Mapping out Organizational Space

Posted: December 27, 2008 at 2:16 pm in cognition, management

I really liked Tim O’Reilly’s post today about how companies like Google and WalMart are incorporating IT into their organizational DNA. O’Reilly’s post describes how those example companies are mapping out a new way of organizing people built around integrating IT into how the organization functions:

Sensing, processing, and responding (based on pre-built models of what matters, “the database of expectations,” so to speak) is arguably the hallmark of living things. We’re now starting to build computers that work the same way. And we’re building enterprises around this new kind of sense-and-respond computing infrastructure. …It’s essential to recognize that each of these systems is a hybrid human-machine system, in which human actions are part of the computational loop.

I particularly like O’Reilly’s description of the organization as a group mind that incorporates both people and machines, as it fits in with my thoughts on organizational cognition. The organization also incorporates culture, processes and many other feedback loops that structure how the organization accomplishes its tasks.

Let’s start by taking a quick look at two existing organizational models:

  • Small teams – the pre-industrial-age organizational model. In a small team, no organizational structure is needed because everybody knows what everybody else does, and decisions can be made organically or by consensus. New team members are indoctrinated into the way things work by social pressures. Whether discussing hunter-gatherer bands or artisan guilds, it’s rare that organizations grew to more than 30 people without splitting into smaller groups. There’s a reason that even modern managers understand the power of small targeted teams. Communications limited the size to which a team could grow, as the number of communication pathways grows exponentially with the size of the team.
  • Hierarchy – the industrial-age organizational model. Information and decisions are funneled up to the appropriate decision-maker, and the resulting decision is distributed out to the employees who carry out those decisions. This was ideal in a world of limited communications, as each employee knew that information flowed up to their manager, and decisions flowed down from their manager, so they only had one primary communication link to maintain. Hierarchies also simplified assimilation of new people because the hierarchy defined each employee’s responsibilities, generally in an organizational handbook.

There have been various hybrid organizational models where there are hierarchies of teams and other configurations, but teams and hierarchies have been the basic building blocks for most organizations.

We are in a fascinating time where the number of possible organizational solutions has gotten much larger, as technology has removed the communication limitations that previously eliminated many potential configurations. We are just now figuring out what the new possibilities are, evaluating their strengths and weaknesses, so that we can find the appropriate option for a given venture. To put it in geekier terms, we are starting to map out the vastly expanded search space for organizational structures.

I think O’Reilly’s post identifies one direction, where organizations integrate computers so that certain decisions (like Google ranking web pages) don’t need to be handled by people and instead information deluges are handled by software. One of my interests is in trying to map out other possibilities, what they would look like and how they would fit various organizational purposes. My previous post about the future of organizations discussed how the new limitations may be social rather than technical, which implies that we need to start designing new social structures that can take advantage of the newly available technology.

One possibility that I’m playing with is that of overlapping teams with clearly defined roles. The good teams I’ve been on involved people who trusted and respected each others’ contributions to the team’s overall goals. I’d like to think that a fractal organization could be built off of such teams which each have a team goal, and then each team trusts the other teams to accomplish their goals in order to satisfy the organization goals. There would be a ton of communication necessary to distribute information within the organization to where it needs to go, but I think that is becoming more realistic by the day.

Another possibility is the free agent world, where there are no continuing organizations. Instead, coalitions of individuals are formed for specific projects, accomplish those project by bringing in other people as needed, and then disband to pursue other projects with different people. This would be the endpoint of the world where everybody becomes a consultant in their specialty.

I’m sure there are lots of other possibilities that I haven’t considered. For instance, I’m definitely interested in what we can learn from how World of Warcraft guilds are organized to accomplish their goals when every player is free to leave guilds that don’t work for them. Or how organizations mobilize volunteers to work for them – I’m sure there’s much to learn from Obama’s campaign this year. I’d love to hear of other ideas that people have on how to organize people.

P.S. I finally created the Google group/email list to discuss organizations that I mentioned in that future of organizations post, so go ahead and join up if you’re interested.

5 Responses to “Mapping out Organizational Space”

  1. Siderea Says:

    Dude? Reality check. You just defined the era of Feudalism as characteristically non-hierarchical.

  2. Eric Says:

    Yeah, I knew that sentence was going to get me into trouble. The Catholic Church would also be a good example of hierarchy in those days. I was over-generalizing wildly about everything from hunter-gatherer bands (which typically did not exceed 150 people and, while socially hierarchical, were not formally so) to other smaller family farm units. But, yes, it’s a stretch.

  3. Turil Says:

    Have you heard about Holacracy? It’s somewhat similar to your fractal organization idea, with small teams making up a much larger “team” (really, the whole organization), with the smaller teams working mostly independently on their smaller goal that fits into the larger goal of the organization itself.

    Personally, I believe a combination of team-based hierarchy (such as fractal organization/holocracy) AND a free agent structure is the best way to create a wholistic organization. Both horizontal AND vertical structure have to be in place for real stability and growth.

    Of course, making that kind of three dimensional organization happen is going to take a lot of teamwork!

  4. Eric Nehrlich, Unrepentant Generalist || Principled Leadership || September || 2012 Says:

    […] like thinking about how to scale a company without making it feel like a big company. The standard way to scale a company is to use hierarchy and process to manage the larger scale – big decisions get passed up the […]

  5. Eric Nehrlich, Unrepentant Generalist || Startup vs. big company culture || November || 2011 Says:

    […] a company of more than 24,000 employees act like a startup“. And because of my interest in mapping out organizational space and understanding the different ways in which people can organize themselves, I’ve been […]

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