The future of organizing?

What are the barriers to transforming beyond our current business paradigm? Do our organizations have to be apart from nature or can they be a part of nature? Can nature inspire how we re- organize?

Questions, questions…Patrick Andrews in a guest blog post for The Nature of Business provides some ideas and insights….I hope you enjoy them and find this post useful – now over to Patrick:

Inspired by some of Giles’ writings, I have been thinking about what we can learn from nature about the way we organize ourselves.

My first thought took me off at a tangent. I realized that the very question implies that we are somehow separate from nature. This is what our thinking has told us. Yet we really ought to know better by now. After all Charles Darwin showed long ago that we have emerged from the same evolutionary processes as spiders, orchids and the Alps. This implies that our creations are also products of the same evolutionary processes. So an Aston Martin, a marshmallow and a Tesco Express are all part of nature.

We don’t think this way, in part at least, because our creations seem to stand out from other natural, non-human systems. Think of a chocolate wrapper in a hedgerow, a flag on the moon or plastic in the Antarctic. They are instantly identifiable – they don’t seem to belong and we recognize this instantly.

Similarly our organizations appear to be quite different to and separate from the non-human world. Compared to the way a rainforest, a coral reef or the human body function, human organizations seem clumsy, simplistic and inefficient. Could it be that part of our evolutionary path, our purpose in life, is to consciously learn to do what nature has unconsciously learned to do over billions of years?

Let’s play the game and pretend we are separate from nature so that we can learn from her. How does she structure herself and how does this differ from what we do in our organizations and particularly in business? If we ask this question with an open mind, we start thinking rather heretical thoughts. For example, we note that in nature there is no equivalent of private ownership. There are simply clusters of organisms, constantly interacting, exchanging energy, nutrients and information, and a sort of shared consciousness holding it all together. Think about the human body for example. The head is not in charge, or in any sense the owner, but nor is the heart, liver or the bladder. They interact, performing different complementary functions.

What does it mean to own a group of people anyway? So let’s quietly drop any concept of “ownership” and instead think of different stakeholders with equal value but different interests interacting within a community of shared interest and shared purpose.

We might then go one step further and question the role of the Board in an organization. Again in natural systems there is no equivalent of the Board, or the CEO. There is no head tree in a forest, no chief executive fish in a coral reef. Try going into a forest and asking “Who’s in charge, please?”

Why have a Board at all? The answer in theory is that the Board “runs” the company, just like David Cameron “runs” the country. But we all know this is not true. David Cameron can’t even control his MPs – how could he be in charge of a whole country? So it is with a Board in a company.

Perhaps the real reason we have a Board (or a Prime Minster) is a desire to control, and a matching need to have someone to blame if things go wrong. The absentee owners need to feel someone is looking after their interests while they are away.

But we know control is an illusion, and we have dispensed with owners, so let’s dispense with the Board too (see, I told you we start getting heretical). We can separate out the multiple functions normally performed by a Board and allocate them to different bodies. We might have a strategy body, a dispute resolution body, a body responsible for information flow, another to spot efficiencies and synergies, yet another one responsible for accountability. And we would have a trustee body, responsible for governance and long-term policy.

This is certainly radical but it is not impossible. It is not even particularly new. There are pioneers who have experimented with some of these ideas in the past: Dee Hock at VISA, Ricardo Semler at Semco, José María Arizmendiarrieta at Mondragon and W Gore come to mind. Mutuals and employee owned businesses also have played at the edges of such radicalism. We even have science to help – cybernetics, the science of regulation, has produced the “viable systems model” that explains how to manage an organization without a Board. Could this be the age when such approaches go viral?

What’s new and exciting is that the tools we have at our disposal in the 21^st Century mean that we can go a lot further than these pioneers. It is not possible to separate out organizing from communicating, and there is no doubt that our new means of communicating peer-to-peer (think Twitter or Facebook) rather than top down (the BBC, the Times) are transforming the way we organize ourselves. Could we go beyond Wikipedia, Flickr and Linux and end up with network-cluster organizations in food distribution, aircraft manufacture and chemical production?  Who knows?

I like to dream about such possibilities, but it is useful to recognize that there are some major hurdles to overcome if we are to realize this vision.

The first is inertia. Things are simply not bad enough yet, the social, economic and ecological crises are not yet visible enough, for society to seriously consider such radical changes. Despite the banking outrages, the persistent corporate scandals (Wal-Mart, pharmaceutical companies, the media have all been implicated in the last year in major scandals) and the worsening financial inequality encouraged by the corporate system, never mind the serial failure of governments and business leaders to seriously address the challenges of climate change, the mass of the population are still happy to cede power to the political/corporate complex in return for consumer goods, cheap food and mass entertainment. It seems things need to get significantly worse before real change will come.

Secondly, there are technical challenges to be resolved before these new ways of organizing can be embraced on a wide scale. How do you hold those in authority to account when you have abolished the hierarchy of owners, Board and staff? Although accountability within large hierarchical organizations can be pretty poor, by removing owners you may simply end up with a complete absence of accountability, which serves no one. We also need to work out how to protect the interests of investors. They have a unique situation in business since they make an upfront commitment and then seek returns over an extended period. By contrast other stakeholders (staff, customers and so on) enter into mutual exchange with the business that is easier to define upfront. Although they are committed, it is different from the way investors are committed.

Thirdly, how to integrate all these diverse, unique and sometimes conflicting interests into a coherent whole? Although elevating shareholders interests above all other priorities has proved over time to be dangerous and harmful to the health of our planet, it has the advantage of simplicity. Having to balance the interests of staff, the environment, investors and society is far more complex and can’t be done by the usual approach of discussion, compromise and negotiation. A dialogic approach, emphasizing listening and suspension of the need to control or dominate, is the only plausible way. But we lack practice in this; massive retraining will be required. It would help if we got a few more women within senior positions in our organizations – such skills come more naturally to them.

Ultimately, the main obstacle to overcome is the old mindset. Our corporations have been built on the assumption that someone must always be in control, and huge amounts of energy goes into maintaining that illusion. If we can drop that, most of our work is done. Yet changing mindset is perhaps the hardest thing to do. This is where natural systems come in, constantly and subtly reminding us that control is not necessary or useful (in fact it often gets in the way of adapting and growing effectively in volatile business environments).

As I made clear, I regard humans as fundamentally part of nature. Thus I am confident that, sooner or later, we will evolve and learn to adopt more simple, elegant and healthy ways of organizing that serve us and our Mother Earth better.

But I can’t help feeling it will be a bumpy road. Nature, after all, is not averse to throwing in a bit of creative destruction when it’s time to make major shifts. Maybe that’s what we are heading into now. In any event it promises to be an interesting ride.

Can nature provide us the future model of organizing?  In short yes, but finding the way of implementing the answer is for each of us to enjoy – transformation (inside and out).