On first acquaintance, orgtology might seem like a new name for old shoes. This is not the case, since orgtology has specific assumptions about organisation. These differ significantly from traditional organisational thinking. Executives who use orgtology as management tool, find it impossible to revert to traditional methods. Below is a podcast interview with Assistant Commissioner Nkambule, from the Eswatini Revenue Authority, where he explains why it's hard to revert to traditional methods once you began working with the orgtology principles.
In this essay, I give answers to common questions asked about orgtology. If there is something that you find not covered, please post in the comments box below, and I will be happy to respond.
Orgtology works from a basic premise that separates receptive from projective activity. In this way we can accurately measure both the algorithmic and abstract parts of an organisation. This is important since to manage anything, one must be able to measure it. Traditional organisations do not make this split, which often leads to inaccurate assumptions, because of inaccurate data. E.g., The KPI system assumes one metric to measure all areas of human performance. Yet, the things we do to change the organisation have different rules to the things must we do to run it. The former is about moving into an unknown future, whist the latter is about repeating a known past. Similarly, a healthy human mind does not imply a healthy body, and vice versa. This is because the body and mind do not operate on the same rules.
Lao Tzu, the Chinese philosopher, explained receptive/projective duality best - "The usefulness of the cup is its emptiness." The cup and the space that it creates is the receptive, algorithmic, and predictable construct, which can contain numerous things. What we decide to throw into the cup is projective, unpredictable, and unique. In orgtology, we call that the X-Factor. Even if two people make the same coffee, the two cups will not taste the same.
In orgtology our task is to manage an equilibrium between dual parts. The receptive side of an organisation is mathematical, algorithmic, and predictable. We measure it through rules, targets, and outputs. We govern it through processes, policies, and procedures. The projective side of Org is abstract, random, and unpredictable (X-Factor). We measure it through goals and outcomes. We drive it through strategy, programs, and projects.
It is about understanding the difference between running and changing your organisation. They do not operate on the same rules.
It is never a good thing to change values. The challenge is not to seek new values, but to apply standing values to a new context. E.g., in the past customer service might have meant face to face contact. With Covid that might prove difficult. Yet, it does not change the value. It just changes the way we apply the value.
Finding new ways to apply values within a constant changing environment will stimulate growth and innovation. From an orgtology perspective, values will be the receptive element (consistent, predictable, etc.), whilst new behavioural rules around such value will be the projective element (abstract, new, experiential, etc.). Finding new ways to apply old values will help to bring balance between uncertainty and certainty.
Orgtology would define "normal" as an internalised process. We talk about "new normal" when an old process no longer works, yet we are not certain about what the new process will be. This became quite a catch phrase during the Covid pandemic. We began working at home, got into online shopping, had to wear face mask when going out, etc. Through talking about "new normal", we express our concern that things can never be the way they were.
During this time, some of my clients ran on an orgtology model. In my view, they were less disrupted than their traditional counterparts. This is primarily because they were less department bound and more team bound. A person is mostly part of many teams. Through working beyond the departmental boundaries, employees can help to efficiently "wire" organisational processes.
As mentioned, orgtology splits algorithmic flow from abstract thinking. In so, we organise work in terms of efficient flow, whilst we base the future on probable effect. This practice renders traditional organograms less important. In fact, with the rise of artificial intelligence, old organisational structures will simply make no sense. This is because AI sees Org as a purpose expressed through activity flow, resourced through people, money, and assets. AI would therefore aim to find the most efficient way to express purpose. E.g., a traditional organogram would have departments, of which one might be HR. We would then gather all people who have knowledge and skill around HR in the department. They will then meet and make HR decisions. This will not make sense to AI, because its not the most efficient way to manifest purpose. AI would cluster recruitment, Procurement, and budgeting together, because they service the same purpose, which is to resource Org. In so, they would also cluster customer, stakeholder, and employee relations in one system because these all manage the relationships of Org. Etc. One can then see that the idea of an HR or Finance or any other department would make no sense to AI. These departments were made for a human controlled organisation. Today more than 60% of the average organisation can be run without human intervention.
The fundamental building blocks of any organisation is resources (energy) and activity. The choice is whether to organise activity around resources, or contrariwise. Orgtology supports the latter because it helps organisations to effortlessly transform. Both activity and resources are dependent on purpose. It is rare for purpose to change. Therefore, where we rearrange resources and activity around the same purpose, we still have a strong certainty in place, which results in reduced stress. I.e., orgtology will help organisations establish a new normal through giving them a framework that will not change as the environment does.
From an orgtology perspective, chaos is an opportunity to redefine things. We can learn from chaos, and hopefully we also grow. Where chaos is not understood, and its benefits not seen, even the aftermath can become destructive. Through Covid we have created amazing technology and have enhanced old technology. We have driven medical communication and advancement, etc.
By understanding operations (order), we can create effective strategy (chaos). This should negotiate a beneficial position (equilibrium) for us. We thus run and change our business for maximum outputs and effect. Chaos is a necessary component to order. Organisations who get this will show progress.
Through splitting activity and resources into the algorithmic and abstract parts of an organisation, we can increase their efficiency and effectiveness. We would then know what to automate and what to leave creative and abstract.
Orgtology frees the EXCO team from operational entanglements so that they have time to create the future. In so, we automate running of the business so that we have time to work with changing the business. This will enhance effective strategy which in turn will drive competitive advantage.
At the time of drafting this essay, I have just completed a culture project with Microsoft. We created an orgtology model for them to manage a culture of diversity and inclusion. This is important for any multinational company. In line with orgtology principles, the model aims to find equilibrium between its receptive and projective parts. In this case, our receptive part was "organisational sameness". This pertains to definition and identity. Mission, values, and the company business model create a "sameness" framework for Org. In so, "difference" becomes the projective item. This is the uniqueness that every individual brings to Org. We created a system called "the 12-conversations", which are conversations that each employee must have with a trained coach. Through this dialogue we constantly work towards an equilibrium between organisational unity and individual diversity.
An orgtology model will drive an extremely calculated and algorithmic operational environment. Accountability thus becomes an automated and precisely measurable part of the organisational process construct. In fact, the companies where we implement orgtology solutions tend to converse less about accountability, since this is imbedded within the operational wiring of their process construct.
Yet, running the business is only one part. We also must keep Org relevant. This we do through linking all change initiatives to one vision. We have a model, called the 5V Model that facilitates this process. In precis, all operational activity and resources are accountable directly to the organisational purpose. In turn, all strategic initiative is directly accountable to intent. For this reason, clarifying purpose and intent is the first task of any Orgtologist.
The word "execute" has a strong finality to it. It depicts the end of something. Wen we run Org; we cycle activity. There is no execution, just processes that cycle without an aim to an end. That is the receptive part of Org. On the projective side we must change things. This is about strategy, innovation, vision, and expansion. This is an issue of execution. All these things are projects that have a clear beginning and a well-defined end.
From an orgtology perspective we run the business through process efficiency, and we change the business through project effectiveness. That is how orgtology resolves this. Poor execution would directly imply poor project management.
The orgtology model for organisational design fits the 4th IR hand in glove. We realise that humans have no ability to compete against AI when it comes to efficiency. Process design is something that we should leave for machine intelligence to do. Comparing human developed processes to AI designed processes would be like comparing kindergarten drawings to the Sistine Chapel ceiling, painted by Michelangelo. Yet, we also know that a coin holds two sides, and that each depends on the existence of the other. In so, abstract thinking is as hard for AI as complex algorithm is to humans. Yes, AI can write a good song, but it cannot become Bon Dylan. Neither can it have the arrogance of Elon Musk or the charisma of Nelson Mandela. Recently I watched a documentary where AI wrote the script for a movie, but the idea to do that was human.
Through orgtology, we design organisations where the abstract thinking and emotion that humans hold become the foundational blocks on which AI crafts the movement of activity and the utilisation of resources.
I have run many strategy sessions in my time. Yet, about three years ago I stopped doing that. I began to realise that a dynamic environment needs dynamic response. Strategy is about staying relevant. It is about quick response with maximum effect. To go to a three-day session and plan three to five years ahead is an illusion. The world is simply not that predictable.
The velocity of change escalates as time goes by. To deal with this, we need to negate the idea that operations follow strategy. Even worse, is the ancient idea that vision is where we want to go, and mission is how to get there. In orgtology we work with purpose and intent. Purpose is what we are, whilst intent is what we want to do with that. They do not have a linear relationship, but instead exist as a duality.
Power strategy firstly means having full control over your operational environment, thus holding tight reigns on your purpose. Through understanding the efficiency of running the business, one can know exactly what to change to enhance that. To change, we must be realistic in our desire. Thus, we must have a clearly defined future in mind.
Strategy is the plan that we have for change. It needs abstract thinking. If one has full control over the operational environment, one will have time to think and work with the future. This enables quick change. That relationship is foundational to power strategy.
SWOT's popularity lies in its simplicity. So does its failure. Personally, I have facilitated close to a hundred SWOT sessions. It was about seven years ago when I stopped with that. Apart form the little to no research that mostly goes into this 'flip chart' exercise, its focus on splitting an internal environment from an external one seemed flawed. We are moving into a world where internal and external boundaries are becoming increasingly blurred. Mostly the split is purely based on the company payroll. Yet, even during the reign of SWOT the split was not clear. Think about your companies Governing Board. Are they internal or external?
There is strong consensus among business science academia that the future organisation will be very much team based. Also, it is unlikely that the future employee will be bound to one organisation only. I work with organisations all over the world, and during my engagements with them, I am part of their teams, thus also part of them.
ROET stands for people Relationships, Opportunities, Efficiency, and Threats. It assumes that where we analyse the above, we can have a full understanding of the organisations current and desired realities. In so, we create a clear split between the receptive and projective parts of the Org. From there we can scientifically analyse and propose remedies. ROET can be quite complex or incredibly simple. In its simplest form, it is a conversation during a meeting. In a more complex way, it is a three-month intense analysis. This would consist of interviews, focus groups, questionnaires, documents investigations, etc. Mostly, the data received from ROET is much more accurate and usable than that received from a SWOT.
Firstly, I must admit that I was immediately in love when I first met BSC. I used it for a good three years or so, but as time passed, its flaws became clear. The balanced Scorecard holds the assumption that everything in the organisation must be translated from strategy. In so, the BSC claim is that operations follow strategy. From an orgtology perspective, this is an oversimplified view.
As mentioned, purpose and intent exist through a dual and inverse relationship. Purpose defines operations whilst intent drives strategy. Operations bakes the bread; whist strategy negotiates the need for that bread. In so, operations and strategy do not have a linear relationship. One does not follow the other. They co-exist.
Leaders must know that customers sponsor purpose. They do not care much about your intent. Therefore, Org exists because of purpose but survives through intent. The dilemma is that leaders face is that you cannot have much of both since both operations and strategy draw from the same resource pool. This means that when you increase resources for strategy, you decrease the ability of operations, and vice versa.
Therefore, orgtology differs from the Balanced Scorecard in the sense that orgtology can scientifically understand Org through its duality model. This is because we split the abstract side of Org from its algorithmic side. In this way we can develop specific metrics. The BSC's ability is limited in terms of such understanding.
The short of that is that operational risks affect the organisations' ability to deliver on its purpose. Strategic risks affect Org's ability to achieve its intent.
Orgtology clearly distinct operational from strategic risk. Operational risks threaten the processes, systems, and resources of Org. Strategic risks threaten Org's ability to change or to respond to change. In so, the amount of risk Org is willing to take to change is then also the strategic risk appetite of Org.
Of course, to identify, quantify, and rank risks requires specific knowledge and skill. Orgtology does this in the same way as most risk models do. Except that we identify risks in three areas, namely: resources, activity, and relationships. Also, we prefer to split the operational risk register from the strategic one since their permanence and treatments differ.
Cost in traditional structures originates within a department. This is not an accurate assessment of cost within the organisation for several reasons. Firstly, this system makes it hard to assess the necessity for the expense, and thus also the necessity of the department. Also, because the purpose of the department is by default deemed necessary, numerous expenses can be incurred that holds no relevance to organisational purpose or intent.
As with risk, the orgtology view is that cost is incurred through resources, activity, and relationships. Relationships are dynamic, thus difficult to trace. We can trace the cost of activity and resources quite accurately. Activity behaves in either a repetitive or a non-repetitive way. In other words, all activity happens in either a project or a process. Therefore, to accurately cost the resources and activity of Org, we must accurately cost its processes and projects.
As mentioned, orgtology studies the systems and dynamics of Org through the dual existence of purpose and intent. The former aims to efficiently repeat a known past whilst the latter aims to explore an unknown future. Humans must perform in both spheres, each holding a unique set of rules. To have one metric that aims to test results from systems that do not hold the same rules is like trying to make sense of rugby and soccer by watching both being played on the same field at the same time. It is an impossible task.
From an orgtology perspective, performance must be measured on three dimensions.
These dimensions all have unique metrics. Also, they combine different perspectives. E.g., efficiency can be precisely measured. It needs no human intervention to create a score. Effect needs a combination between objective and subjective scoring. But for behaviour there is no objective way to score. This seems al overly complex, but in practice it is not. I have created many simple scorecards for this. Those who are scored or who do the scoring should have a simple interface. The calculation specifics should always be a background operation.
From an Orgtologist perspective, any organisation runs on three primary constructs. They the process-, project-, and relationship- constructs. The process construct runs the concrete and algorithmic part of Org. The project construct creates the change that Org needs. The relationship construct runs on inter- and intrapersonal reciprocity.
We work with relationships by relating proximity to benefit. In other words, how close must we be to who benefits us most? I.e., where proximity is close, but
These ratios should tell us how to approach and behave towards our stakeholders. In so we can also adjust and maintain our customer value proposition.
As machine learning, the internet of things, and block chain technology revolutionises the world, it becomes clear that humans and AI will soon have to collaborate in some way or another. Orgtology gives a framework that makes this collaboration a meaningful one. It will be hard for humans to compete with the processing speed and the process-innovation ability of AI. But it will be as hard for AI to compete with the random and abstract minds of humans. In many parts of the world experienced truck drivers now co-drive their trucks with an AI driven truck. This makes it safer for both the driver and the truck because each understands reality in a way in which the other cannot. This is the world in which the next generation leaders must function.
Next generation leaders must compete in an enormously different environment than the one in which their forefathers did. This will need skills beyond what any MBA currently offers. Orgtology was created in this new world for this new normal. To my mind, it offers the best next generational leadership skills there is to offer.
Read more on the Orgtology Certification Program (OCP). It offers a 12-month blended learning (online & tutor) program. Its four modules cover orgtology theory; organisational design; strategy development; and executive leadership.
Thank you for reading and please leave your comments below. I would be happy to respond.
The program is highly suitable for senior managers, directors, executives, and those who aim for senior positions within an organisation. The OCP has four parts. They are: orgtology theory, organisational design, strategy, management and leadership. This is an advanced program. To enroll, you must hold a bachelor's degree with three years of work experience. On completion, you can enroll as an Orgtologist with the International Orgtology Institute (IOI).
© Derek Hendrikz: 2021-06-09