Too many organizations put their focus on strong processes and controls, but the results end up lacking and also damaging people.

There’s the assumption that clean and organized tasks lead to better outcomes. It’s an intuitive idea that seems strange to argue.

The sort of stuff I’m talking about includes:

• Structured framworks
• Process and job-based certifications
• Standards across teams
• Defined roles
• Templates, reports, updates.

I’m not even arguing about the value of specific practices, but moreso the idea that using them to create internal order, structure and efficiency does anything to improve outcomes.

How Work Gets Done

The reason why striving for internal order and efficiency doesn’t make sense is because it’s not how work gets done.

I like to think about the three types of networks in organizations, an idea I learned about in OpenSpace Beta:

• Formal Structure: How management organizes people into teams, units and divisions to reflect different functions and areas of accountability.
• Informal Structure: The network of trust and relationships that exists between people in an organization.
• Value Creation Structure: How works gets done in an organization.

This is where the problem starts. In order to achieve its objectives and control costs, management organizes people into big groups, and then to increasingly smaller and smaller groups. It’s a clean and ordered system, but it’s not how work gets done.

I saw this come up recently on Reddit after a Canadian bank laid of 15,000 employees last year.

A commenter on Reddit explains:

When I first started, there was a lot of collaboration and informal networks. You got things done by helping folks out, who would then help you out when you needed it…

…Porter gets in there and calls in the McKinsey consultants, who tell him that the bank needs to kill this collaborative vibe, in favour of internal competition and a more commercial approach. https://www.reddit.com/r/Scotiabank/comments/1q0esqz/comment/nwxzq1t/

Unfortunately most people aren’t aware of these different structures. To them, the idea seems to be that work doesn’t happen within a designed structure is a sign of inefficiency and higher costs. To them, working happening outside of a designed process is something to fix. And as the Reddit comment shows, that drive for efficiency kills the hidden systems that actually make work happen.

Work doesn’t happen by playing tetris with people and skills

The Informal and Value Creation Networks rely on:

• Trust
• Tacit Knowledge

This is why at some companies, the number of years employees have worked there means something. Because trust and tacit are resources that build up slowly over time.

The focus on trust also emphasizes the importance of hiring for attitude, rather than just skills. People who damage or destroy trust in an organization reduce the power of the informal structure and value creation structures which are needed to produce outputs.

Micro-Management

Unfortunately, too many organzations only pay attention to the Formal Structure, and where that behaviour creates a problem is as things get smaller and smaller.

The need to for efficiency and order and to design a better formal structure continues as things get smaller and smaller.

What starts as an exercise at organizing divisions, business units and teams, ends up controlling every aspect of work.

It goes down to controlling

Too many times in my career, as one of the worst examples of control, I’ve heard about managers trying to control or limit who people in their team are allowed to talk to.

In large organizations, teams are never just tasked with deliverying value. They’re tasked with deliverying value despite all the constraints imposed onto them by the company in which they work and their managers.

Effectiveness

It’s not a terrible idea to review each of your practices and judging them based on whether their purpose is to increase efficiency or effectiveness.

Going through a lot of Agile practices should reveal that many of them are designed for effectiveness.

• Pairing and Mobbing bring a lot of resources together to solve a single problem.
• Discovering and determining what to build through conversation rather than written documentation.
• Making decisions with imperfect information and planning to redo work.
• Doing lots of short-term planning rather than following a single, master guide.
• Having each team design it’s own process and flow rather than following a standard.

If the goal was to reduce cost and boost efficiency, none of these Agile practices would make much sense. But they’re effective. They help teams perform better, learn faster, and produce better outcomes.