Organizational Metamorphosis: Becoming the Hub
By Hina Pendle, Ph.D.c, Us Partners, Organizational
Development and Transformation
William Ulrich, Tactical Strategy Group, Inc.
The most consistent complaint we get from people throughout organizations is, as one CEO put it; Communication! Communication! Communication! The frustrations show up in many ways. Trying to get things done in an organization involves a complex mix of interrelated tasks touched by the hands and minds of many different people. A key factor for success is good, clear, complete communication. When it doesn't work, tasks fall through the cracks, deadlines are missed and mistakes are made. If you hear; comments like "I thought Jack was doing it"; or "Joe is working on the specs for the Clean Room. Doesn't he know that Bill's task force is working on it?"; or "Sally wrote them up last week." - these are the sounds of miscommunication and a lack of coordination. And poor communication and coordination are costly and stressful to everyone – especially unhappy customers.
Communication, whether verbal, digital or written on post-its, is the thread that weaves an organization together. Like the pieces of a garment, sewing the threads of an organization together makes it whole and allows it to function effectively. Communication is fundamental to all of our interactions. It's the way we manage relationships. We must be coordinating, collaborating, co-operating, connecting and considering. Leaving aside the quality of communications for now, we would like to address a very important, yet often missed, component of successful communication in organizations - the underlying infrastructure. Infrastructure enables and facilitates effective and efficient communication.
Internet, intranet and email, are enabling technologies that help considerably, although they are confused with structure when they are merely tools. The way a skeleton provides a framework for a body, organizational communication needs an infrastructure. It's an arrangement that enables people to coordinate actions and information in a predictable, comprehensive way throughout the entire body of an organization. If an infrastructure is designed properly, it means that all the right people will get the right information they need, when they need it. And everyone will know who those people are, what they're working on and what they need to know and why.
If we look at the pyramid infrastructure of a traditional hierarchical organization, it is assumed that formal communication travels down from managers to subordinates and to a lesser degree up from subordinates to managers. This is the prevailing model. But it has some inherent flaws that compromise effective communication. For one, the levels of authority are implied in the structure. Those on top have more. As a result, managers don't include employees in all information exchanges and visa versa. This has a detrimental impact on communication because it inhibits the free flow of bilateral information.
At the risk of punishment, people will color the truth, particularly in delivering unwelcome news such as mistakes or loss of production time. This taints the integrity of information and the accuracy of knowledge, which in turn inhibits everyone's ability to coordinate actions and make good decisions. Informal communication tends to become covert, mostly taking the form of gossip. When things aren't working smoothly, it makes the organization a target for painful reorganizations, resulting in often times failed attempts to fix problems. Management and workers, along with individual lines of business such as administration, manufacturing, marketing and production control, feel isolated from each other.
In spite of this isolation, things are beginning to change. In the past 20-30 years, we have seen the influx of teams into traditional organizations. Teams require a different style and content in their communications. Their structure is horizontal and circular -more inclusive - because team members have to think and solve problems together. The pyramid style infrastructure is incapable of supporting effective cross communication within or among teams. The pyramid no longer reflects how organizations work in practice. Teams don't show up on the organization chart. This makes people bumble around in unclarity, not knowing who is working on which project. Workers cannot be efficient and effective at getting things done in this environment. While finance doesn't carry a separate line item for losses due to confusion and poor moral, it surely affects the bottom line.
What type of infrastructure could address the above challenges and be able to take us into an unknown future? What attributes would it have? How can we design an infrastructure that would work?
Such an infrastructure must be flexible and organic because needs are constantly changing. It would have to be comprehensive to include all the players and related organizational units. It must map functions so that people would be able to find each other easily and know what projects they are working on - wherever they are in the organization. It would maximize input and information flow, which in turn lends itself to more collaborative decision-making. People would be able to tap into enough organizational knowledge to support their individual tasks, capabilities, decision making and autonomy.
Very importantly, it would map and enable the interconnectedness of all the parts of an organization under a formal infrastructure that reflects the way things really work. Everyone could see the whole and all of its parts. The structure could suit organizations of virtually any size that are centralized, de-centralized or some hybrid of these two. It would facilitate the maturation and growth of the organization's operations. The structure would be designed to be open enough to support the chaos of creativity and spontaneity, yet be orderly enough to support coordinated and clear functioning. To use a term coined by Dee Hock, founder and CEO Emeritus of VISA International, it needs to be Chaordic®.
A metamorphosis from the pyramid structure to this new structure will result in an organization that contains many elements from the old, yet allow vastly greater possibilities to emerge as cells are rearranged. A caterpillar transforms into a butterfly, a creature that can fly yet contains the same basic cells. In an organization, this metamorphosis allows for the arrangement of cells or work groups to be more interconnected, thereby streamlining communication and coordination. The eventual shift to a Hub System for an organization involves two important elements. The first step involves building an understanding of and imparting the philosophical underpinnings for a Hub System within the organization. The second is the transformation from the old structure to the new structure. Transformation mobilizes teams, designs the structure and transforms the enterprise. Once these two steps have been completed, the collaborative energy, previously focused on working around the system, can be freed up and channeled into increased productivity.
The Hub System
The structural design supporting this metamorphosis uses The Hub System, so
called because a key element in designing the structure is the Hub. A Hub can be
defined as a core focus of coordination and communication. There is a central
Hub like the sun in our solar system. In an organizational map, a circle at the
center depicts a central Hub. The central Hub could be comprised of a Leadership
Council, senior representatives from other Hubs, a Director or some combination
of the above - depending on the needs of the organization. The central Hub has
the broadest interests of the organization as its charter and serves as a macro
coordination point.
Surrounding the Hub are satellites, also depicted by circles like planets or cells, each representing major functions across the enterprise. In an Internet company, the satellites could include; Research & Development, Marketing, Sales, Product Development, Engineering, Finance and Administration. If a satellite is large or diverse enough, it would become a Hub with its own satellites. Those satellites could, in turn, spawn other satellites to handle sub-functions or projects. For example R&D could create a separate satellite for each of its products or projects.
The Hub System as an infrastructure departs from conventional organizations because every satellite has representation within the Hub. For example, representatives of a dozen satellites may form one Hub that along with six other Hubs sends a representative to the central Hub. Representatives participate in any decision-making process requiring input and approval from other satellites and Hubs. To facilitate clarity in function, each Hub and satellite has a clear and distinct charter that defines its purpose, guiding principles, scope, mandate, and level of authority and roles. This foundational infrastructure divides the focus of each domain and draws visible lines of interface for coordinating and connecting everyone in the organization.
Satellites are free to be creative, self-organize within their own internal structure and make decisions to support their purpose, principles and mandate. When a satellite has completed its function or outlived its usefulness it can be dissolved without destabilizing the overall infrastructure. The need for a jolting reorganization becomes obsolete. With flexibility built into the system, changes can happen as a normal part of the process.
A sample Hub structure for a large-scale Information Technology (IT) organization is shown in the figure below. Each of eight major Hub categories can communicate directly with each other, their respective satellites or through the IT Council. The defined lines of authority for each Hub and related satellites (shown only out to one level) would be articulated in the IT Constitution. Centralized Hubs, including the IT Council and eight major IT categories shown in the figure below, are comprised of representatives from all immediate satellites along with permanent participants as required.
Sample HUB Structure for an IT Organization
To enable such an infrastructure, the organization as a whole or its representatives must create a constitution. This constitution is a contract among the Hubs and satellites that defines the purpose, principles and structure of the enterprise. It also reflects the collective guiding wisdom of the organization in terms of values, ethics and decision-making processes. The constitution provides a means of forming and dissolving satellites and Hubs, accepting or dismissing members, and altering the constitution.
A constitution is the first level of self-organizing, providing the Hub System structure with an original design that suits and supports the functions to be carried out. Parameters for tasks, levels of authority and responsibilities are agreed upon and put into individual Hub Charters, each of which become an addendum to the constitution. After that, as needs and functions change, get added or are dropped, the Hub System will self correct and self-organize. After conversation and agreement by the appropriate parties, the constitution may be amended.
In short, clear yet flexible agreements are needed to define how people can work together. This should optimally include an approach for keeping relationships current and relatively conflict free, along with ways of learning and improving collaboration skills. The details of this part of the process are very important and deserve particular focus when creating such an infrastructure.
It's important to note that each organization is unique and needs to design an infrastructure to support its own way of functioning. One consideration regarding Hub-based organizations is that a Hub revolves around people. This raises the central issue of how to address human resource issues within a Hub in a large enterprise. In other words, if Hubs self-organize, choose a leader, are represented at the next level Hub, and serve the good of the organization, how does a Hub deal with issues such as reprimands?
Reprimand is an interesting concept to reframe. Team or horizontal style structures tend to be self-correcting. Peer pressure calls for accountability. In a hierarchy it is assumed that only the manager can deal with a difficult person or situation, so people will put up with a lot more discord without jumping in. In the Hub structure, it is beneficial to have a process in the guidelines for bringing to the surface issues that are dissonant to the group or the work. In a Hub, peers address a problem – perhaps even it means voting a person out of a hub. That person may then be given one week to find a position within another Hub, or be out of work.
Another aspect requiring attention is decision-making. Decisions should be made as close to the issue as possible — based on scope and mandate, with appropriate collaboration with other related Hubs. Under this approach most issues will take care of themselves locally without the temptation to set up oversight. When other Hubs need to be involved, decisions can roll out to the next level and be coordinated with each other. A constitutional provision should be made to modify the decision-making process as needed.
The constitution should be more descriptive than proscriptive. Which means it should be more like a guide that describes the spirit and intention of the provision than a hard and fast rule. Rules tend to be broken or challenged. It builds in flexibility over time to consider how the spirit of an agreement can be maintained and shape our decisions according to the situation. The Hub System strives for harmony and balance in the evolution of the group.
Transformation to the New Structure
Transformation from the hierarchical pyramid to the Hub-based infrastructure
requires executive commitment, a focused effort, education and strong
leadership. Gaining commitment requires management to be feeling some pain due
to failures and frustrations in the existing infrastructure. Pain is often only
recognized when dysfunctionality hits the bottom line. A widely diversified
company, with numerous locations and functional entities, might experience more
communication and coordination problems than a small, monolithic entity.
Organizations with many partners or acquisitions have a huge challenge managing
all the different cultures. The Hub System would integrate all the parts into a
manageable alignment.
Another transformation challenge involves young companies. Start-ups or entrepreneurial companies grow organically. They experience too many rapid changes to effectively organize and manage systems in the conventional sense. Introducing a Hub System provides an infrastructure that acts as a backbone for such a company and at the same time accommodates the fluidity and the instantaneous coordination needed. Again, it’s the balancing of chaos and creative spontaneity with order and structure that helps an organization become effective. Optimizing unique cultures and keeping the players enthusiastic and on track are good collaboration techniques that will enable them to work together more successfully. This combination will build a solid foundation to support the company’s growth naturally, without the wrenching reorganization that happens all too often.
Regardless of the size or maturity of an enterprise, transformation to a Hub System still requires strong management commitment. Once this commitment is in place, management should create a focused team of senior executives, with representation from key areas of the organization that becomes a central design team. This team will create a high-level purpose and set of principles that will be distributed to various functional areas. Each area will, in turn, give feedback. And, within their mandate they will self-organize into Hubs and satellites - first from the inside out and then from the outside in. This is an interactive process requiring participation at every level.
The creation of a Hub-based infrastructure occurs in a series of centralized, distributed, and then again centralized, design sessions. The key here is for the central design team to not impose a design on the other Hubs and satellites. Design is inspired by actual practice, habits and experience and will continue to change as the future dictates.
A new kind of thinking must emanate from Hubs and satellites. Therefore, education goes hand-in-hand with the organizing effort. Because Hubs will make and be accountable for their decisions and outcomes, this may be particularly challenging for large corporate cultures. Decision-making was a practice that may have been discouraged by management. Managers will have to learn to share the power that was previously their reserve. And subordinates have to step up to participating in a more empowered way. Another key factor that helps the transition is to shift perspective from "I have to take care of ‘me’" to "I have take care of ‘us’".
Finally, leadership is essential and interchangeable at the core and at every level of a Hub-based infrastructure. Leaders will emerge organically, Hubs will work out their issues and politics and ego will take a back seat to functionality. The bottom line is that responsibility and authority now rests in the hands of those that are best suited to addressing organizational challenges—that can be everyone. And, this is one re-organization that recognizes and embraces the need to respond to constant chaos and ongoing change - in a structured way.
If you would like more information please contact Hina Pendle at
hina@uspartners.com or William Ulrich
at tsginc@cruzio.com.
Copyright © 2000 Tactical Strategy Group, Inc.
Copyright © 2000 US Partners