What’s Your Organization FOR?

In trying to unpack my thinking on the role of management in an ideal organization, one thing I get stuck in a bit is the question of what an organization is _for_.

I’ll suggest that there are three possibilities to consider (and yes, all organizations combine all three to some extent – is the balance that’s interesting):

  • To deliver products and services that are seen by their customers to improve the world;

  • To deliver wealth and power to the owners and top managers of the organization;

  • To deliver comfort and security to all those the organization employs (directly or indirectly).

I’m going to suggest a kind of tension that exists between the first pole and the other two; and then between the second and third ones as well.

Let’s toss up some guardrails.

For #1, the assumption is that the time horizon is reasonably long – which means the externalities become at least somewhat priced in and running the business like Chainsaw Al Dunlap (burned down Sunbeam) is suboptimal.

For #2, again we’re looking at a reasonably long time horizon so Al Dunlap on one extreme and Ken Lay (burned down Enron) or Bernie Madoff (Ponzi scheme that burned down a ton of people) on the other don’t work well.

For #3, where British Leyland (the conglomerate the Labor government assembled to hold the jobs of the dying British car manufacturers) would be an example, we’re also looking at a long timeline so the ability to stay in operation kind of matters.

Because real life offers feedback in a shorter cycle, we don’t often run into these guardrails – but eventually we always do.

I’ll suggest that in bringing agility to organizations, we often say we’re intending to improve how they deliver value to the world, but often we do that by really improving the relative comfort and security of the non-executive employees.

And when we take that a step further and talk about “de-managing” organizations, a big part of what we’re talking about is lowering the differential of power and income between executive and non-executive employees.

…a note. In modern, public corporations there is another set of stakeholders in Wall Street. Galbraith discussed the split between the legal owners of the corporation and the ‘new class’ of managers, who often managed the corporation to their benefit – and not to the shareholders’.

(There’s more to discuss in looking at management, agility and Djilas’ invention of the concept of the “New Class,” but we’ll save that for another time.)

I think some of my own resistance to de-managing is my concern about institutions which have been essentially captured by their employees, and where employee well-being completely trumps value delivery (Hey, I actually owned a 1969 British car - I have direct experience here).

One thing I’m mulling over is the thread in contemporary politics driven by ‘critical theory’ – a mode of thought which argues that power relations are everywhere and works to highlight them and dissolve ones that are perceived as unjust. I wonder if we’re hearing an echo of that in the desire of many folks in the agile community to eliminate – not flatten – hierarchy, and to make relations within corporations voluntary.

So the question I’ll post is this:

Do we see all three positions as legitimate? If not, why not?

If we assume that we have to optimize across all three, how do we judge whether we’ve optimized well or not?

How is the optimization different for a:

  • Startup;

  • Large, mature corporation;

  • Public utility;

  • Government agency;

  • Nonprofit?