Join Derek Hudson as he explores Essential Dynamics, a framework for approaching the challenges facing people and organizations. Consider your Quest!
Welcome to Essential Dynamics. I'm Derek Hudson. I'm the host of the Essential Dynamics podcast. Excited to be here with my colleagues from Unconstrained, Ann McTaggart and Glenn Vanstone. Ann and Glenn, good to see you again.
Ann:Morning, Derek.
Glen:Good morning, Derek. Good morning, Ann. It's, nice to be back. Thanks.
Derek:It's good to be together. So the Essential Dynamics podcast brought to you by Unconstrained explores the concepts of Essential Dynamics, a think thinking framework we've been working on that helps us, think through interesting challenges and tricky opportunities. And in the podcast, we like to explore these concepts through deep conversations with interesting people. And so let's just jump into it today. This is the third episode of season four.
Derek:In season four, we're trying to get more focused on support to business leaders and giving them information that they can use to, run their businesses better. And, came up with the list. I started with the top five business traditions that have to stop now, But I didn't stop at five, and I think I got up to about 13. And today, I wanna just talk about the first one, which is the problem that organizations have when they set up, divisions or business units, which immediately then becomes siloed from the rest of the organization. I think we've all lived it.
Derek:I wanna maybe start with, problem, maybe not maybe not definition, but description anyway of situations that we've been in or we've seen, where we we do this to ourselves. So maybe maybe Glenn, you could, you could start out with your reaction to the topic.
Glen:Oh, thanks, Derek. Sure. I'm happy to start. Well, first thing that pops into my head is the notion that organizations crave organizing. You know, people when they get into a group, they have this natural tendency to attach labels and we use that to identify activities into groups, etcetera.
Glen:A it's kind of a natural thing, but the idea of organizations getting kind of overthinking their organizing functionality, it's it's not only is it way too much sometimes or too conventional, but it also is the whole idea of artificially creating silos around functions. It's a form of management, not a form of anything else. It's how we how we manage people. It's how we put them into groups.
Derek:Let let me let me jump in there, Glenn. It's I think it's how we manage complexity. And our tendency to looking at something complex is we're gonna we're gonna break it into pieces, and then it's gonna be somehow easier to manage or understand. And the problem is that if you have a system that relies on all the parts, as soon as you take the parts apart, then you don't have a system. So I gotta go to Anne here for more comment, but I think we're gonna have lots to talk about today.
Ann:Yes. Thank you. When you I love your comment, organizations crave organizing. But I think that it kinda goes even further back. Think about when you were in school or you were learning if you were in a in a business program.
Ann:They have whole programs on how to organize the organization. The HR discipline of categorizing and competency development and, leveling and organizing is more in in organizations is more of the more of the same. But I think that, you know, we learn or we we're learning what we believe at the time about best practices is how you set organizations up to run well. But then you get out into the business world, and they everybody's doing the same thing. They're organizing, groups into business units or or, subteams or whatever.
Ann:And I think the intent of that is to create efficiencies, But I don't think we realize in those intent to create efficiencies that you're just there's there's a cost and benefit of doing that. There are efficiencies in the team building of those smaller teams and units, but there's so much lost and nobody notices how much is lost by building walls between divisions and competition between divisions because no one's working towards the greater good or the purpose of the organization because they're working to the purpose of their department or their division.
Glen:Wow. That's true. We we create little tribes. Right? We have these, you know within organizations, we we put people into smaller functional groups and and kind of foster this sense of tribal, communal effort within organizations.
Glen:And what's hilarious about all that, from my perspective, is we we put people into groups and categories and labels and these little tribes or whatever it is, because they're they're like in some fashion or they have the same sort of a function. And then once all of that is built, we turn around and say, jeez. Let's put a whole bunch of time and energy, telling them not to behave that way and start to be more cross functional. Yeah. So we put a lot of energy to organize everything, and then we turn around and say, jeez.
Glen:Everybody should work together more.
Derek:So one of the things I wanted to do with these this next series of podcast as is to call out these ideas and, stomp them down a little bit because I think we're we're too, we're too lazy, in challenging these these norms. And so one of the things that I I want us to be able to do is to attack ideas. Ideas this is this is my thinking. Ideas don't have any rights. They don't have any feelings.
Derek:They either they stand up based on truth and efficacy or they fall down. And this idea that we can divide an organization up into pieces in in my mind is a fallacy, and it's not challenged enough. So I just wanna put that out there that if your feelings are hurt, maybe it's because you identify this idea, but the idea can't stand on its own. I don't I don't think. Here's here's an experience that I had.
Derek:I was, in a meeting in an organization that was, divided into functions like sales, engineering, operations, and and admin. And a bunch of stuff wasn't going well. And so somebody was up on the whiteboard, and we were sketching out all of the problems. I remember where I was sitting, all of a sudden the light goes on. And I'm like, every problem that we have that we've been talking about is in the white space.
Derek:It's in the it's nobody's responsibility. It's in the connection between the units. It's not inside the units. The units are fine inside. But every time something has to go from one to the other, it's not working.
Derek:And the thing is we can't add any value to a customer without the stuff flowing through all of those pieces. And so we're deleting ourselves if we say, well, you know, operations has it. Right? It's obviously not an operations problem because nobody cares.
Ann:I think it, we've probably all been in those kind of meetings. I think I look back on my experience. Similar. I didn't, you know, have the epiphany, that you did, but I always caught, boiled it down to it's a communication problem. But what you've said here today, it it's more than a communication problem.
Ann:It's an accountability problem. And so accountability to where does my business unit or division or team or role fit in the delivery of that customer value, nobody thinks about that. So we're all good as long as our metrics are met in our little silo that we're in. So we're good to go. Don't look at us.
Ann:It's that guy.
Glen:Well, one of the things that happens, of course, is is that tribal nature of of of silos and organizational structures kinda reinforce that, us versus them mentality, even though it's all one organization, one team. But we do things because people think that we do things and we do them well because we create real value. And so they conflate their value creation thing, and they don't necessarily understand what another group's value creation is and how it fits. So it's very difficult to connect those two together when you're sitting within that silo. So yes, we've all been in those rooms where everybody looks at all this stuff and says, Yeah, well, we do things well, we create value and I can't speak for everybody else.
Glen:So the uncertainty rests with the other guys. And then, you know, somebody's in there like Derek, you're saying is, you know, trying to fill the white space in between with meaning and how does that all work. Now I'll tell you one other thing is, is anytime there's an organization that has the structures and has, you know, reporting lines and all of that stuff into it, people will say, Well, that's our organization. But they don't necessarily realize, or maybe some of them intuitively do, is that every organization actually has two. There is the structural organization of labels and categories and everything, and then what I call the shadow org chart.
Glen:And the shadow org chart is how things actually get done. Because I bet you we've all been in organizations or familiar with organizations that would be able to say that this person is a node, that person is a node, that person is a node, and all real things that happen in the organization of importance in some way, shape, or form flow through those people. And they may be in different org charts or pieces or functions or whatever it is, but they're actually the important nodes by which all of this white space, if you will, Derek, actually gets done. And often I bet you there isn't a many, silo leaders who are in a position to be actually named that, or point out that particular shadow orchard, but everybody within those buckets and those silos knows exactly how things get done and who's involved and who has to be, you know, connected. That's the shadow org that exists underneath every formal and official org chart.
Derek:Let me pick up on some An said and then something Glenn said. So, An, you talked about accountability. And remember we had Kristen Cox on, couple years ago for for three great episodes, and she talks about the seductive seven, which are things that we think are gonna help the organization and we delude ourselves into making progress or that we're making progress by these things. And one of them was accountability. More accountability is gonna fix the organization.
Derek:But but she always, appends that accountability and then in brackets, blaming. And so we like accountability because then we can blame. And if we can blame somebody else, then we're off the hook. And so we're, you know, we're clean. And if you think about an integrated process, it's it's all the pieces of the system that have to function together.
Derek:And, I'm way more interested in collective efforts towards results than, you know, apportioning blame. If it if it doesn't happen, it doesn't happen. If if we if we're able to work things through, we'll all take the credit because everyone does contribute. So that's one thing. And then, Glenn, on a shadow organization,
Glen:the
Derek:way I think about it is org chart's really good for two things. One is approving vacation time, and the other is if you absolutely have to do it, I'm not a huge fan, but if you have to do it, you can do your annual performance review. But other than that, they're nothing. And and as a consultant, I don't know how many times I've asked someone, you know, tell me about your organization, and they slide the org chart across the table and, like, that as if that explains something. So so in an organization that works, natural selection will tell you that there must be doing something right if we're still living and breathing.
Derek:And so, Glenn, you referred to as a shadow organization. Another way to look at it is the way a company, an organization adds value is either in a kind of repetitive system, which we could say is like manufacturing, or it's in a project based environment. And, manufacturing has steps. They come from, you know, every which way you're processed in a in a particular order, and that that's the value chain. That's how stuff gets done.
Derek:And in a project organization, every operation, every, project's a little bit different, and so you don't have the same people. You don't have repeatable processes. But you still grab parts from all all different parts of the organization, and you do something that creates value. One of the ways that I really like kind of imagining how this works is when I watch a movie, and then you watch the credits at the end. And the credits, you know, and and it'll be like, it'll be like production accountant and, assistant to mister so and so or costume designer for miss so and so.
Derek:And when it goes on and on and on, you realize how many different functions were involved. And we don't really care. They don't they don't send the org chart. They put the names, and then you get the product of the movie that you get to see. And I just I guess I'm gonna ask you both a question.
Derek:Why do we fight to hang on to the org chart? And why do some popular, business management techniques, number one, take you to, let's divide up the organization and into functions? Why is it so persistent? Anne, you go first.
Ann:Well, I'm gonna have the rhetorical question to the question. Why is why is it so persistent? I think because it's ingrained. And I also think that there it's ingrained. So we do what we do because we do what we do.
Ann:And there is there hasn't been a disruptor, to, you know, we're still doing okay. We're still doing the best we can do. We're still in existence. So we just keep doing that. So nothing has made us do a a pivot to do something completely different.
Ann:The other thing is I don't think that the people that are working in the business ever have the opportunity to work on the business so they can see the problems with white space void, if you wanna call it that. And so until somebody points out that the business is or the leader can see that the business or the creation of value in the business, it's one system. I don't know that you can see that the white space void exists or that there's this competition, and it's not efficient moving in even in a project organization from from this function to this function to this function as the project progresses and finalizes for delivery.
Derek:There's lots there, but, Glenn, jump in.
Glen:Yeah. Ripping that. Why does it why does it stick? One is because we've got a very long history of organizational success stories that have replicated that model of labeling and organizing people into groups, and entire management careers that have been formed and successful of people managing that group or tribe, mentality. So there's the value creation that is allows the us versus them, which reinforces that I create value every day, and it's with, what I do and the functions I perform and, to the benefit of my tribe, my group.
Glen:And then I have the leader who is reinforcing that, because they've been built in that same management style of, functional excellence is of their contribution. So you have that. But I think about, you know, what happened with the pandemic. Remember first, we had groups that were co located, but they were more or less often physically separated from the other silos within organizations, right? So we had that and then they they they were separated from each other because, we had to separate.
Glen:Right? We we created that, the tribal thing was broken up and people got sent away. And that was really difficult on management because managers had to learn to, manage, people's contribution where they have been historically aligned to managing people in the workspace. So I think that natural tendency of managing people in the workspace is part of that co location and that tribalism success criteria. So pandemic tore all that up and said, No, we need to learn how to manage people's contributions, not their presence, if you will.
Glen:And so we started to break up that tribalism, you know, that sense of us versus them because we were now asking people to contribute value in a different way. And here we still have now this gravity pole of coming back to the same kind of management mentality structure of, Hey, it's time to get back to the office. Time to get back. Time to do it because that's what we've known. That's what we understand.
Glen:That's our common frame of reference. So the gravity pole to come back to tribal performance is very strong. It's very pervasive. And it's always thrown back to say, because that's what the customers want in some way of of creating that argument. So it's a there's a lot of gravity around that tendency.
Derek:So so both of you refer to the inertia of this is the way we've always done it. You haven't referred to it, but, part of, the modern organization came from the military. And, so there's that, and particularly a related concept, and you talk about, well, if you can't see the whole system, then, you can't manage by it, so you manage by the piece that you can see. And then, Glenn, you added to that, well, we used to, put everyone in the same room or the same part of the building that had the same function. So that reinforced the number of years ago that, occupied a large campus, with a lot of parking in between, and, it would take ten minutes to walk across from one building to another.
Derek:Of course, we have cold winters sometimes, and, the silo walls were very high despite the fact that you could phone, you could have a meeting, you could walk across. But once they got in that building, that became the world. So I I think there's, there's a lot of things that reinforce that. I just wanna add add one other, and then we're gonna have to pick this conversation up in our in our next meeting. The other one I wanna add is that there is something, that reinforces the value of this to the middle manager or even to the vice president.
Derek:Like, if you can be in charge of something where you have a chart and there's people and they report to you, and you can be the boss and you can build the empire, there's something to that. And and so as soon as you set somebody up, then you're taking something away if you if you take it down or diminish it. And, so I think there's that that's one of the forces that resist this change that Anne is saying. Well, we need some kind of a shock, And it wasn't COVID wasn't enough of a shock. Glenn, you're saying it it did force you to focus on contribution because you couldn't supervise the presence.
Derek:I was talking to my son-in-law. He, he works at Suncor, and since October, new with their new CEO, they've been a % back in the building. And and you wonder, is that to supervise the presence again? Because at some point, they weren't doing that. So I think we've what we've come to is that for legitimate reasons, we break our problems into pieces, because it's overwhelming to think of the big problem.
Derek:And then when we break them into pieces, there's all kinds of reasons why they stay separate and why that that tribal, tendency gets, gets in the way of the work. And so we have these voids or white spaces in between where the interface is between the groups where all the problems are and nobody's working on them. And despite that, the work gets done. So there are process flows, there are projects that get done, but we don't formally manage by them, and then spend all our time, rearranging what the where the boxes are, instead of really understanding the system and the process. So, final thoughts, Anne and then Glenn.
Ann:I think there's a lot of work to do in illuminating that white space. And the more, we talk or business leaders talk and and look to see if they have a a white space problem, I think they'll they'll realize that there is still more they can do and improve their bottom line, improve their efficiencies and effectiveness in customer delivery if they just look.
Derek:Just look. Glenn?
Glen:The kind of classical organization, the way I call it, the classical organization we've been talking about, really is all about operational excellence and control. That's that's where that kind of an organization, is bent to. But there are alternatives. There are different alternative organizational structures, but it depends entirely on what the organization is trying to do. For what purpose does it exist?
Glen:And I think if we think about, stepping back away from the, the various tribes and go back to what's the purpose of the organization and what are we trying to do, that will take a different direction in terms of what kind of alternative structures work really well, that you can experiment with.
Derek:Oh, it sounds like we got a sounds like we have a topic for next time.
Glen:There you
Derek:go. So let's, let's pick it up, in a couple of weeks. And so I'd like to thank my colleagues, Anne and Glenn, for being on the podcast. Thank Brynn Griffiths for, making sure we sound better than we look. And until next time, consider your quest.