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The Kinetic Organisation

The 21st Century alternative to hierarchical organisations


Have you ever wondered how traditional, hierarchical organisations actually work on a day to day basis given all the frustrations of working in them?

Well, earlier this year with the support of our sponsors Regus, AWA’s research team undertook a programme designed to investigate the inefficiencies of traditional organisations and design an organisation better suited to the needs of owners, citizens and society. We have called this the ‘The Kinetic Organisation’.

So what’s actually wrong with ‘traditional organisations’ ?

Layering – Layers of expensive managers act as communication and control nodes, translating, checking and sometimes ‘air brushing’ messages - all adding cost and slowing change.

Creativity - Well qualified middle managers demonstrate their ‘value’ by intellectualising decision-making.  They create work and through their desire to ‘protect’ the organisation, make innovation by others difficult.

Silos - Power, investment and resources are deployed in top down ‘divisional’ silos, creating a vertical and downward focus when many processes run across organisations. This makes working and processes sub-optimal.

Contracting for skills – Given economics and market changes, companies' offers of ‘evergreen’ employment contracts is unsustainable.  This leads to many broken promises, loss of knowledge and self-confidence.

Change – ‘Change’ is driven by the need for profitability and not the desire to make all processes and operations perpetually competitive, leading often to unemployment and broken promises.  

Offices and support services – Commitments to long term, inflexible office leases and support contracts are regarded by leaders as an inevitable cost of doing business, with little concern for business manoeuvrability.

Information Technology – IT is preoccupied with keeping core systems running and protecting the organisation from security risks and doesn't focus enough on personal productivity.

Legacy – ‘Live for today’ leaders focus on maximising profit ‘on their watch’.  This involvves making commitments that look cheap but which limit the manoeuvrability of the business for future generations of managers.

Risk – Every business/division with an organisation is treated the same regardless of its specific activities, risk profile and needs. Consequently units can be burdened by process and policy that make no sense.    

Time – Organisations don’t really understand what their people are spending time on or the cost of it: time is in effect treated as a ‘free’ resource.

Our conclusion….that the traditional organisation is no longer fit for purpose and that was universally the view of the 70 leaders that took part in the study.

A new model: The Kinetic Organisation

Using the combined input from our community of leaders (focus groups and surveys), our knowledge of the future through our 2020 Visions research programme, our experience of applying alternative models for work, place and organisation in large organisations and our intimate knowledge of running a ‘hierarchy-less’ organisation for nearly 20 years, we have defined ‘The Kinetic Organisation’.

From our study we first nailed down a set of ‘ 6 Fundamentals’ These are a set of organisational design requirements from which everything else flowed, as follows.

The Kinetic Organisation must:

  1. Allow the enterprise to ‘turn on a dime/sixpence’ changing without pain to adapt to new threats, opportunities and economic conditions.
  2. Be well placed to meet its promises to clients, shareholders and people.
  3. Maintain a flexible cost base and infrastructure so that it can ‘inflate’ and ‘deflate’ its operations without incurring penalty costs.
  4. Create a ‘safe’ environment in which people feel able to contribute and share their knowledge and innovation.  This includes constructively challenging the way things are done so as to achieve a better end.
  5. Constantly keep its products, services, people skills, capabilities, processes, infrastructure and costs under review to make sure every element of the business always remains fresh and competitive.
  6. Allow elements within each structure to be treated and structured in different ways depending on their risks, activities and the markets in which they operate.

The 20 Operating Principles of the Kinetic Organisation

We drew on lessons from sport, terrorism, academia and nature to build 20 Operating Principles.  These are the rules by which the Kinetic Organisation would operate in relation to Infrastructure, Cost-base, Structure, Leadership, People and Culture, Management Information, Environment and Risk.

Replacing hierarchy

In order to maintain order, you need to attain an alternative structure. In the Kinetic Organisation, a natural ‘molecular’ structure replaces command, control and hierarchy. A series of cells are linked together and effectively ‘loaded’ in free space to deliver the organisation’s outcomes.

A network of new roles ensures that each ‘structure’ in the organisation operates effectively to maintain its energy without diluting the organisation's inherent manoeuvrability.  This means that it can evolve with ease to meet the changing demands of its customer and labour markets.

Kinetic Organisation –The 10 roles:

Kinetic Organisation

Executives – The people who actually perform the acts of productive work.

Leaders – The people who lead groups of Executives to deliver a pre-determined outcome.

Owner – interested in long term well-being of the enterprise, sets direction and articulates the purpose and mission in language that people can engage with emotionally.

Wise owl – brings wisdom so that the organisation doesn’t re-learn old lessons.

Recruiter/Coach – recruits appropriately cultured and skilled people on contracts consistent with the organisation's ability to promise tenure, ‘places them’ within the structure, ‘owns’ them, and manages their skills development. People are on loan to the structure.

Agility Controller – makes sure that decisions and commitments made by individual cells do not impair the ‘agility’ of the enterprise in the long run.

Rule-maker/referee – Makes sure there is fair play between cells in line with the rules that have been developed for the effective running of the organism.

Connector – Pro-actively seeks to make links between cells for the benefit of the enterprise -sharing knowledge and making sure that effective interworking takes place.

Workplace infrastructure deliverer – provides all hard technology and soft infrastructure and training to help cells deliver their best performance.

Work loader – Acts on behalf of the owner to load the cells, adjudicates over conflicts in tasks, and monitors the quality of output as seen by the receiving cell.

How it works – Contrasting Traditional v Kinetic

We set out below how in practice the Kinetic Organisation would work by contrasting statements that we believe represent the typical way things are done in a ‘traditional’ organisation and how they would be done in a Kinetic Organisation.

Subject Traditional Kinetic
Infrastructure
Infrastructure Purpose Services to the workplace are delivered by disparate units (IT, Telecoms, HR, FM) that don’t really consider their primary purpose as helping people to do their best work.  The primary purpose of the workplace is to enable people to do their best work every day. HR, IT, Telecoms and FM work intimately together to design and deliver an effective workplace ‘experience’
Infrastructure Organisation Each of the infrastructure service organisations operate separately and deliver their services.  Infrastructure service organisations work as a unified team with a common purpose.
Work People come to the office every day, sit at the same desk and attempt to do all their work at ‘their desk’ People work when and where it is most appropriate for them, their colleagues and the function, working in different places and settins to suit their tasks and mood.
Strategic Workplace Planning Plans property portfolio based on what the business says it needs
We know that the business can’t be sure of its needs, so we plan our workplace portfolio on the basis that we will need to ‘inflate’ and ‘deflate’ our workplaces quickly and at no cost, based on a wide range of scenarios over the next 10 years.
The Office workplace The office is the primary place of work for everyone The office is the primary place for many, but for more it’s a place where you go to meet colleagues and work collaboratively
Contracting for space Takes long leases to get the cheapest deal. Limits fixed lease commitments in favour of flexibility to flex headcount up and down.
Serviced offices Uses serviced offices as tactical response when the company runs out of space, or needs temporary space for project teams Values their flexible office partner who provides serviced space at pre-arranged contract rates, when headcount goes up; and this enables the organisaiton to generate income from spacenot currently needed.
Structure
   Organisation is based on a command and control model. Organisation is based on networked cells and people have a number of specific projects and tasks that they undertake for their internal leader.
   Leaders are not in touch with what goes on on a day to day basis. Because there is little hierarchy governers are in touch with what is going on.
Technology
Focus The IT function focuses on our keeping our core transaction system running. The IT function sees itself as a key enabler in helpingeveryone do their best work and is constantly searching for new products and services that will help the business  
Implementation The IT function delivers technical solutions and expects users to be responsible for adoption. The IT function provides services to support adoption of new technologies and support people in changing behaviour.
Social Media The IT function worries about implementing Social Media because of cost, network capacity and information security. The IT function sees Social Media within the firewall as an important new development. It recognises that although there are risks that need to be managed, it’s important to provide these tools to help organisational effectiveness.
People
Focus People are resources that are recruited to do specific jobs. People are the only real resource the organisation has so it’s important to help those people be the best they can be and maximise every individual's ability to  contribute to the organisation. 
Recruitment Recruits people for specific jobs Recruits people who have energy, enthusiasm and talent so they can be developed to deliver great work.
Induction When you join the organisation you go through an induction programme and then are allocated to a line manager who ‘owns’ your development When you join the organisation you are immediately allocated a coach who ‘owns’ your development and through the course of your career is responsible for making you the best you can be.
Performance Management Performance is measured by presence and perception. Performance is measured by outcomes against regularly refreshed objectives.
Employment Most people are employed on 9-5 open ended ‘employment contracts’  that imply a long tenure  People are employed on a variety of contract types and workstyles which are set on a realistic basis in relation to tenure  so as not to make promises can't be kept.
Finance
Cost accounting Accounts for our costs by cost centres that link to departments and hierarchy  Tracks the cost of doing real things across our processes
Accounting for time Doesn't track the cost of our people time Systems automatically track the cost of people’s time so to make sure time (cost) is being deployed on the most valuable tasks.
Investment Allocates Capital budgets to individual units Allocates investment across processes to maximise the performance of the process
Internal Trading Doesn't have an internal trading mechanism because it is a bureaucratic overhead and it’s only ‘wooden dollars’ Has a flexible internal trading system that lets everyone understand the true cost of delivering products and services. 
Risk
  Treats all units the same in respect to risk. Adopts a different regime to manage risk within the different parts of the organisation, depending upon the nature of the work undertaken.

Conclusion

Over the coming years the developments in technology will eclipse anything we have seen to date.  This provides organisations with the opportunity to strip away hierarchy and deliver organisations that are more effective, energetic and efficient.

 The issue is a simple one. Which organisations will be brave enough to pioneer these new organisational models to provide confidence - and evidence - to less brave leaders to demonstrate that it is ‘safe’ to part company with the old, traditional ideas associated with the traditional organisation and move to new models?


 

Newton's Cradle illustrating Kinetic Organisation
  

kinetic [kɪˈnɛtɪk kaɪ-] adj - relating to, characterised by, or caused by motion

 

September 2012

 

About the Author

Andrew Mawson of AWA

Our guest author is Andrew Mawson, Managing Director and a founder of Advanced Workplace Associates (AWA), one of Europe’s leading Workplace Transition consultancies.

Following his training as a statistician and an early career in business strategy and change management in the IT industry, Andrew has become a leading specialist on work/workplace strategy and change management.  He has advised organisations including Merrill Lynch, Prudential, The Royal Bank of Scotland, The UK Home Office, Ernst & Young and Mintel on their work and workplace strategies.

Andrew has a strong appreciation of how the deployment of IT in the workplace can affect the mood, performance and strategic flexibility of an organisation.

Andrew led a number of research programs including: the Learning Building program 1991, the PC video revolution 2000, AWA’s 2020 visions program 2011. He is also a regular contributor to AWA’s Workplace Performance Innovation network.

In 2010 Andrew was awarded a Corenet Global Innovators award for his work with Workplace TV and is a regular speaker and writer on the link between organizational effectiveness, work and the workplace and the transition to the agile organization.
 

 

Further information

Follow this link to download the full Kinetic Organisation report.

If you’d like to assess how ‘Kinetic’ your organisation is today you can find out by spending 10 minutes undertaking the Kinetic Challenge at www.reguskinetic.com

To find out more about Advanced Workplace Associates, check out thier website at www.advanced-workplace.com

 

 

"The Kinetic Organisation must maintain
a flexible cost base and infrastructure
so that it can ‘inflate’ and ‘deflate’
its operations without
 incurring penalty costs"

 

 

 

 

 

 

 

 

 

 

 

 

 

"Over the coming years the developments
in technology will eclipse anything
we have seen to date.  This provides organisations with the opportunity to
strip away hierarchy and deliver
organisations that are more
effective, energetic and efficient"

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"We know that the business can’t be sure
of its needs, so we plan our workplace
portfolio on the basis that we will need to ‘inflate’ and ‘deflate’ our workplaces
quickly and at no cost"

 


 

 

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