Blog, Pitang.

Esko Kilpi passed away recently (January 2020), and he was the founder of a Finnish consulting firm working specifically with the challenges of knowledge work and environments where work is digital. Esko said:

“We want to be agile and resilient, we also want to learn effectively and quickly. The tension of our time is that we want our companies to be flexible and creative, but we only know how to treat them as systems of boxes with a limited number of arrows between them.”

In other words, all this apparatus and great ideas to achieve Organizational and Business Agility will not really be useful if used with the same line of thinking that dominated the creation and triumph of companies in the industrial society.

Peter Drucker, in his article Knowledge-worker Productivity - The Biggest Challenge, explains that knowledge workers are those whose primary capital is knowledge. 

He defines 6 factors for knowledge-worker productivity:

1. Demands that we ask the question: "What is the task?" 
    

2. Demands that we impose the responsibility for their productivity on the individual knowledge workers themselves. Knowledge workers have to manage themselves. 
    

3. Continuing innovation has to be part of the work, the task, and the responsibility of knowledge workers. 
    

4. Knowledge work requires continuous learning on the part of the knowledge worker, but equally continuous teaching on the part of the knowledge worker.
    

5. Productivity of the knowledge worker is not—at least not primarily—a matter of the quantity of output. Quality is at least as important. 
    

6. Finally, knowledge-worker productivity requires that the knowledge worker is both seen and treated as an "asset" rather than a "cost." It requires that knowledge workers want to work for the organization in preference to all other opportunities.

Exploration and Exploitation

Jurgen Appelo, the author of Management 3.0, questions whether Creative Worker wouldn't be a better term. With the advent of the Creative Economy, we have one certainty: creative professionals should not be managed with a command & control mindset. 

The main criticism is not regarding the format itself, which works well in organizations such as the armed forces, for example, but its indiscriminate application in a VUCA context. 

Jens Maier, in his book The Ambidextrous Organization, explores the concepts of exploration and exploitation, which, in my free translation, I call Discovery and Exploitation. To find the gold mine, you invest time and effort in prospecting; you venture into unknown territories, often without minimal infrastructure, and experience blood, sweat, and (why not) tears. All this investment is justified because the GOLD, if discovered, can not only recover the investment, but bring abundant profitability. 

This search is what we call exploration: the search for innovation, for the competitive edge, for the VALUE that will propel us toward the future. The gold mine, once discovered, unlocks the resource extraction process. This extraction is what we call exploitation: we build a system of tracks, roads, infrastructure—in other words, whatever is needed to optimize and increase profitability on the gold found. 

What Maier explains to us is that organizations that manage to combine innovation and exploitation (exploration and exploitation, respectively) are more likely to be successful.

Hierarchies and Networks

Thus, we have two organizational macrostructures: hierarchy and networks. 

Hierarchies are good for exploitation, efficiency, optimization, specialization, and deepening the knowledge needed to maximize results with available resources. It is process, procedure, policies. 

In "Gamestorming: A Playbook for Innovators, Rulebreakers, and Changemakers", by Dave Gray, Sunni Brown, James Macanufo, we are introduced to the concept of the Business Process: which creates a solid and safe chain of cause and effect. There is a very close integration of several processes and a structure with many dependencies. If every step is followed precisely and nothing changes, the goal will be reached predictably and reliably every time. Here, the management challenge is precision, accuracy, and consistency.

But there is another side that the authors call Gamestorming, which does not create a chain, but rather a framework for exploration, experimentation, and trial and error. The path to the goal is not clear, and the goal may, in fact, change, both on a micro and macro scale. Since the goal cannot be determined with precision in advance, a project must proceed based on intuition, hypotheses, and hunches. For the authors, this is managing creative work. And networks are better equipped to handle creative work: they foster generalization, effectiveness, decentralization, and exploration. 

Organizations need proficiency in both, but the historical emphasis has been on hierarchy and business processes. 

This has created rigid organizations that are poorly adaptable to change, which is the only certainty we have in business environments. In the past, changes took a long time, whereas today, due to technology, they are instantaneous. 

VUCA (volatility, uncertainty, complexity, and ambiguity) is Gamestorming

Stop and look around you: what do you observe more? Stability, tightly aligned planning and execution, slow and controllable change? Or instability, low assertiveness in plans, and a torrent of changes occurring at a speed that is hard to keep up with? In my professional experience, I observe the latter more.

However, this does not allow me to forget that a part of my organization has processes that are like the first option. For them, let us apply the most classic management possible, in all its glory. But it is not the only one, nor the definitive one. For different contexts, we need different solutions, flexibility, and adaptability to succeed. And we know it. 

Look at the organizational areas known as R&D (Research & Development) or Innovation; do they operate like the rest of the company? Of course not. They are usually "fishbowls" where everything is different, relaxed, informal, conducive to collaboration, brainstorming, and experimenting with new ideas. 

The proposal here is for us to understand that this cannot be restricted to just one area; it must be spread throughout the entire organization.