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|In: Cognitive Enterprise|Last Updated:

Short-term decision-making dominates modern executive decision-making.

It’s a common and frequent criticism. But as the success of Agile application development methodologies in IT has demonstrated, short-term decision-making, in and of itself, isn’t always a problem.

Assuming long-term outcomes, on the other hand … now that’s something that can cause immeasurable grief.

Take, for example, the popular pastime of reorganizing for success.

Before we get started, though, let’s clear out some common confusions, namely, the difference between reorganizations and restructurings, and between both of these and the increasingly popular notion of redefining an organization’s operating model.

Properly used (KJRSpeak for “the way I use these terms”), reorganizations are the legendary RMS Titanic deck chair rearrangements. Reorganizations keep existing workgroups and their responsibilities intact but change the organizational hierarchy they fit into.

The best that can be said for reorganizations is that they can remove or reduce the size of barriers to collaboration among workgroups. What’s usually left unsaid is that for every barrier a reorganization removes, it introduces other barriers that weren’t there before: Reorganizations fix what’s broken by breaking what’s fixed.

On top of which come the hidden costs of everyone keeping their heads down until they figure out the new collection of hidden rules that come with new management to replace the hidden rules imposed by the old management regime.

Even worse: Reorganizations can distress or outright kill the pursuit of important business opportunities, because a new organizational hierarchy often means the business sponsor for a given initiative, who cared deeply and profoundly about its success, has new responsibilities for which the initiative is utterly irrelevant.

Likewise, the newly logical sponsor for the initiative in question is likely to have very different ideas about what’s worth investing in and what isn’t.

Restructurings are more profound than reorganizations. At a minimum, in addition to changing the organizational hierarchy and the position of workgroups in it, they also reassign some responsibilities among the existing workgroups.

Restructurings can also eliminate some workgroups while introducing others, and in general try to change how work gets done, with the new workgroups and hierarchy designed to facilitate the process changes that are the point of the exercise.

But along the way to achieving the hoped for improvements to organizational effectiveness come all the short-term losses associated with reorganizations, along with the additional short-term losses that come from changing how work gets done: Everyone involved has to unlearn what they knew in order to learn how they’re supposed to do things now.

Operating model changes are even more thoroughgoing. They recognize that process changes take more than process and organizational designs. They include the entire internal business architecture — people, processes, technology, structure, and culture.

That’s a good thing, because all of these need to be consistent with each other for a new way of getting things done to work.

It’s a bad thing because the more that has to change, the more likely it is that, beyond the cumulative effectiveness losses that accompany restructurings, operating model changes include two major additional concerns: (1) we didn’t think of everything the new operating model has to address; and (2) one or more managers or employee groups involved in the change might get some of it wrong.

Understand, some situations do call for reorganizations, restructurings, or new operating models.

But … (you knew “but” was about to happen, didn’t you?)

In The Cognitive Enterprise, Scott Lee and I introduced the “Stay-the-same / change” ratio — a metric that compares how long an organization takes to make a change to the length of time the change will remain relevant, and the organization can accumulate its benefits.

The ratio matters whenever the time needed to achieve a change is incompressible, while the time available for harvesting their results, is shrinking. Reorganizations, restructurings, and new operating models fall into this category.

Now metrics have their limits, and that includes any and all attempts to quantify the overall costs and the business benefits to be had from any organizational change.

That doesn’t exempt managers from thinking in these terms. In the absence of quantification the management team planning the change should discuss these questions:

  • How disruptive will the change be to our current level of effectiveness?
  • How long will the organization need to recover from the change?
  • Will our long-term gain in overall effectiveness be an order or magnitude or more, or an increment?

And then there’s the most important question: Given our history, how long do we expect the change to last before we reorganize again?

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|In: Industry Commentary|Last Updated:

“No man is an iland.”

So said John Donne, leaving us, in these more gender-neutral and lexicographical days, to decide how to make use of an otherwise wonderful turn of phrase without ourselves being tainted by gender bias or the spelling anarchy of days past, and also without imposing our own sensitivities by changing someone else’s words who, being demised, isn’t in a position to defend himself.

The quote also got me to wondering: If no one is an island (or iland), is anyone an isthmus?

Which in turn got me to wondering: As the only isthmus I can name is the Panamanian one, are there others? A quick Wikipedia check confirms there are, in fact, dozens.

(Also: A suggestion to all highway patrols: Use “Pronounce ‘i — s — t — h — m — u — s'” as a new field sobriety test.)

All this led me to ponder three questions: (1) accepting that no one is an island, does that provide any useful guidance for business leaders and managers? (2) Might some business leaders and managers be isthmi? If so, what lessons might we all learn from isthmus-style leadership and management? And, (3) might we recognize any other geographically oriented leadership or management styles that might, through similarly preposterous analogizing, provide useful insights for us?

Islands: This is an easy one. Organizationally, islands are silos. The water surrounding them helps prevent invasions from other islands. Also continents, which are just very large islands. The result: Organizational islands and those who lead and manage them have the luxury of avoiding collaboration with other parts of the organization.

This is, quite often, quite lovely for the island’s inhabitants; often less so for the enterprise as a whole, leaving it as an exercise for the reader to find figure out what everything beyond the island corresponds to.

Isthmi: Isthmi are small strips of land that connect two large pieces of land. Or, conversely, they’re narrow strips of land that separate two bodies of water. They facilitate trade and migration between the two pieces of land, while preventing trade and migration between the two bodies of water.

Some managers (and leaders; from here on in we’ll use “manager” for brevity rather than “leaders and managers”) … where was I? Oh yes … some managers are isthmi, connecting two groups that otherwise would behave like organizational islands. Others are isthmi in that they prevent groups that might otherwise collaborate with each other from doing so.

If you see yourself as a connector, make sure you aren’t also acting as a barrier without realizing it.

Peninsulas: Peninsulas are island wannabes. They don’t enjoy human contact and aren’t particularly good at it. Or else they aren’t particularly good at human contact and consequently don’t enjoy it.

Peninsular managers want the authority that comes with their managerial title but view the staff that come with it as irritations at best, sources of bad work they have to fix at worst. As for the managers they report to? They’re necessary evils who really ought to understand they’ll manage best by leaving the peninsula alone as much as humanly possible.

Mountains: Mountains are islands without the surrounding water. That makes a big difference in such matters as erosion and how hard it is to reach the base. Mountain managers like this — sycophants easily reach the base to admire them, without having any chance at all of reaching the top. And, like islands, the only mountains that are truly self-made are the volcanic ones (admittedly pushing the metaphor to the breaking point). All the others are what they are due to tectonic forces beyond their control.

Hills: What can I say? Hills think they’re mountains, when in fact they’re just piles of dirt that aspire to mountainhood but are easily climbed.

Lakes: Hey, we needed some water on the list, and oceans were simply too hard to analogize. Lakes, on the other hand? They’re generally pleasant, nurturing, and in the winter, here in Minnesota, at least, they freeze over, allowing those who like this sort of thing to pitch shelters on the ice, drill holes in it, and go fishing, hoping they don’t catch anything because that would interfere with drinking beer and swapping stories with their buddies.

Lake-like managers are also generally pleasant and nurturing. I’ll leave the rest to you.

For that matter, now that you’ve reached the end of this week’s missive, I’ll leave the point of it to you, too. If you think there is one, that’s what the Comments are for.

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