Imaginization

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Provocative Ideas:
Images and Metaphors

Six Models of Organization

(An excerpt from Imaginization: The Art of Creative Management )

"The Gulf" is very common in what I call "Model 3" organizations. These are
organizations that, like Stereotype (a case study discussed in Imaginization: The Art of
Creative Management), get stuck in their attempts to change because they are caught by
the old bureaucratic forces they are attempting to shake off. I have developed the "Model
3" concept as one of six models of organization designed to characterize organizational
forms suited to different degrees of environmental change, and illustrate the difficulties
that can be encountered in trying to shift from one form of organization to another.

The six templates provide rough models against which people can identify the
characteristics of their own organizations or organizational subunits and understand the
generic nature of their particular difficulties in managing organizational change. As in the
case of "The Gulf," the realization that the problems being faced are "not just ours" can
have a liberating effect, depersonalizing the immediate context of the problem to create
an opportunity for new dialogue, understanding, and action.

Model 1 is the classical bureaucracy, carefully blueprinted into functional

departments, run from the top by the chief executive through various
structures, rules, regulations, job descriptions and controls. It is designed to
work like a machine, and operates very efficiently - so long as nothing
changes!

Bureaucracies, like machines, operate well when there are stable functions to be
performed, especially when they can be broken down into a series of separate operations
coordinated from the top. But when an organization's tasks keep changing, it's a different
story. The changes create a host of problems that no one is mandated to solve.

The problems thus work their way up the hierarchy, and eventually fall on the chief-
executive's desk. He or she soon gets overloaded, and initiates a shift to Model 2 by
appointing a top management team. Collectively, they now deal with the problems,
leaving the bureaucratic machine below (ie. the functional departments) to continue with
the routine work.

Model 2 works reasonably well for dealing with moderate amounts of

change. But if the pace heats up, the top team gets overloaded, with a
host of operational and strategic decisions demanding attention at team
meetings. Gradually, or as a result of a specific organizational redesign,
Model 2 thus gets pushed towards Model 3. Interdepartmental
committees or project-teams are established within the body of the
organization itself. The idea is that routine work will still be conducted through
departmental hierarchies, with special problems or projects being delegated to the
project-teams for investigation and the development of appropriate action plans.

This initiative, often heralded as a move to a "project organization," makes life bearable
at the top again, since a lot of work can now be delegated. But because the teams are set
within the context of a bureaucratic structure, they often fail to take off. There are a lot of
projects and a lot of meetings. But there are also a lot of spinning wheels. The team
meetings, as in Stereotype, become ritualistic. Team members are usually representatives
of their departments. As such, they have dual loyalties - to their departmental bosses, and
to their team. But since real power over day-to-day activities and career progress rests
with the departmental heads, the teams themselves do not develop any real clout.
Members usually "sit in" on team department's point of view. If problems arise in the
meeting, decisions are usually delayed until representatives have had a chance to "report
back" and test departmental reactions. If the issue is truly controversial, it ends up getting
passed to the top team, so that departmental heads can resolve it for themselves.

Model 3 is thus an organization characterized by pseudo teams that are

only capable of dealing with relatively minor issues. In effect, Model 2
still rules.

All three of these models are evident in Stereotype, which, in effect has
shifted through Models 1, 2 and 3. It has many of the problems
described above. The powerlessness and cynical culture that has
developed in the project teams is generic - shared by countless other organizations caught
in the same bureaucratic trap. The structure of the organization has changed, but the
culture and politics are still firmly set in the old mould.

Organizations can often make successful transitions from Models 1 or 2, to Model 3. But
Model 3 is only effective when the issues delegated to the teams are small in number,
require consultation rather than action, and allow generous time-frames for producing
results. We are back to the contingency view of organization and management discussed
in relation to Stereotype. To be effective, organizations need to structure themselves
through models that are appropriate for dealing with the external challenges being faced.
If the quest, as in Stereotype, is to create an organizational structure that is driven and
enlivened from the middle by flexible, aggressive, innovative teams, the results of Model
3 are almost always disappointing.
In my research I encounter frustrated "Model 3" organizations time and again. Like
Stereotype, they think or hope that they're unleashing the potential of a dynamic team-
based approach to work, but in effect, they are usually just involving middle managers in
time-consuming processes of interdepartmental consultation. Dynamism and team-based
energy in the middle is only created against the odds, by groups of managers who are so
committed to their team's overall goals that they take great personal risks to advance their
cause.

To achieve the flexible, innovative, committed organization that is needed to deal with
the turbulence and change found in the modern environment, organizations have to get
beyond Model 3. This is where Models 4, 5 and 6, come in, especially Models 5 and 6.

Model 4, the matrix organization, is a hybrid bureaucratic form. It's

special character rests in the fact that it has decided to give more or less
equal priority to functional departments such as finance, administration,
marketing, sales, production, and R & D, (the columns of the matrix) and
to various business or product areas (the rows). Thus people working in
various product or business teams within the organization have a dual
focus. They must work with two perspectives in mind, combining
functional skills and resources with an orientation driven by the key tasks they have been
assigned. The dual orientation means that bureaucratic power typical of Models 1, 2 and
3 is diluted, since the heads of major projects, or groups of projects can be as important
and as powerful as heads of traditional functional departments. In this way, members of
project-teams are not necessarily pulled back into the traditional lines of responsibility.
Since project heads may have a large influence on rewards and future career paths, real
team commitment can develop. In successful examples of Model 4, the project-teams
become the driving force behind innovation, providing an ability for the organization to
change and adapt along with challenges emerging from the environment.

The same is true of Model 5. This model, typical of small and

medium-sized organizations that are highly innovative, is built
around teams. The influence of functional departments is minimized.
People are appointed to work on specific projects. One or two
projects may command most of a person's energy at a particular
time, but he or she may also be contributing to others. As the work
on one project-team winds down, commitments on other teams
increase. Career progress in this type of organization rests in moving from one project to
another.

This kind of organization is ideally suited for dealing with the challenges of rapid change.
Unlike the matrix of Model 4, it does not have a heavy functional structure to carry along.
It's focus is teamwork, innovation, and successful initiatives, completed in a profitable,
timely fashion. Functional departments, insofar as they exist, are support departments,
committed to enhancing the work of the teams, who are their clients. The whole operation
is controlled by the management team at the centre. It focuses on strategic thrust, defining
operational parameters, marshalling and channelling resources, monitoring results, and
facilitating the general management of the system as a whole. The teams may be
managed through "umbilical cords" characteristic of the spider plant model discussed in
Chapter 2.

The organization is much more like a fluid network of interaction than a bureaucratic
structure. The teams are powerful, exciting and dynamic entities. There is frequent cross-
fertilization of ideas, and a regular exchange of information, especially between team
leaders and the senior management group. Much effort is devoted to creating shared
appreciations and understandings of the nature of the organization and its mission, but
always within a context that encourages an open, evolving, learning-oriented approach to
business. The organization is constantly trying to find and create the new initiatives,
ideas, systems and processes that will contribute to its success. It is a kind of adhocracy,
finding and developing its form as it goes along.

This is the kind of organization that Stereotype, at least in part, may need to become to
meet the challenge of its local environment. Unfortunately, it is stuck inappropriately in
Model 3.

Model 6 provides another example of an organizational style ideal

for conditions requiring flexibility, innovation and change. In a way
it's a non-organization in the sense that it does not exist as a physical
entity. It's a subcontracting network where the team at the centre
steers the whole enterprise.

Take the fashion industry, where Model 6 networks flourish as ideal

means of dealing with the rapid pace of change. The team at the centre of the network has
come together to exploit a market niche. Rather than build "an organization," it decides to
subcontract almost everything: detailed design, manufacturing, marketing, distribution,
communications. The "satellites" are the subcontracting firms. They are linked to the
centre through specific contracts which come and go. Membership of the network is in
constant flux. The team at the centre is the only point of continuity. It directs strategy,
tactics, and resource flows, keeping lean, minimizing overhead, operating with maximum
flexibility. No planning department. No MIS. No HRD department. Everything
contracted out, even routine finance! It often operates on "spider plant principles,"
discussed in Chapter 2.

These six templates, which I have presented as simplified models of a total organization,
often exist in mixed forms. They provide an evocative means of helping members of an
organization see which model or models they are currently employing, and can help them
judge what's possible or ideal in terms of organizing for flexibility and innovation.
To illustrate, consider their application to Stereotype. The models provide a powerful
way of helping Stereotype's Management Team understand why the project-teams in its
Model 3 organization are not "cutting loose" and being truly innovative. They can help
them to understand "The Gulf" that often arises between the top and middle levels of an
organization from a new perspective, and to see that if they truly want to create a more
flexible, innovative organization perhaps they should be thinking about Models 4, 5, and
6 rather than just pushing for more team training within a Model 3 structure. For
example, they could find a way of shifting closer to Model 4 by elevating the priority of
key projects, and changing the composition and orientation of the Management Team to
reflect this. Or they could choose to launch Model 5 or Model 6 initiatives in special
areas of the organization, or for special projects, as illustrated above. In doing so, they
may be able to introduce a new potential for entrepreneurship and innovation in specific
pockets of the organization, while still meeting the constraints set by HQ. An awareness
of the six models, and an ability to see and name precisely what is wrong with the current
situation, could provide a powerful lever for change.

Used and interpreted flexibly, I find that these rough and ready templates can have a
powerful effect. They can provide the all-important "mirror" that allows people to see
where their organization is, and where it could be.