by Aaron Dignan
One to Many Roles. Here’s a fun fact: there’s no such thing as a CEO. Sure, many people run around with that title, but it’s not really one role; it’s many. The CEO is actually one part recruiter, one part spokesperson, one part board whisperer, one part fund-raiser, one part mentor, and so on. Last time I broke it down I counted something like fifteen distinct roles. The same can be said of almost any position. Job titles mask the complexity of the roles we hold, and they limit our ability to shape them and step in and out of them freely. Instead, think of the organization as a rich network of roles that can be filled and shaped by anyone. Don’t limit yourself (or anyone else) to one static job description. Recognize that you already hold many roles in many places. Claim them.
Structure in Action
SLAM Teams. One popular way to bust up the functional matrix is by creating a series of mission-based teams. I like to refer to them as SLAM teams. S-L-A-M stands for self-managed, lean, audacious, and multidisciplinary. In practice, this means the team is pursuing an audacious goal for the organization with the authority to make decisions and do the work unencumbered. No reviews. No outside leaders disrupting the work. The team is self-managed. In addition, SLAM teams are lean—small enough to move quickly. But they are also multidisciplinary, containing all (or most) of the skills they need to achieve their mission. Introducing a few teams like this is a step toward the responsive structure in place at Haier and other Evolutionary Organizations and never ceases to result in shorter cycle times, higher engagement, and better outcomes.
Dynamic Teaming. Find a part of your business where teams change regularly and turn it into a dynamic two-way marketplace. The rules are simple: Teams have the authority to add or remove members using the consent process. Members have the ability to join or leave teams with reasonable notice. And members can manage their own bandwidth (i.e., hold more than one role). Open roles are shared transparently and members can “apply” by meeting with other members of the team, discussing the work, and sharing what they have to offer. No formal process here, just a search for a two-way fit.
Structure in Change
Because structure is often a proxy for power, managers (particularly middle managers) may be hesitant to do anything that threatens their position. The questions they’re asking themselves are “If I’m not a VP, what am I?” and “If I distribute my power, what do I have left?” The breakthrough happens when they realize that they can trade control for participation. Rather than living in one place in the org chart, they can live in many, a mix of roles where their influence is direct rather than indirect. Positional power traded for reputation. By getting closer to the work they can find joy in it again.
Questions on Structure
The following questions can be applied to the organization as a whole or the teams within it. Use them to provoke a conversation about what is present and what is possible.
How would we describe our current structure?
How do products, services, geographies, functions, skills, and customer segments show up in our structure?
What is centralized? What is decentralized?
What about our structure is fixed? What is fluid?
What about our current structure is causing tension?
How would an ideal structure serve us? What benefits would we expect to see?
Within teams, how do we approach roles and accountabilities?
How does our structure learn or change over time?
What does it mean to be People Positive about structure? Recognize that people are capable of self-organizing if the conditions are correct. Create simple rules or agreements about how teams are formed and changed, then let people go where their skills and energy take them.
What does it mean to be Complexity Conscious about structure? Organize for adaptivity. Ensure that your structure is driven by the periphery—the teams that touch the market—rather than the teams at the center. Allow teams to reorganize continuously rather than in grand gestures every few years. Clarify and specify structure when helpful, but do so in pencil.
STRATEGY
How we plan and prioritize; the process of identifying critical factors or challenges and the means to overcome them.
Ev Williams thinks the internet is broken. Twitter, the site he cofounded, is a clubhouse for the cognoscenti but also teeming with trolls, misogyny, and mindless regurgitation. Facebook is awash in clickbait, memes, and falsehoods. And digital media has become a race to the bottom, where brainless and sensationalist content earns the lion’s share of attention. Williams’s answer to all this is Medium, a social publishing platform he founded to save us from ourselves. When it launched in 2012, he pulled no punches explaining why it mattered. “The current system causes increasing amounts of misinformation . . . and pressure to put out more content more cheaply—depth, originality, or quality be damned. It’s unsustainable and unsatisfying for producers and consumers alike. . . . We need a new model.”
Medium was certainly that. From the get-go, the platform subverted nearly every convention in online publishing. Rather than a bench of professional writers, anyone could publish. Instead of quantity, it focused on quality. No clickbait, just thoughtful content with titles such as “The Crossroads of Should and Must” and “Design’s Lost Generation.” Cluttered navigation and loud design were replaced with the cleanest and most elegant reading interface on the web. And in place of a single feed, algorithmic and editorial curation ensured that quality content would find readers who’d appreciate it. Pageviews were out. Total time reading was in. It was as if the Medium playbook were to blindly do the opposite of what everyone else did.
And what happened? People showed up. By the end of 2016, the site had sixty million monthly visitors spending 4.5 million hours reading content that spoke to them. But something was brewing behind the scenes. Less than a year later, Medium laid off close to a third of its staff. In a short manifesto about the move, Williams explained its rationale. “Upon further reflection, it’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people. In fact, it’s not designed to. The vast majority of articles, videos, and other ‘content’ we all consume on a daily basis is paid for—directly or indirectly—by corporations who are funding it in order to advance their goals. And it is measured, amplified, and rewarded based on its ability to do that. Period. As a result, we get . . . well, what we get. And it’s getting worse.” And with that, the strategy at Medium now includes one more counterintuitive stake in the ground: eliminating ads and moving to a subscription model for premium content. In response, one headline read “Ev Williams Has Lost His Goddamned Mind.” But that’s what they always say when they can’t see the long game. Medium’s new growth target is ten million subscribers by 2022. If it succeeds, it’ll control a content budget larger than all the magazines you can name combined. Of course, this strategy is starting to sound familiar, isn’t it? Could Medium be the Netflix of the written word? Can a company that “believes in feeding minds, not mindless feeds” actually succeed? We can hope.
Of course, strategy is usually about market domination, not erudition. It’s about where to play and how to win. But in an Evolutionary Organization it can be hard to tell the difference between doing something because it’s strategic and doing something because it’s the right thing to do. When Starbucks closed for racial bias training, was that strategic? What about when outdoor retailer REI decided to close on Black Fridays? Or when Patagonia ran a full-page ad that stated, “Don’t buy this jacket,” and introduced an initiative to repair, reuse, and recycle garments it had already sold? Without going inside their boardrooms, it’s hard to be sure. When purpose is paramount, anything that serves the purpose is strategic, even if it’s not overtly commercial. And yet sometimes the market rewards these actions anyway. Welcome to strategy in a complex postcapitalist economy.
Regardless of your values, strategy is about identifying that which is critical—the factors that will make the difference—and determining how to leverage what is at your disposal to maximize your chances of success. Like organizational purpose, strategy is multidimensional and fractal—it’s happening on many fronts at many levels. Which means coherence matters. Amazon Prime’s free shipping is a brilliant strategy for overcoming the primary friction in online shopping (shipping fees), but it is codependent on other strategies that prioritize market share, cart size, and logistical efficiency. A random collection of trade-offs that would be shrewd in isolation might be disastrous in combination. Which is why the dialogue around strategy is as important as the output. When we maximize cognitive diversity and create space for ideas to collide, we’re far more likely to make progressive and coherent choices that serve our purpose, whatever it might be.
Legacy Organizations fall down on strategy in two ways. They hesitate to make the kind of bold trade-offs that cultures such as Medium, Tesla, or Apple do every day. In their desire to be “the leader,” they try to appeal to everyone, do everything, be everywhere, and offend no one. But good strategy is about identifying critical (and often controversial) factors that are going to define the future of a category. Having a pipeline of ever-more-sophisticated BlackBerry mobile devices is great, but it doesn’t matter if the world is moving to touch screens. While we often think of this as the job of the CEO, these counterintuitive insights—unpopular by definition—are often hiding in the organization and waiting to be discovered. What’s more, many organizations forget how potent the connection between purpose and strategy really is. If you don’t have a compelling vision—a dent in the universe beyond shareholder value—your strategies will fall flat. Because how can we win if we don’t know what winning looks like?
Thought Starters
Wild Swings and Sure Things. His politics and cantankerous demeanor aside, Nassim Nicholas Taleb introduced an extremely valuable concept in his book The Black Swan called the barbell strategy. This financial strategy is named for how it distributes risk—to two extremes: invest 85–90 percent of your assets in extremely safe instruments, and place all of the remainder in highly speculative bets. The reasoning holds that the “sure things” will create a floor for performance, limiting your downside risk, while the “wild swings” will expose you to potentially life-changing gains. The same strategy can be applied in an organizational context. Your project portfolio is probably a bell curve, but it could be a barbell. Take the case of WeWork, the global coworking space. It maintains more than four hundred locations that reflect its core business—desks and offices for rent in a vibrant social setting. But the firm has made unusual bets too: coliving spaces called WeLive, a luxury gym called Rise, and a private school called WeGrow. If they fail the sky won’t fall, but if one of them pops, WeWork wins big.
Careful with OKRs. The OKR, which stands for objectives and key results, is a concept introduced to Google and several other prominent firms in Silicon Valley by venture capitalist John Doerr. The basic idea is that each person in the organization should identify their strategic objectives for the quarter and break those down into the more measurable key results that will indicate if they’ve been successful. It’s goal setting with a modern twist. OKRs should be stretch goals, not easily accomplished (to prevent sandbagging), and transparent (to encourage collaboration and understanding). There are two things to watch out for here. The first is, again, Goodhart’s law. Once people set their OKRs, they’re going to do everything they can to hit them, including things that aren’t good for the business. As W. Edwards Deming observed, “People with targets and jobs dependent upon meeting them will probably meet the targets, even if they have to destroy the enterprise to do it.” The second is that many firms try to use OKRs as a form of top-down control, ensuring that each subordinate’s OKRs fit with the OKRs of their superior. While this feels like alignment, it all but eliminates any chance of divergence or serendipity. A healthy system is not going to cascade in a perfect hierarchy of intent. We want outliers. We want wild swings. Not a lot, but enough. And it’s easy to forget to make space for them in a system like this.
Learn Faster. In a truly dynamic marketplace, all winning strategies will have one thing in common: the desire to be faster. Or more specifically, to learn faster. In the 1950s, aviator and military strategist John Boyd created the OODA loop—observe, orient, decide, act—to explain how expert fighter pilots continually processed information in the heat of battle. In talking about the OODA loop, Harry Hillaker (chief designer of the F-16) said, “Time is the dominant parameter. The pilot who goes through the OODA cycle in the shortest time prevails because his opponent is caught responding to situations that have already changed.” Back in the present, technological monopolies are putting this into practice, to lethal effect. Amazon now averages more than one software deployment every second. And on Reid Hoffman’s Masters of Scale podcast, Mark Zuckerberg shared how Facebook gets smarter every day. “At any given point in time, there isn’t just one version of Facebook running, there are probably 10,000. Any engineer at the company can basically decide that they want to test something. There are some rules on sensitive things, but [. . .] they can launch a version of Facebook not to the whole community, but maybe to 10,000 people or 50,000 people—whatever is necessary to get a good test of an experience.” Do you have a thousand versions of your business running? The future belongs to learners.
Strategy in Action
Even Over Statements. The problem with priorities is that we have too many. The word “priority” didn’t even have a plural form until the 1900s; before that it meant “the very first thing.” Unfortunately, when you prioritize everything, you prioritize nothing. Just because you want absolute low cost and absolute quality doesn’t mean you can have both in equal measure. When push comes to shove, something’s gotta give. The “Agile Manifesto” used “over” statements such as “responding to change over following a plan” to make trade-offs explicit in service of better software. More recently I was introduced to “even over” statements by Tom Thomison, one of the cofounders of HolacracyOne. The even over statement, which is a form of strategy, does a great job of indicating that even though we value the thing on the right, we value the thing on the left more. Amazon, for example, might use the statement “market share even over margin” to clarify that although profitability is important, at this moment the company would rather invest cash flow in further cementing its dominance in the market. Good strategy statements work in both directions—one good thing over another good thing. My former colleague Jordan Husney illustrated this nicely with a set of competing statements about his burgeoning software business. One of the two versions below is real, but the important thing is that they’re both plausible. That’s how he can be sure the trade-offs are real.
Small organizations even over global enterprises
User growth even over revenue conversion
Initial sign-up retention even over existing user retention
Desktop experience even over mobile experience
Or:
Global enterprises even over small organizations
Revenue conversion even over user growth
Existing user retention even over initial sign-up retention
Mobile experience even over desktop experience
Every ninety days or so, gather your team and try to generate a few strategy statements of your own (or review and update the ones you have). Think about what you need to prioritize in order to succeed. What important trade-offs don’t come naturally? What has been implicit that you can make explicit? Ideally, this happens at every level: the organization, the team, and even the individual. And remember, bad strategy statements contain trade-offs that don’t hurt, or ignore them altogether. Good ones make tough choices. Great ones? They make trade-offs that everyone else thinks are crazy, and in the end turn out to be right.
Scenario Planning. Your purpose is clear. Your essential intent is well defined and regularly tuned. Using these beacons, people are “voting with their feet” and energizing the projects that matter most. Your even over statements are shaping a thousand smaller decisions. It’s fair to ask, Do we even need a plan? Yes, but not a plan that says what must happen, a plan that says what might happen. Scenario planning has the potential to open us up to possibilities that we might otherwise not consider. Done right, it’s an inexpensive way to wrestle with uncertainty. To get started, gather a group with as much diversity as you can fit in the room, and ask them to generate as many possible futures or micro scenarios as possible. Cluster them and discuss the factors involved. Discuss what could be done to mitigate or navigate these scenarios. Listen closely for anything that’s too quickly dismissed—the black swans that are overlooked until it’s too late. And remember, we’re not trying to anticipate the future; that’s not Complexity Conscious. We’re trying to create awareness. Readiness. Preparedness. So that when something unexpected happens—and it will—your team is less likely to be surprised. Your OODA loop is short. And you’re ready to act.
