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|In: Cognitive Enterprise|Last Updated:

I always liked Mr. Spock.

This was in spite of his profoundly stupid ongoing arguments with Dr. McCoy about the value of emotions in daily life.

[If you’re lost, you never watched Star Trek. I can’t help you. You’ll just have to pick it up from context.]

It’s our emotions that cause us to want. Decisions are about people getting what they want. If Mr. Spock has no emotions he doesn’t want. No wants, no decisions.

And not only people: A flatworm in a T-maze has to decide whether to turn left or right. It does so based on whether, in past trials, it encountered food or electric shocks in one or the other direction. It “wants” food and also wants to not experience another electric shock, and it makes its decision based on those wants, although, as we haven’t yet achieved telepathic rapport with planaria, of necessity we’re using “want” fairly loosely.

One could, were one an argumentative sort, counter that we haven’t yet achieved telepathic rapport with each other, either. We each might know what we want, and, for that matter, that we want, but we can only infer the same about each other.

When Scott Lee and I wrote The Cognitive Enterprise we wrestled with the challenge of building organizations that act with purpose — that make similar or complementary sorts of decisions no matter where in the organization each decision is made.

Or, avoiding the passive voice, no matter who in the organization makes each decision.

One of the challenges: Comparing humans to planarians, while we’re undoubtedly more sophisticated than flatworms in understanding what we want, we’re alike in the fundamentals, like wanting food when we’re hungry and wanting to avoid pain when something might hurt.

Organizations? Not so much, and in fact the more we stare at an organization the more our heads hurt trying to infer what “want” might mean.

The naïve among us might imagine that, narrowing our focus to for-profit businesses, what they want is more profits.

That view lasts only as long as it takes to recognize that business decisions are made by individuals and committees.

Imagine you’re one of those individuals. Now imagine you’re in the organizational equivalent of a T-maze. Turn left and the business makes more profits, but, it does so in part by defenestrating you. Turn right and profits diminish but you survive the experience and get a bonus.

Multiply by the number of decision-makers and you realize, there’s no reason to think the aggregate of all business decisions will be to increase profits. It will be to maximize the personal survival rates and compensation of those in a position to influence them.

But we’re straying from our focus, which isn’t the nature of the decisions made by an organization. Our focus is on whether an organization can and does “want” the way humans (and flatworms) want.

The answer, I think, is a resounding no. Humans and all other biological decision-makers want in the sense of an emotional need. Emotions are what set the targets for our decisions, which is why Mr. Spock’s emphasis on logic was misplaced: Without emotion, we can’t want anything and neither could he.

Logic is how some people (and most Vulcans) sometimes go about making decisions that get us what we want.

So ignore phrases like “corporate greed” and similarly meaningless formulations. There’s nothing about how an organization is constructed that would let us imagine it experiences anything that corresponds to greed or any other emotion.

The closest counterparts are its governance and its culture.

Its governance is the set of rules, guidelines, and organizational sub-structures … committees and councils … that its board of directors and management establish to encourage consistency in an organization’s decision-making.

Governance starts by assigning the authority to make decisions, typically includes prescriptions for how those authorities are supposed to make them, and somewhere along the way also defines what want means: The organization might want more profits, mission achievement, or the recently demoted increase in shareholder value.

In a cognitive enterprise, as you know if you read the book, culture is the new governance. Culture is how we do things around here. It’s the sum, substance, and consequence of the assumptions — conscious and unconscious — and other mental habits shared throughout the organization.

A cognitive enterprise — one where culture is the primary form of governance — might not want in the human sense.

But it has at least a chance of acting as if it did.

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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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