On three ways of working

I am reading Gerard Fairtlough’s book, The three ways of getting things done.

The book examines three forms of workplace environment:

1) Hierarchy – the traditional organisational form of power relations in which there is a distinct progression of roles and powers from top to bottom. Hierarchies are usually inflexible, discourage learning and communication, and inhibit change. Hierarchies have been the dominant form of organisational context for so long they have become the accepted organisational orthodoxy, irrespective of the outcomes.

2) Heterarchy – the notion of multiple rule, defined as “a balance of powers rather than the single rule of hierarchy”. Examples of organisations in this form include professional partnership firms, inter-organisational departmental relationships, external strategic alliances, and organisational networks.

3) Responsible autonomy – where “a group decides what to do, but is accountable for the outcome” – accountability being the key here. Examples include workplaces where teams work together on products and services and where the outcome is based on performance and, often, profitability. One example would be an investment team investing on behalf of a particular equities fund and the outcome would be the return on investment, perhaps relative to the market or some other benchmark.

The book examines the three different forms, individually and in combination. The author tends to favour heterarchy and responsible autonomy, and I would agree based on my personal experience.

By effectively leveraging the human and social capital of an organisation, where much of an organisation’s competitive advantage resides, the organisation is better equipped to respond with agility to the changing internal and external environment, as well as enabling new ideas and knowledge to grow and flourish for improved organisational outcomes.

And in a competitive world where much of the codified knowledge is ubiquitous and commoditised, the individual knowledge and people networks of employees within the organisation form the basis of real competitive intelligence and competitive advantage. Knowledge management certainly has a role to play here.

Which organisational workplace environment would you prefer?

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3 responses to “On three ways of working

  1. I’d be interested in your thoughts about where you think many of the well known companies fit in.

    I also think that some of these companies might have one type of environment on a corporate basis but be different on a division or department basis.

    Also which styles do you think are the most innovative, willing to take risks, agile and most profitable.

  2. Steve,

    Thanks for your thoughts.

    I think that hierarchical organisations limit their potential to grow and adapt to changing circumstances. A command structure enforces rigidity and conformity which inhibits new ideas and innovative solutions. Hierarchies are structurally inefficient due to a highly processed flow of information along a power continuum that does not represent the needs of the organisation.

    Conversely, open organisations, are more suited to knowledge flow and knowledge creation. They are also more responsive to the needs of knowledge workers, especially the Gen Y and Gen X brigade. Open organisations generally prefer networked solutions that are more efficient and more responsive to organisational needs.

    On the basis of this, in my opinion and that of a range of authors on the subject (see for example, “Open Business Models” by Henry Chesbrough), organisations that are less hierarchical offer greater scope to maximise the intellectual and social capital of their business.

    As to lists, Chesbrough offers examples that might interest you. Innovative and open companies would include Google, HP, and perhaps Shell (from what I hear). The US intelligence/spying agencies would showcase (perhaps until recently) how a hierarchical organisation fails to address key organisational outcomes – military and risk assessments for example- due to the command and control structure that favours pandering to the top of the hierarchy.

  3. I’ve found that companies like GE, IBM, Disney are very much hierachical. I’d probably add most of the larger financial and insurance companies to that.

    There’s also another model that looks at four quadrants. I won’t go into it. But one of the quadrants is more like a church, with “true belivers” I think you might put something like Apple and Harley Davidson in that category. In fact, I think Google might be like that as well. They seem to be on a mission. Maybe Ben and Jerry’s Ice Cream.

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