Organizational Design in the 21st Century

1
The
organization  
is broken

0.0
1.0
2.0
3.0
1949 1969 1989 2009
2
P R O D U C T I V I T Y
W A G E S

0.0
6.7
13.3
20.0
1949 1969 1989 2009
3
S H A R E O F I N C O M E ,
T O P 1 % , U S A
G E R M A N Y
S W I T Z E R L A N D
P O R T U G A L
J A P A N
I T A L Y
S P A I N
F R A N C E  
F I N L A N D
S W E D E N
D E N M A R K  
N E T H E R L A N D S

-4.0
0.0
4.0
8.0
1949 1970 1991 2012
4
P R O D U C T I V I T Y / G L O B A L O U T P U T

0.0%
1.7%
3.3%
5.0%
1965 1980 1995 2010
5
R E T U R N O N A S S E T S

0
23
47
70
1958 1982 2006 2030
6
A V E R A G E L I F E S P A N , C O M P A N Y O N S & P 5 0 0

9
Every day, millions of
people wake up and play
a boring RPG called
‘Professionalism’”
“
C O R Y D O C T O R O W :
Every day you see me,
that’s the worst day of
my life.”
P E T E R G I B B O N S :
“

10
Wait.
What about  
everything else?

11
0
300,000
600,000
1946 1966 1986 2006
C O N F L I C T D E A T H S , A L L T Y P E S , 1 9 4 6 - P R E S E N T

12
0%
50%
100%
1880 1940 2000
S H A R E O F W O R L D W I T H A B A S I C E D U C A T I O N

$0
$1
$1,000,000
$1,000,000,000,000
1961 1981 1997 2000 2001 2003 2007 2011 2013
13
C O S T P E R G I G A F L O P

0%
33%
67%
100%
1995 1999 2003 2007 2011 2015e
14
N O I N T E R N E T
N O S M A R T P H O N E
G L O B A L A D U L T P O P U L A T I O N W I T H . . .

15
Category Starting Cost Current Cost Timeframe
Cost Performance
Improvement
3D Printer $40,000 $100 7 years 400x
Industrial
Robots
$500,000 $22,000 5 years 23x
Drones $100,000 $700 6 years 142x
Solar $30/KwH $0.16/KwH 30 years 200x
Sensors $20,000 $79 5 years 250x
Neurotech $4,000 $90 5 years 44x
DNA
Sequencing
$10,000,000 $1,000 7 years 10,000x

16
0
8
16
24
Average 
Fortune 
500
$GOOG $FB $TSLA Uber Snapchat Oculus  
Rift
Y E A R S T O $ 1 B V A L U A T I O N / C A P I T A L I Z A T I O N

17
What  
should  
I believe?
T B H , I T ’ S H A R D T O S A Y .

18
Work is simultaneously
easier and harder than
ever before.
B U T I N P O C K E T S , W E ’ R E F I G U R I N G O U T H O W T O D E A L "

22
WHAT’S  
HAPPENING  
HERE?
WHAT’S  
HAPPENING  
HERE?
WHAT’S  
HAPPENING  
HERE?

27
The legacy
organizations  
are broken
that we designed 100 years ago
legacy
that we designed 100 years ago

We’re pursuing a normative
definition of an “organization”…
that is, what it should be in the
21st Century
28

Should work be easy? Should it
be fun? Should it be a happy
place? Should it be perfect?
29

We’re building an understanding
from lateral and direct models,
and through applied practice.
30

Something with “The Quality”…
1. is alive; invigorated, but not
literally living
2. is whole; free from
contradictions, but not
enclosed or cut off
3. is comfortable; tuned, fit, not
just soft or yielding
4. is free; wild, true to nature,
but not without constraint
5. is exact; particular to
specification, but not perfect
6. is egoless; unselfconscious
but not without the maker’s
“self”
7. is eternal; self-maintaining,
but not mysterious, or
religious
Christopher Alexander
31
G O O D B U I L T E N V I R O N M E N T S

Five main performance
criteria:
1. Vitality
2. Sense
3. Fit
4. Access
5. Control
Plus two meta-criteria:
6. Efficiency
7. Justice
Kevin Lynch
32
G O O D C I T I E S

1. High-quality output, as
judged by the team’s
customers
2. More capable as a team
than when they started
working together
3. Makes significant positive
contributions to the lives of
the individuals on the team
Wageman, Hackman & Lehman
33
G O O D T E A M S

1. Consensus Oriented
2. Participatory
3. Follows the Rule of Law
4. Effective and Efficient
5. Accountable
6. Transparent
7. Responsive
8. Equitable and Inclusive
United Nations
34
G O O D G O V E R N A N C E

1. Individuals and interactions
over Processes and tools
2. Working product over
Comprehensive
Documentation
3. Customer collaboration
over Contract negotiation
4. Responding to change over
Following a plan
Agile Manifesto
35
“ G O O D ” = A G I L E

IDEAS:
1. Interfaces
2. Dashboards
3. Experimentation
4. Autonomy
5. Social
SCALE:
6. Staff on demand
7. Community and crowd
8. Algorithms
9. Leveraged assets
10. Engagement
Exponential Organizations
36
“ G O O D ” = F A S T G R O W T H
M A S S I V E T R A N S F O R M A T I O N A L P U R P O S E

Reinventing Organizations
37
Formal Roles Innovation Empowerment Self-management
Processes Accountability Values-Driven Wholeness
Meritocracy Stakeholders Evolutionary
Purpose
E V O L U T I O N A RY
O R G A N I Z AT I O N S
P L U R A L I S T I C
A C H I E V E M E N T
C O N F O R M I S T
“ G O O D ” = H E A L T H E W O U N D S O F M O D E R N I T Y

1. Individual benefit as
important as the overall
corporate benefit
2. Strategy before technology
3. Listen to the voice of the
employee
4. Learn to get out of the way
5. Lead by example
6. Integrate into the flow of
work
7. Create a supportive
environment
8. Measure what matters
9. Persistence
10. Adapt and evolve
11. Employee collaboration also
benefits the customer
12. Collaboration can make the
world a better place
Future of Work
38
“ G O O D ” = C O L L A B O R A T I V E

1. Lead for the long run
2. Value diversity
3. Reinvent market incentives
4. Foster collaboration
5. Drive full transparency
6. Create thriving
communities
7. Scale true accounting
8. Restore nature
9. Redefine reward systems
10. Ensure dignity and fairness
The B Team
39
“ G O O D ” = S A V E T H E W O R L D

1. Purpose over Profit
2. Empowering over
Controlling
3. Emergence over Planning
4. Networks over Hierarchy
5. Adaptivity over Efficiency
6. Transparency over Privacy
Responsive Organizations
40
“ G O O D ” = A D A P T A B L E

1. Improve understanding of
what coworkers do
2. Reinforce the people who
are integrators
3. Expand the amount of
power available
4. Increase the need for
reciprocity
5. Make employees feel the
shadow of the future
6. Put the blame on the
uncooperative
Yves Morieux’s Six Simple Rules
41
“ G O O D ” = A D V A N T A G E A M I D C O M P L E X I T Y

1. Never add a process or a
layer unless you absolutely
have to
2. Never blame a problem on
someone’s mentality or
mind-set
3. Don’t let decisions be
escalated to you
4. Don’t rely on financial
incentives
5. Don’t try to measure
specific behaviors
Yves’ Five (Actually) Simple Rules
42
“ G O O D ” = A D V A N T A G E A M I D C O M P L E X I T Y

43
Organizational
Design
Criteria

Eight performance criteria:
1. Purposeful and important
2. Quality, achievement and
context fit
3. Alive and interesting
4. Fairness and equality
5. More, and more forms of
power for all
6. Connected beyond our
walls
7. Supportive, safe and
comfortable
8. Transparency, signaling and
internal connectivity
Ever-Better Organizations
45

2. Dean Baker, Center for Economic
and Policy Research, “The
Productivity to Paycheck Gap: What
the Data Show” 2007
3. World Top Incomes Database and
Max Roser
4. University of Notre Dame Mendoza
School of Business
5. John Hagel III, John Seely Brown,
Tamara Samoylova & Michael Lui,
“Success or struggle: ROA as a true
measure of business performance”
Deloitte University Press 2013
6. Richard N. Foster and Sarah Kaplan,
Creative Destruction 2001
7. Carl Benedikt Frey and Michael A.
Osborne, “The future of
employment: how susceptible are
jobs to computerization?” 2013
8. Gallup US Daily Survey, 2014. N =
80,837
9. Perhaps apocryphal, but cited to
Cory Doctorow. Also, Office Space
11. Human Security Report Project,
Battle Deaths from State-Based
Armed Conflicts by Region,
1946-2007
12. Max Roser visualization of data
from van Zanden, J.L., et al., “How
Was Life?: Global Well-being since
1820” 2014
13. Top 500 & Wikipedia
14. Benedict Evans, Mobile is Eating the
World
15. Michael S. Malone, Exponential
Organizations 2014
16. Ibid
23. Horace Dediu, Seeing What’s Next
2013
24. Yaneer Bar-Yam, “Complexity rising:
From human beings to human
civilization, a complexity profile,”
2002
25. Ray Morris, Operating Organization
of the Union Pacific and Southern
Pacific System, Railroad
Administration, 1920
Sources by page
46

31. Christopher Alexander, The
Timeless Way of Building 1979
32. Kevin Lynch, Good City Form 1981
33. Ruth Wageman, Richard Hackman
and Erin Lehman, “Team Diagnostic
Survey: Development of an
Instrument”
34. Yap Kioe Sheng, “What is Good
Governance?” United Nations
Economic and Social Commission
for Asia and the Pacific
35. agilemanifesto.org 2001
36. Michael S. Malone, Exponential
Organizations 2014
37. Frederic Laloux, Reinventing
Organizations 2015
38. The Future of Work Community
39. The B Team
40. responsive.org
41. Yves Morieux, “Smart Rules: Six
Ways to Get People to Solve
Problems Without You” 2011
42. Ibid
Sources by page, continued
47

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