Back to Basics: Organizations are as Unique as Individuals

In 1928 the Belgian artist René Magritte painted a picture of a pipe (the kind you fill with tobacco). The painting, called “The Treachery of Images,” now resides in the Los Angeles County Art Museum. Under the image of the pipe are the words “Ceci n’est pas une pipe,” French for “This is not a pipe.” In other words, although the painting is very realistic, it is not the real thing; it’s just a representation.

In similar fashion, this is not an organization:

org chartActually it’s not even an image of an organization; it depicts only two components of organizational reality: the division of work into specialty areas, and a hierarchy or power structure.

Of course, actual organizations are far, far more complex than the charts we typically rely on to depict power and authority relationships. In fact, those images tell us almost nothing about how an organization actually operates; they provide no information whatsoever about the processes, procedures, operating principles, or values and culture that are part of every organization and guide the way its members create products or services.

What makes all this difficult to grasp and to describe is that every organization is unique – as unique as every individual. And just as there is no “correct” human being, there is no correct, or perfect, organization. However, there are organizational practices and cultures that are more or less suited to their environments – that are more less effective in a particular context.

In fact, I have been stressing the value of embracing the diversity of individuals in an organization (see, for example, “There is Only One of You,” and “Listen for Meaning“) –  but the value of organizational diversity actually depends on the context. For some organizations diversity is the spark that generates needed creativity and innovation. For others, diversity can lead to conflict and even paralysis (we need look no further than the U.S. Congress for an example of diverse perspectives and conflicting values that have almost completely gridlocked that organization).

One of the least understood aspects of organizational design is that there is no one “right” or ideal structure, no best culture, and no single correct set of best-practices policies and procedures. As my former colleagues at Harvard Business School, Paul Lawrence and Jay Lorsch, demonstrated many years ago, every organization wrestles to find the right balance between differentiation (individual differences, specialization, and diversity) on the one hand, and integration (relationships, coordination, collaboration, and operating standards) on the other.

Lawrence and Lorsch demonstrated clearly that there is no one “best” form of organization, no “correct” balance between differentiation and integration. In fact, as they studied successful organizations in several different industries, it became clear that in environments where innovation and agility were critical success factors (their prime example was the plastics industry, which when they studied it was undergoing rapid technological change), the organizations that were most profitable were highly differentiated and decentralized.

Success in those kinds of industries demanded rapid responses to new technologies, and decision-making procedures that empowered those on the front lines to make decisions quickly and move ahead without needing extensive approvals from “on high.”

In contrast, the most profitable organizations in the very stable glass bottle industry (the contrasting industry selected by Lawrence and Lorsch), where a cost saving of $.005 per bottle – half a penny – was enough to move the bottom line from red to black, were highly integrated, procedurally focused, and extremely hierarchical. Even “trivial” decisions were made at very senior levels in the organization, where the decision-makers took plenty of time to gather all the relevant information from every part of the organization; that is what being highly integrated and hierarchical means.

Why is this important? Because the “fit” between an organization’s practices and culture on the one hand, and the stability of its environment, on the other, is a primary determinant of organizational success.

And that fit directly affects the kinds of conversations that are appropriate in an organization. In an integrated, procedural, and hierarchical organization we would expect to find fewer two-way “vertical” conversations between bosses and subordinates.

However, in an organization that needs more on-the-spot problem-solving and innovation (like most of them in 2015), open, two-way, no-holds-barred conversations are not only more appropriate, but if leadership has any clue at all those two-way conversations will be actively encouraged.


Contact me for a free consultation about how you can orchestrate two-way corporate conversations that enhance organizational performance.


 

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