The inverse Conway maneuver

The inverse Conway manoeuvre uses this observation to suggest organizational structures.

“Technology change is driving changing customer preferences and behavior, which in turn are driving organizational change across increasingly software-driven enterprises. The causality question behind Conway’s Law, therefore, is less about how changing software organizations can lead to better software, but rather how companies can best leverage changing technology in order to transform their organizations,”

Bloomberg.

“organizations which radically change their system design should expect changes in communication structure”

Roy van Rijn

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Fit for Purpose ensures that the organization is set up in such a way that it can adequately implement the strategy in the current environment. It is a litmus test for the organization’s design.

Structures, processes, workflows raises the question of hierarchies and networks that dominate the organization, including the relationship between hierarchy and network.

Flow-oriented organizational design makes specific suggestions for an adaptive organization: a buy-oriented organization before a build-oriented organization, and specific suggestions for design.

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A hierarchy ensures that the organization is coherent and pursues a common goal.

The flow of information in a hierarchy is typically slow.

The structuring of an organization as a hierarchy or as a network is often treated as a contradiction. In fact, both networks and hierarchies are necessary. The trick is to find the balance between the two.

A network is fast in communication, can adapt and reconfigure itself.

It is not easy for a network to maintain a coherent direction.

Kotter on hierarchy and network

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The reason for the emphasis on the organizational structure is that it is focused on utilizing resources effectively.

The process organization focuses on a fast flow of information and products. It “stumbles” at departmental and divisional boundaries and thus slows down.

To the extent that speed becomes more important than stability, the process organization also becomes more important.

For the vast majority of today’s organizations, it can be summarized as: process over structure; this has far-reaching effects on decision-making structures and power distribution.

Tools

• Reinertsen’s heuristics for flow

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Empirical management means drawing conclusions from the past about the future, i.e. systematically evaluating and using the available information.

Empirical management requires the management of knowledge, systems and artifacts and the active participation of employees as knowledge carriers in order to collect verifiable information. It also means following a process such as Lean or Scrum that systematically and continuously integrates these insights.

This improves the quality of decision-making by utilizing practical experience and treating people with respect.

Keep your options open

There is another compelling reason for managers to grasp the insights behind real options. While option-pricing models are indeed a superior valuation tool—the usual use of the theory—we believe that real options can also provide a systematic framework serving as a strategic tool and that the real power of real options lies in this strategic application. This article seeks to provide such a framework.

The real power of real options. Mc Kinsey & Company, June 2000[1]

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The Last Responsible Moment

It is usually a good idea to never leave a decision to the last responsible moment. Keeping your options open until the LRM – when the cost of not deciding is higher than the cost of deciding – increases your flexibility and the empirical basis, i.e. the quality of the decision.

A decision-making process for maximum options

• For each decision, the available options must be determined.
• Determine the latest point in time at which a decision can be made, i.e. the conditions that must be met in order to enter into a commitment. Decision time = deadline – option implementation time. The first decision is made before the first option expires.
• Until this deadline expires, the search for new options continues and existing options are refined or expanded
• Identify options for each contingency and know in advance which option to exercise under a given condition.
• Try to delay the decision point. Often this is free or has a very low cost. To do this, we must be able to implement the option as quickly as possible. During the slack period, work on how to speed up the process.
• Be aware that optimizing costs does not equal optimizing returns or minimizing risk. Sometimes it pays to invest in more than one option, even if it costs a little more. After all, options have value.
• Wait to decide… and wait… and wait… until the conditions are right.
• When you need to commit and act, do so as quickly as possible. And you can move forward with confidence, knowing you’ve made the best decision possible.

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One of the most striking statements on motivation is Daniel Pink’s Youtube video about the three most important factors of motivation:

• Autonomy (independence)
• Mastery (control over a subject)
• Purpose (objective)

What makes a good working environment?

Translated to the company side, this results in some necessary conditions for employees to be motivated, committed and effective:

An environment of trust and respect

For trust and respect to develop, it needs

• a safe environment in which one can act without fear
• trustworthy and authentic leaders who guarantee a large part of this safe environment

decentralized decisions

An environment in which autonomy and responsibility can arise requires decentralized decision-making authority.

Leveraging diversity

Diversity helps to adapt to new developments. A diversity of perspectives leads to the ability to deliver better solutions and more flexible work in diverse working groups.

What else

This is a selection of factors that we consider to be central to an organization. Other factors, some of which are almost synonyms for the ones above, are

• meritocracy – the fair recognition of performance
• openness – it’s hard to imagine trust without openness
• community – working and setting goals together
• ownership – having authority over one’s own area
• a culture of discipline – the requirement to also justify the trust placed in you

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The strategy must be appropriate so that it formulates achievable goals, it must be adaptive so that it can adjust to new environmental conditions and it must be developed collaboratively so that it can benefit from the experience of employees and involve them quickly and appropriately.

Organizational excellence determines operational results and the implementation of the strategy, i.e. efficiency and therefore important aspects of competitiveness.

Organizational resilience determines the extent to which the organization is able to process internal and external signals for change and translate them into appropriate development measures.

Organizational coherence is the degree of a collective view of the strategic direction and the short and long-term threats to the company. This leads to timely, concerted action and thus to a high degree of knowledge sharing and knowledge creation throughout the organization.

Implementing the strategy requires an adapted organization: fit for purpose.

We have covered the development of a strategy in From identity to strategy, here we focus on the management measures for implementation.

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