Dave Snowden and friends - Organizational Design - Part 4

In previous discussions, several topics were covered including informal versus formal networks and their impact on organizational learning as critical sensor networks. The conversations also delved into organizational design interventions, noting their ease of addition rather than removal, and the importance of getting rid of temporary interventions to prevent complexity. Discussions also included the hope-despair cycle in organizational design models, the Spotify example of evolving culture and its risks, and traps in organizational design. Hierarchy's role was examined, as well as leadership concepts focusing on followers creating leaders, and the realization that increased adaptive capacity should be a design goal.

In today's session, the focus shifted to adaptive capacity, discussing its relevance inspired by climate change adaptability. Adaptive capacity in organizations involves continuous learning and capability development. The emphasis was on forming networks within organizations to leverage existing knowledge and adapt without needing external hires. The conversation also touched on the resilience versus robustness debate, and the problematic nature of adopting biological metaphors in organizational systems due to human complexity.

The discussion covered contrasting definitions of resilience and robustness, emphasizing the importance of both qualities and their interaction within organizations. Debates around the concept of anti-fragility were situated in the context of organizations balancing dense informal networks with formal hierarchy to maintain resilience. The potential dangers of overemphasizing one approach at the expense of the other were highlighted, demonstrating the need for multiple interacting organizational structures to ensure resilience and functionality during stress.

The dialogue turned towards organizational structure, exploring the idea of designing entities to be both resilient and robust. There was an analogy with children's bones growing stronger after fractures, and an argument that for systems to adapt, they must sometimes break and reassemble. The conversation continued into leadership and its role in adaptability, suggesting election-oriented tenures may enhance adaptive capacities by preventing the stagnation often caused by long-term leaders.

A discussion emerged on the concept of graceful extensibility and adaptive capacity within networks. This part included insights into how organizations might become over-optimized for current conditions and lose adaptability. The challenge of convincing organizations to invest in adaptive capacity when stability might lead to over-optimization was highlighted. The idea that awareness across the entire network of approaching boundaries could influence adaptive potential was also suggested.

The conversation continued to examine how crises alter energy costs and change systems. It was noted that systems, like organizations, need to be able to undergo significant phase shifts, sometimes requiring the ability to break and reconstruct so they can adapt effectively. An examination of current economic shifts was cited, implying a transformation in traditional retail models due to recent crises, revealing the importance of recognizing and adapting to new societal patterns.

The importance of maintaining a balance between business efficiency and learning was discussed. Emphasis was placed on ensuring organizations do not become overly optimized, thus squandering opportunity for adaptive capacity. The debate touched on how often organizations are too lean, impacting their agility and ability to learn and adapt in different contexts. Attention was drawn to instances where over-focus on immediate efficiency detracts from building long-term resilient capabilities.

Discussions highlighted issues in organizational structuring, particularly how outsourcing and professional management affect adaptive capacity. The error in outsourcing mission-critical work was pointed out, suggesting a need for more dynamic structures. The conversations mentioned Toyota's model of long-term employment fostering adaptability, signaling a need for strategic retention of certain human resources to uphold organizational knowledge and capability.