Quarterly Journal on Management
From the publishers of THE HINDU BUSINESS LINE
Vol. 2 :: No. 1 :: March 1998
From Busyness to Business!
Something fundamental and positive has happened to our world. We have moved from the old organised model to today's unorganised one. In the orderly, stable organised world there was certainty and convention. In the global unorganised world there is freedom, diversity and instability. Whilst these changes have occurred in the wider world, managers and employees have not changed their attitude and behaviour sufficiently to adapt their traditional business organisations to the new circumstances. As a result, much of the activity that takes place in our organisations is mere busyness and not business. In other words, it is bureaucracy, administration and other non-value adding work.
Today's typical business organisations have formal membership and highly structured policies and procedures, with work carried out in specified locations such as offices. These organised business organisations suffer from some fundamental flaws that cause the high levels of bureaucracy and busyness. The fundamental flaws are:
Bounded rationality is the problem of limited understanding and control of an increasingly dynamic and global unorganised world. Managers cannot locate and organise responses to opportunities and threats around the globe. Managers must respond by devolving decision-making responsibility, letting strategies emerge and making reversible commitments. If they do not, their inability to realise the organisation's full potential will cause discontent amongst employees, customers and shareholders.
Accurate incentives within free markets stimulate the optimal completion of valuable business outcomes, paramount amongst which is excellent customer service. However, bounded rationality causes a lack of accurate and adequate incentives within traditional static companies. These faulty incentives mean that achieving world class performance is reliant upon the existence of intrinsic employee motivations such as pride and satisfaction felt at delighting a customer. Faulty incentives also necessitate the very existence of managers and managerial procedures. If everyone in the company was doing what they wanted to, there would be no need for other people higher in rank to supervise and ensure adequate completion of the tasks.
Dependence within organised organisations means that to perform excellently, individuals have to rely upon their colleagues supporting them. Organised groupings such as teams splinter and divide because different members think and believe different things about the decisions going on within that group. Effort is either expended on busy negotiations and compromise to keep the group together- or the static group disintegrates. Either way, the organised groupings do not provide an optimal platform for internal employee collaboration or external customer responsiveness.
The existence of coercion and force within organised business organisations means that people are forced to do things. They have no choice but to carry out the tasks given to them by their managers, which they are often not interested in or suited to or which do not challenge their full abilities. This means that employee potential is not maximised and external customer results are suboptimal.
To overcome these fundamental flaws, and ensure that the company's actual growth is close to its sustainable potential, managers should implement unorganisation techniques such as downstructuring, opporTUNEitizing and collapsible corporation. This then aligns their companies more closely to the unorganised operating environment and thereby increases the amount of business and reduces the amount of busyness carried out in organisational contexts.
Downstructuring (removing structure) is not about reducing the number of employees (downsizing) or changing structure (restructuring).
Downstructuring is removing the "hard" side of the organisation: its policies, procedures, strategies, systems and structures such as job titles and paper-based administration. Downstructuring is the technique of choice for transforming those areas of organisations involved in ideas creation and knowledge working. Because ideas creation is not related to time or place, downstructuring is a useful tool that facilitates location independent working. Currently in India, many workers travel to their company's offices to work because they do not have the necessary resources at home. But as mobile and fixed telecommunications services and Internet provision are deregulated, such services will fall in price and become widely available to more people.
One company in India that has introduced flexible working environment for its employees is Siemens Communication Software in Bangalore. Here, flexi-time is the norm and employees set their own work schedule and determine for themselves how to best meet their deadlines. 13 to 15 employees typically report to each manager compared with two or three in more traditionally structured Indian companies. "It's initially hard for them to accept so much freedom," remarks Hans Krafka, managing director of Siemens Communication Software, about the company's programmers. "On one hand they like it, but on the other side they are reluctant to take up the responsibility. I still find a number of engineers having difficulty walking freely into my office. Some even walk backwards out my door."
Whereas downstructuring is the practice of eliminating structure, opporTUNEitizing is the practice of making structures in the organisation dynamic. opporTUNEitizing is best suited to freeing employees engaged in physical activities such as farming, distribution, manufacturing and assembly. Within such industries, employees should be able to take responsibility for important personal and company objectives such as product quality, customer service, reliable production, continuous improvement and learning. opporTUNEitizing reduces structure sufficiently to allow employees to meet these valuable end objectives by minimising the means (static systems, procedures and structures) that hinder their achievement. Too many procedures were set up merely with the intention of arbitrary control of "subordinates".
Under opporTUNEitizing, those structures that are static and an end in themselves (a means for managerial control) are removed. On the other hand, those structures that are dynamic and flexible and a means to an end (employee learning, product quality) are kept. The remaining positive procedures are opporTUNEitized, such that they are followed during routine activity, but can be transcended by employees when circumstances deviate from the norm such as meeting non-routine customer services requests. Downstructured companies and new start-ups will come to resemble "collapsible corporations" in which clusters of people from inside and outside of the organisation's traditional boundaries form voluntarily, dynamically and impermanently in order to meet customer requirements.
The people who participate in collapsible corporations will have transformed themselves from dependent "rankers"; interchangeable units of economic production, to independent "branders": people who think of themselves as brands, with a strong inner core of knowledge and outer core of image and networking. Collapsible corporations are shaped around electronic signals rather than physical geographical office buildings.
Business success for collapsible corporations is all about combining the complementary capabilities of business partners for mutual gain. Once a novel idea or content has been generated, it can be implemented by outsourcing the actual production and distribution. Enabling technologies such as the Internet facilitate this partnering and licensing. Such low-entry barrier media provide entrepreneurs with a mechanism to create wealth. Srinath Srinivasa, a researcher at the Indian Institute of Technology in Madras sees "some parallels between unorganisation and the "core competence" philosophy advocated C K Prahlalad. Like unorganisation, core competence advocates specialisation and outsourcing of all activities that are not directly related to the core competence." As such, managers should not persist with traditional business organisations in today's unorganised world. By avoiding the fundamental flaws, they can minimise busyness and maximise business!
Simon Buckingham is the creator of the "unorganisation" business and political philosophy described on the Internet at http://www.unorg.com