Michael Hammer states that, “Most companies today – no matter what business they are in, how technologically sophisticated their product or service, or what their national origin – can trace their work styles and organizational roots back to the prototypical pin factory that Adam Smith described in The Wealth of Nations, published in 1776.” This new way of working was based on the principle of dividing an enterprise-wide business process of making pins into specialized workers who each performed a single step in the pin-making process. This kind of division of labor (fragmentation of work) into separate tasks increased the productivity of pin makers by a factor of hundreds. Over time, work was broken into smaller and smaller pieces, with groups of people who performed similar functions. Not surprisingly, workers who were successful at performing a given function were natural drawn to these tasks because they had the skills, preferences, and natural talents needed to perform that kind of work. The success created by Adam Smith’s insight powerfully shaped and reinforced this way of doing work in companies, and the roles of individual workers in accomplishing that work. Functional groupings have become collective ways of working that form the organizational design in most modern corporations. In fact, the practice of designing organizations around similar functions has been so engrained into our global culture that most people have never worked in an organization that wasn’t structured around functions. Consequently, many managers and staff members mistakenly believe that organizational structure and organizational functions are synonymous – but they’re not.
An organization is a structure for grouping people and other resources to achieve a common purpose, goals, and objectives. A function is a field (a discipline or kind of work) that involves similar professional skills and tools. These functions are often concentrated into departments, e.g. the Research and Development department (R&D), Marketing and Sales (M&S), Production (Prod), Business Services (BS), and the Shipping and Receiving departments (S&R). These are pejoratively called, “functional silos” – vertically oriented structures through which business processes flow horizontally. Organizational functions have their own vocabulary and acronyms and often work-group members view themselves as members of that sub-group, not part of the overall organization, e.g. “I’m in the Accounting or Sales Department.” In some extreme cases, lines of communication between these different functions break down and people squander enormous amounts of time and energy on toxic interpersonal or inter-departmental conflicts rather than doing productive work. Over time, “we versus they” thinking solidifies as one organization optimizes its own performance at the expense of other functions and ultimately the overall organization.
Our modern concept of how work is done in 21st Century corporations is the result of: a) grouping similar kinds of work, professional skills, tools and disciplinary paradigms, and b) populating them with people that have similar cognitive preferences, work styles, interests, talents, and personality types. After more than 200 years, organizational functions have solidified into well-defined generic cultural norms that represent four different (contradictory) philosophies for how to accomplish work and to improve organizational performance. They are called the Four Ways of Working(TM) which are defined below.
Type 1: Production (What Things Get Done)
Type 1 (Production) focuses on execution and what gets done in an organization. When an organization manifests the Type 1 (Production) way of working, they believe that decisive actions, practical solutions to problems, and a short-term focus on clear, tangible goals will result in improved performance. They have a take-charge attitude, are forceful and direct in getting things done, making decisions and get directly involved in day-to-day operations, focusing on implementing the organization’s goals and objectives through the teams and individuals in organizational units. They exhibit the following characteristics:
- Top managers can make tough choices and have the determination and resolve to persevere in achieving the organization’s goals and objectives, even in the face of challenges and obstacles.
- The number of approvals needed to make decisions is kept to a minimum to expedite the decision-making process and the number of managerial layers has been purposefully designed to achieve the organization’s goals and objectives.
- Decisions have a bias toward action and producing practical solutions (issues don’t get “studied to death”), meetings are action-oriented and result in task assignments, due dates, milestones, deliverables, and follow-up. Managers only support decisions that implement or accelerate achieving the goals and objectives outlined in the organization’s strategic plan.
- Work assignments and goals are clearly defined and communicated (milestones and deliverables are understood), lines of authority for reporting and decision-making are clearly defined and focus on achieving results. Roles, responsibilities, and authorities are clearly defined to eliminate confusion about who does what.
- The communication style is open and direct (people go directly to others to discuss problems, rather than involving others and feeding the “grapevine”) and all employees are free to present the unvarnished truth about organizational matters without fear of retribution.
Type 2: Connection (Why Things Get Done)
Type 2 (Connection) focuses on teambuilding and why things get done in an organization. When an organization manifests the Type 2 (Connection) way of working, they believe that attunement to the external environment, innovation and radical change, exploring options and new ideas, and engaging with and influencing people to work together and collaborate will result in improved performance. They build alliances and cultivate relationships with people outside the organization (the public, interest groups, unions, media, and government agencies) and inside the organization where managers and staff members are encouraged to align their efforts with the organizational structures and systems in order to achieve the organization’s purpose, goals, and objectives. They exhibit the following characteristics:
- Top managers build a broad consensus and commitment among managers and key personnel around the overall direction and goals defined in the strategic plan, and they can clearly communicate the organization’s purpose, goals, objectives, and core values to people inside and outside the organization.
- The focus is on anticipating and acting on changes from the external environment (sometimes even before the details of a situation are fully understood), experimenting with multiple strategies and lines of action to anticipate changes in the external environment, then letting the results determine which is the best alternative. This data and information are used to identify new products and services that will meet the changing needs and demands of customers in new (or existing) market segments.
- Managers use regular operations meetings and periodic events to build group identity (annual planning, team-building sessions, retreats, holiday gatherings, etc.), but managers and staff members still see themselves as part of the whole organization, not members of a specific department or sub-group. Consequently, they communicate and cooperate with other departments and functional units so that key information is shared (e.g. the left hand knows what the right one is doing).
- People are energized by radical change that results from interacting with customers and the external environment and they believe that innovation and creative approaches to identifying and solving problems will enable the organization to achieve (or exceed) its goals and objectives.
Type 3: Direction (How Things Get Done)
Type 3 (Direction) focuses on leadership and how (that) things get done in an organization. When an organization manifests the Type 3 (Direction) way of working, they believe that defining a long-term direction, with strategic plans, goals and objectives, and creating and maintaining order and efficiency through structures and systems will result in improved performance. Using a quantitative, data-driven, analytical approach to performance, the organization’s strategic goals are deployed and monitored through operations plans, goals, and budgets that direct the week-to-week and month-to-month operations of teams and individuals in organizational units to ensure that those goals and objectives are achieved. They exhibit the following characteristics:
- Top managers have set a clear direction for achieving the organization’s mission and purpose and this institution-wide planning process is codified into a written strategic plan that defines the organization’s goals and objectives. They use a balanced array of “vital few” performance measures (summary data) to monitor the organization’s progress toward achieving its goals and objectives.
- High-level policies are aligned with (and support) achieving the strategic goals and objectives and these policies send a consistent set of signals that reinforce the desired behaviors. They encourage the desired behaviors and discourage actions and interactions that frustrate and undermine the organization’s core values and its ability to achieve its goals and objectives.
- Managers use strategic goals, along with organizational unit plans, goals, and budgets to direct their week-to-week and month-to-month operations. They use fact-based decision-making with quantitative data and scientific analytics, not just business experience and intuition. They only budget for, and commit resources to, things that help them achieve the organization’s goals and objectives and are consistent with the organizations values.
- Regular operations reviews of goals, objectives and budgets are conducted to keep the outputs of business processes and projects on track. In addition, the performance of business processes is regularly analyzed to eliminate unnecessary steps and tasks that negatively impact achieving the organizations goals and objectives.
- The organizational structure allows the right people to work together on the right tasks to achieve the organization’s goals and objectives, and the lateral working relationships and lines of authority between organizational units are defined, e.g. who can say no to whom and under what circumstances.
Type 4: Integration (Who Gets Things Done)
Type 4 (Integration) focuses on analysis and who gets things done in the organization. When an organization manifests the Type 4 (Integration) way of working, they believe that building the organization’s knowledge-base and capabilities, attracting top talent and supporting and encouraging individual contributors, and analyzing how concepts, ideas, and underlying organizational patterns relate to each other will result in improved performance. They help achieve the organization’s goals and objectives through inner vision, inspiration, and by integrating the knowledge-base and competencies of human performers with the organization’s structures and systems to get the desired results. They exhibit the following characteristics:
- Top managers are competent to lead the organization and have a deep commitment to building the organization’s knowledge-base, capabilities, and professional standards as well as understanding how the organization’s structures, systems, culture, and human performers relate to (and integrate with) each other as an interdependent, organic whole.
- People analyze the root causes of organizational performance in the structures, systems, and culture and don’t blame individual employees for organizational performance problems. They analyze and question the reasoning, assumptions, and attitudes that motivate the organization’s decisions (the problem-solving process is a matter of public scrutiny).
- People understand how their individual work assignments and goals contribute to achieving the organization’s goals, as well as the way that their day-to-day decisions relate to (and impact) the organization’s overall performance. They discourage “we versus they” thinking, so one department or functional unit’s performance is not optimized at the expense of others, e.g. they see themselves as working toward common goals and a common purpose.
- People use their history and culture (stories, heroes, traditions) as a rationale that helps employees identify with the organization’s purpose and core values, and to teach new and existing employees how problems should (and should not) be handled.
- Managers have a comprehensive method for mapping out the organization’s current and future talent needs, identifying and attracting top talent, and for mentoring key personnel using an effective succession management process. They encourage people look for new, cutting-edge knowledge to add value to the organization (to read widely, participate in professional societies, etc.) and they ensure that people are assigned work that they have the knowledge, skills, and problem-solving abilities to perform successfully.
While the exact combination of the Four Ways of Working(TM) within a specific organizational function is determined largely by the cultural norms within the organization, the list below shows some typical combinations found in companies.
- Sales (1234)
- Marketing (1234)
- Production (1234)
- Engineering (1234)
- R&D (1234)
- Accounting (1234)
- Finance (1234)
- Legal (1234)
- Personnel (1234)
- Human Resource Development (1234)
Every organization and its work-groups have all Four Ways of Working(TM), but they often manifest themselves hierarchically as a dominant, auxiliary, tertiary, and fourth preference for how work is performed and how performance is improved. Functional units in organizations almost always have a stronger preference for one (or possibly two) of the Four Ways of Working(TM) and rarely does an organization have an equally strong preference for them all. For example, if an organization’s culture has a dominant Type 1 (Production) and auxiliary Type 3 (Direction) way of working, leaders, managers, and staff members will tend to use these two ways of working almost exclusively when solving problems. The less developed ways of working almost always exist somewhere in the organization, but they are eclipsed from the day-to-day reality of operations and are either undeveloped or not seen as viable ways of working. In some organizational functions, they are marginalized, dismissed, demonized, and consciously repressed – pushed far below the surface of organizational consciousness, so that even the thought of using them as a valid approach to solving problems becomes undiscussible.
For example, if a new employee were to be hired into a company that was dominated by Type 1 Production and Type 3 Direction from an organization that was dominated by Type 2 Connection and Type 4 (Integration) and suggest that their new organization use this way of working to solve a critical problem, it would probably be viewed as a “pie-in-the-sky” approach that is out of place in the hard-hitting, analytical culture of that organization. So through body language (rolling eyes) and sarcastic comments (we’ve already got that covered) the new employee quickly learns from more culturally “savvy” members of the organization – “that’s not how we do things around here.” If the new employee continues to press the issue, organizational defense mechanisms will begin to arise to protect the status quo of the Type 1 and Type 3 ways of working, and people will shake their heads and begin to wonder if they’d made a hiring mistake.
Ideally, a work-group or functional unit should be adaptable enough to refocus their preferences from one combination of the four ways to another depending on the forces and pressures from the business environment and internal pressures and demands. But most times this does not happen because in many organizational functions, the Four Ways of Working(TM) reach a state of equilibrium that tends to be imbalanced in one direction, often at the expense of other seemingly contradictory (but much needed) work practices and beliefs. In other words, they come to “see” some ways of working as more reliable or effective then others and then they dismiss other ways of accomplishing goals and improving performance. As Maslow said, “He who is good with a hammer thinks everything is a nail.”
Bottom Line: The key to becoming an Island of Excellence® is for an organization to have the ability to move seamlessly between all Four Ways of Working(TM) as the external forces and pressures of the business environment and the internal demands of day-to-day operations morph to meet the frenetic pace of change and shifting customer requirements in a global economy.