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Formal reporting lines are often the most sclerotic, rusty and ''resented'' interaction channels in the organisation. Communications up and down them — usually reluctant, strained, for the sake of it, to fulfil formal, not substantive, requirements for order — are at best ''reactive'' to commercial imperatives, and derivative of them: the firm’s real business is done only when its gears are engaged, and that means its personnel communicate with those who are ''not'' in their immediate hierarchy. The business unit is a cog: what matters is what happens when it is engaged. | Formal reporting lines are often the most sclerotic, rusty and ''resented'' interaction channels in the organisation. Communications up and down them — usually reluctant, strained, for the sake of it, to fulfil formal, not substantive, requirements for order — are at best ''reactive'' to commercial imperatives, and derivative of them: the firm’s real business is done only when its gears are engaged, and that means its personnel communicate with those who are ''not'' in their immediate hierarchy. The business unit is a cog: what matters is what happens when it is engaged. | ||
But as the complicatedness of our organisations has grown we have developed more and more internal “engines” which engage not with the outside world, but with each other, generating their own heat, noise and movement — frictions and vibrations which wear out the parts and fatigue the machinery — and which are lost as entropic energy. Of course, one needs legal, compliance and internal audit, but when those departments have their own operational infrastructure and, are themselves monitored and audited, the drift from optimal efficiency is pretty plain. Internal audit departments now periodically audit themselves. But who audits ''that'' function? [[Turtles]] | But as the complicatedness of our organisations has grown we have developed more and more internal “engines” which engage not with the outside world, but with each other, generating their own heat, noise and movement — frictions and vibrations which wear out the parts and fatigue the machinery — and which are lost as entropic energy. Of course, one needs legal, compliance and internal audit, but when those departments have their own operational infrastructure and, are themselves monitored and audited, the drift from optimal efficiency is pretty plain. Internal audit departments now periodically audit themselves. But who audits ''that'' function? [[Elephants and turtles|Turtles]] ahoy: we approach an infinite regression. | ||
You can understand the wish to focus on reporting lines — formal organisational structure — because it can be easily ''seen''. It is is [[legible]]. It is measurable. Auditable. It is tempting | You can understand the wish to focus on reporting lines — [[formal]] organisational structure — because it can be easily ''seen''. It is is [[legible]]. It is measurable. [[Audit|Auditable]]. It is tempting, especially for people at the top of the structure, to attribute business success to the formal structure they preside over. | ||
But it misses the organisation’s real arterial network: ''lateral'' interactions that ''cross'' the organisation’s internal and external boundaries: these are the communications that employees ''must'' make, whether or not they are recorded — communications between internal specialists in different departments and with the firm’s clients and external suppliers — to make commerce happen and move the organisation along. | But it misses the organisation’s ''real'' arterial network: ''lateral'' interactions that ''cross'' the organisation’s internal and external boundaries: these are the communications that employees ''must'' make, whether or not they are recorded — communications between internal specialists in different departments and with the firm’s clients and external suppliers — to make commerce happen and move the organisation along. It is ''in'' these interactions that things happen: it is here that tensions manifest themselves, problems emerge and opportunities arise, and here that these things are resolved. These are not [[Drills and holes|the drill, but the hole in the wall]]. | ||
These are ''[[informal]]'' interactions. They are not well documented, | These are ''[[informal]]'' interactions. They are not well-documented, nor from above, well-understood. They are hard to see. They are il[[legible]]. Yet, everyone who has worked in a large organisation knows that there are a small number of key people, usually not occupying formally significant roles — they are too busy getting things done for that — who keep the whole place running. These “super-nodes” know histories, have networks, intuitively understand how the organisation really works, what you have to do and who you have to speak to to get things done. These are the [[ad hoc]] mechanics who keep the the superstructure on the road. | ||
Likely management | Likely management won’t have the first clue who these “super-nodes” are, precisely because they do not derive their significance from their ''formal'' characteristics, but from their ''in''formal ''function''. | ||
They are the informal hubs of a multiple hub-and-spoke network. They earn their authority not from their formal position, nor their formal grading, but their informal reputation, earned daily, interaction by interaction. | They are the informal hubs of a multiple hub-and-spoke network. They earn their authority not from their formal position, nor their formal grading, but their informal reputation, earned daily, interaction by interaction. | ||
A map of interactions is not a top-down, God’s-eye view. It disregards the artificial cascade of formal authority | A map of interactions is not a top-down, God’s-eye view. It disregards the artificial cascade of formal authority in favour of informal credibility. It reveals the organisation as a point-to-point multi-nodal network, is a far richer organisation than that revealed by the org chart. This is how the firm actually works, and and inevitably the formal organisation will frustrate it. | ||
Yet no firm | Yet no firm we know of even ''considers'' it. Yet, with data analytics, it would not even be hard to do: Log the firm’s communication records for data to see where those communications go: what is the informal structure of the firm? Who are the nodes? | ||
Typically, ''vertical'', staff-to-manager communications don’t have those qualities. Reporting lines are more an interaction ''constraint'' rather than an indicator of productivity. They ''impede'' the firm from interacting freely. | Typically, ''vertical'', staff-to-manager communications don’t have those qualities. Reporting lines are more an interaction ''constraint'' rather than an indicator of productivity. They ''impede'' the firm from interacting freely. | ||
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The [[modernist]] theory is that the firm is a unitary machine that must be centrally managed and controlled from the top; therefore the more organisational structure the better. | The [[modernist]] theory is that the firm is a unitary machine that must be centrally managed and controlled from the top; therefore the more organisational structure the better. | ||
The “agilist” advocates removing layers, disestablishing | The “agilist” advocates removing layers, disestablishing [[silo]]s, and decluttering the organisational structure. | ||
The agile theory is that risks and opportunities both arise unexpectedly, come from places unanticipated by the formal management structure, and therefore the optimal organising principle is to allow talented people at the the coalface the maximum flexibility to react to those risks and opportunities. Thus, the imperative is to have the best people, with the best equipment, in the best place to react skilfully. Those people aren’t middle managers, the optimal equipment isn’t the one that leaves the best audit trail, and that place is not the board room, much less the [[steering committee]] or the [[operating committee]] | The agile theory is that risks and opportunities both arise unexpectedly, come from places unanticipated by the formal management structure, and therefore the optimal organising principle is to allow talented people at the the coalface the maximum flexibility to react to those risks and opportunities. Thus, the imperative is to have the best people, with the best equipment, in the best place to react skilfully. Those people aren’t [[middle manager|middle managers]], the optimal equipment isn’t the one that leaves the best audit trail, and that place is not the board room, much less the [[steering committee]] or the [[operating committee]]. | ||
For a [[modernist]], this is inevitably a scary prospect. The [[modernist]] view is that as long as the structure is correct the quality of the people in any of the positions on the organisational structure is immaterial as they have predefined roles to perform. | It is out there in the jungle. Management should seek the fewest number of formal impediments to the creative behaviour of those people. | ||
For a [[modernist]], this is inevitably a scary prospect. The [[modernist]] view is that as long as the structure is correct the quality of the people in any of the positions on the organisational structure is immaterial as they have predefined roles to perform: look after the pennies, and the pounds take care of themselves. | |||
So to understand a business one needs not understand its formal structure, but its ''informal'' structure: not the roles but the people who fill them: who are the key people whom others go to to help get things done; to break through logjams, to ensure the management is on side? These lines will not show up in any organisational structure. They are not what {{author|James C. Scott}} would describe as legible. They are hard to see: they are the beaten tracks through the jungle: the neural pathways that light up when the machine is thinking. They show up in email traffic, phone records, swipecode data. | So to understand a business one needs not understand its formal structure, but its ''informal'' structure: not the roles but the people who fill them: who are the key people whom others go to to help get things done; to break through logjams, to ensure the management is on side? These lines will not show up in any organisational structure. They are not what {{author|James C. Scott}} would describe as legible. They are hard to see: they are the beaten tracks through the jungle: the neural pathways that light up when the machine is thinking. They show up in email traffic, phone records, swipecode data. | ||