Holocracy introduced me to the idea of a corporate operating system. At the time I thought it was an interesting way of thinking about how an organisation works, but was more intrigued by Holocracy itself.
As I have continued to think about more flexible organisations, the operating system metaphor has come back to my mind.
The way I see the levels of the corporate operating system stack are, from bottom to top:
The BIOS (Basic Input/Output System) is the layer of software which interacts with the computer’s hardware. It allows the operating system to be independent of the hardware, by providing a translation service of the operating system commands into hardware specific actions. If you change the hardware, you may need to change the BIOS, but not the operating system.
This is the fundamental level of the organisation, the foundation on which all else is built. There are two main parts:
These two parts state what the business is about and how it plugs into the wider world. As the organisation adapts over time, these are the ‘true north’ of rarely changing beliefs and needs.
A key operational decision to make here is the level of distribution of decision making. In an earlier [blog post] I introduced the idea of levels of adaptiveness. There is no single organisational form that is ‘Adaptive’, it is a decision about how flexible you need to be, can be and want to be. A big part of enabling increasing adaptiveness is moving decision making to where it is needed. That is a conscious decision that is critical in the shaping of the organisation.
This is the system software which controls and manages the computer hardware and software resources, providing a common platform for the user programs.
This is level at which the basics of how we will come together to realise the purpose. Factors at this level include:
These common rules provide an organisational vocabulary and set of concepts which enable people from across the organisation to work together effectively.
The level of adaptiveness desired drives many of the decisions at this level, as we need to balance the question of scale versus flexibility. The more we optimise for scale the more centralised the organisation will be, the more we optimise for flex the more decentralised the organisation will be.
This is how we realise and tailor the functions of the Operating System to deliver various functionality of value for the user. The user usually has a number of options of software to use to achieve the value; for instance there are a number of email applications to choose from. They enable the same fundamental value to be obtained, but may have slightly different ways to deliver it. It is up to the user to chose which one works best for them.
Not only may different parts of the organisation need differing levels of adaptiveness, but they may need to be able to adjust how they realise the functions of the operating model. For instance, the recruitment process for one skill set, may differ from those needed for other skill sets.
Things like incentives and career paths may also differ, as may the IT systems and physical environments.
The operating model provides the common services and ensures that the organisational components can align and communicate, allowing for local tailoring at the user level.
User of software are typically considered to be the end users, the customers. But the people within the companies which produce the software are also users of software. Users can occur at various levels.
Users of the organisational ‘software’ are the employees, and customers, of the organisation. There are endless books covering customer experience, but far fewer covering employee experience.
We want to provide a great user experience so that customers keep returning and spread the word. We should provide a great employee experience so they want to creat great products, remain as part of the organisation and help bring others onboard.
Adaptive organisations consciously consider the employee view as they recognise that they are critical parts of the organisation - it relies on their knowledge, skills and decisions to be successful.
One of the questions that gets asked a lot about Adaptive organisations is “If decision making is distributed, what do the senior leadership do?”. It’s a good question, and there are many aspects to the answer, but in this context the senior leadership own the BIOS and ensure that the Operating System is effective and changes as needed.
For founders this will come more naturally as they have started an organisation for a reason, for a personal purpose and will have been intimately involved in the evolution of the Operating System.
As organisations grow and founders step aside, career managers take over the running of the organisation. Just as family firms rarely make it past three generations, all organisations change through these transitions, often for the worse. The problem is mindset alignment at the BIOS level.
For current mainstream organisations this is believed to be relatively straight forward as you just have to find someone who can optimise delivery of returns to shareholders. Even this has proved more problematic than assumed, so as we move into an environment where the BIOS is more nuanced (purpose, environmental, societal and doing the right thing in the right way considerations) this becomes much harder. The problem now is to find someone with an aligned mindset. For this reason succession planning is becoming increasingly important.
The operating system is also largely driven by the mindset of the leadership and will have senior leadership input, but will probably be put in place by senior specialists in the various areas of concern. The key thing is that the decisions at this level are framed by the BIOS. The specialists lay the foundations of the organisation that the leadership have envisaged.
The software/apps are local instantions of the operating system, so must be developed locally in alignment with the BIOS and within the structure of the operating model framework.
The users have a responsibility to provide feedback on the fitness for purpose of the resulting system, and to champion changes to it. The goal is to deliver the purpose captured in the BIOS in a way that resonates and enthuses the users. An organisation which does not listen to its internal and external users will haemorrhage customers or the skills needed to deliver product, or both.