Making organisations work

by Isabel Wu

The decision I made to set up a company ten years ago did not entail much deliberation.  It was prompted by little more than not being able to think of a job I wanted to pursue in the work I thought I was good at.  The only thing that I spent time thinking about was the business name.  ‘Meta management’ is a management term that means the management of management to achieve overarching goals.  It is the opposite of ‘suboptimisation’, the process of achieving the goals of a division or component.  Even the most junior employee of any large organisation can tell you that optimised parts do not make up an optimised whole.  When each department has to achieve its own goals, it inevitably comes at a cost to the whole.

My experience was that most performance problems could be resolved through a systems thinking (very simply defined as “two or more parts that work together to accomplish a shared aim”) approach,  ‘Meta Management’ seemed to be the perfect name to describe my new venture.  All I needed to do was to find companies that wanted their problems solved from an organisational rather than divisional, individual or symptomatic perspective.

However, over the years I was increasingly disturbed by our (perhaps subconscious) response to what needs to be acknowledged as our lack of ability.  For all the brilliance of people like Peter Drucker, Henry Mintzberg, Warren Bennis, Rosabeth Moss Kanter and Michael Porter, and the simplicity with which their and others’ matrices, frameworks and models help us to lay out and figure out complex organisational problems, we at the ‘doing’ level, are lost  Knowing what we want to achieve is not translating into knowing how.

Not knowing how is a large part of the reason we persist in using programs and practices (such as these) that do not deliver as they claim, but look as though we are making a difference to the business bottom line.  Our choice has been to limit our focus so that we work in a narrowly defined version of the organisation rather than one that accurately encompasses the business and the people who work in it.  Although the central element of all businesses is financial we lack the understanding and the language of business and finance to quantify our contribution beyond the most basic.  As the Society for Human Resources noted in The Future of the HR Profession, “the only real metric HR has established to measure its work is cost-cutting.”  Unable to quantify the outcomes of our work, instead we quantify the people who do the work.  The shrinking of the definition of the organisation to one that does not include the business and people in holistic ways is evident by the fact that most positions that hold the word ‘organisational’ in their title do not work on the organisation at all.  At best they work on programs that are implemented across the organisation.

On paper, we are upping the company’s collective talent, we are improving productivity and we are increasing worker retention.  Except we aren’t really.  What we are really doing is finding more sophisticated ways to reduce down or remove the people who bring the results down, allowing the numbers to look better.  We turn people into job descriptions because we can produce metrics on skills and outputs.  We turn people into competencies because we can link them to key performance indicators.

If we are prepared to be measured at the humanity level – and considering we make our living from the efforts of people – we should be, it is clear that in failing add real, measurable and sustainable value to business we also fail in our other priority: people.  The figures on disengagement – where in workplaces across the world the engaged are outnumbered by the disengaged at a ratio of 2 to 1 – tell us this is true.  The fact that workers who spend the bulk of their working years with one employer are now disadvantaged as job seekers tells us this is true.  The fact that those who are most likely to be unable to find meaningful work that pays enough for a decent living are predictable, tells us this is true.  We are producing organisational results by shifting the problem to individuals and communities.

The things we cannot easily measure, such as the effect of work on self-esteem, the extent to which we feel valued, our sense of identity and sense of being in control, do not have to be factored in.  This would make it more difficult to produce positive ‘human capital’ results.  The best of our profession fight for organisational practices that support these anyway, but the majority leave the ‘soft’ side of management up to the line managers.  We add these as measures to their jobs, not ours.  The organisational specialists are not meta-managers but have become as suboptimised as any other division in the business.

None of this means that companies should not be able to make decisions that maximise their bottom line.  The question is whether we are actually achieving the maximum bottom line results possible.  Perhaps it is the best we can do under our present processes.  It is not unlike the argument for recycling.  The cost of recycling, including operating costs, chemical waste and pollutants has long been argued to outweigh the benefits.  An estimate in California put the cost difference at $28 per tonne to landfill waste compared to $147 per tonne to recycle.  However this estimate was in 1995.  New processes enabled by greater automation have since brought down the costs to process recyclable waste.  The waste is not ‘recycled’, rather it is ‘upcycled’.  The change in consumer attitudes makes turning waste into new products commercially viable.

We now need to take the same approach with the management of organisations.  Like recycling, we too need a new approach so that the cost of sustainable business and people practices are far outweighed by the benefits.  Having one set of measures for sustainable business and people performance would be a good place to start.  The people over at The Relationship Economy think that would look like this:

 

The answer is as simple as building a new model.  It does not make sense that the organisation can effectively serve the business without properly understanding business, so a new model needs to be one that incorporates the wisdom of those like Drucker who have envisaged how great the organisation can be, with the practical demands of the business.