space is more agile but once that same component industrialises then six sigma becomes more appropriate. Same with purchasing, with finance, with marketing there is no one size all fits all method but multiple that you have to use — see figure 4.
Figure 4 — Different methods
In the uncharted space you’re dealing with the unknown, the rare, the poorly understood and the changing. You have to be happy with failure, with gambling and gut feel. However, when that same component evolves to being more industrialised then it is all about volume operations and reducing deviation for something that is common and standardised. You have to be happy with the relentless drive for efficiency, the complex scientific modelling required and the intense pressure of consistency. The cultures of the attitudes are very different.
We call these attitudes — Pioneer, Settler and Town Planner. An example is provided in figure 5 (remember this map is from 2005). I’ve also added a list of common characteristics in figure 6.
Figure 5 — Pioneer, Settler and Town Planner
Figure 6 — Characteristics.
Pioneers are brilliant people. They are able to explore never before discovered concepts, the uncharted land. They show you wonder but they fail a lot. Half the time the thing doesn’t work properly. You wouldn’t trust what they build. They create ‘crazy’ ideas. Their type of innovation is what we call core research. They make future success possible. Most of the time we look at them and go “what?”, “I don’t understand?” and “is that magic?”. In the past, we often burnt them at the stake. They built the first ever electric source (the Parthian Battery, 400AD) and the first ever digital computer (Z3, 1943).
Settlers are brilliant people. They can turn the half baked thing into something useful for a larger audience. They build trust. They build understanding. They learn and refine the concept. They make the possible future actually happen. They turn the prototype into a product, make it manufacturable, listen to customers and turn it profitable. Their innovation is what we tend to think of as applied research and differentiation. They built the first ever computer products (e.g. IBM 650 and onwards), the first generators (Hippolyte Pixii, Siemens Generators).
Town Planners are brilliant people. They are able to take something and industrialise it taking advantage of economies of scale. They build the platforms of the future and this requires immense skill. You trust what they build. They find ways to make things faster, better, smaller, more efficient, more economic and good enough. They build the services that pioneers build upon. Their type of innovation is industrial research. They take something that exists and turn it into a commodity or a utility (e.g. with Electricity, then Edison, Tesla and Westinghouse). They are the industrial giants we depend upon.
However, it’s not enough to just organise by cells and populate them with people with the right sort of attitude. There is one further step you need to take.
You need to mimic evolution within the system and this can be done by introducing a system of theft. The Settlers steal from the Pioneers forcing them to explore new lands. The Town Planners steal from the Settlers forcing them to move forward. Pioneers build on the components and the services that the Town Planners and Settlers provide. This system of theft completes a virtuous circle — see figure 7.
Figure 7 — A system of theft
You need to be careful however as each group is important. You need to avoid the war of having just Pioneers and Town Planners (the two party state) with no-one managing the transition (the missing Settler problem). You need to avoid the ego that occurs when you allow one group to throw the project over the wall to another when it is bored. Hence the Settlers steal from the Pioneers, not the Pioneers throw crumbs to the Settlers. Stealing is also essential for forcing groups to let go. The Settlers will want to hold onto their successful product portfolio, they will have inertia to change caused by past success and so the Town Planners must steal from them. Finally each cell not only builds but operates what it builds. It uses components from others but it is responsible for its area.
By combining cell based structure with attitude (Pioneer, Settler and Town Planner) and a system of theft then you can create an organisation which can grow, explore new territories and continuously adapt to an evolving environment. No more bolt ons, no more constant re-organisation and no more tales of having a single company culture.
I owe a great deal of thanks to Robert X. Cringely and his 1993 book “Accidental Empires” from which Pioneer, Settler and Town Planner is derived. I also owe a huge debt of thanks to James A. Duncan, who is not only the co-author of these concepts but implemented the first example of this structure whilst he was the CIO in the company that I ran.
However, most of this was state of the art a decade ago. What’s state of the art today? That’ll be a jealously guarded secret but it will have evolved.
If you are interested in creating such structures then there are certain steps you need to take. You can’t just plonk the structure on an existing organisation. These steps include :-
The x-axis of the map is a flattened evolution curve (see figure 8). The curve dates back to 2007. Originally with the maps it was just a pattern noticed beforehand and it took quite some time to collect the data to confirm the curve. Back between 2008 and 2010 I used to use the curves a lot (marking on with pioneers etc) at conferences but these days I prefer to use the mapping form.
Figure 8 — PST stages on the evolution curve.
I would strongly recommend you read
Chapter 1 — On being lost
Chapter 2 — Finding a path
Chapter 3 — Exploring the map
Chapter 4 — Doctrine
Chapter 5 — The play and a decision to act
Chapter 6 — Getting started yourself
Chapter 7 — Finding a new purpose
Chapter 8 — Keeping the wolves at bay
Chapter 9 — Charting the future
Chapter 10 — I wasn’t expecting that!
Chapter 11 — A smorgasbord of the slightly useful
Chapter 12 — The Scenario
Chapter 13 — Something wicked this way comes
Chapter 14 — To thine own self be true