Have you ever wondered how traditional,
hierarchical organisations actually work on a day to
day basis given all the frustrations of working in
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
So what’s actually wrong with ‘traditional
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
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
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
the cost of it: time is in effect treated as a ‘free’
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:
- Allow the enterprise to ‘turn on a
dime/sixpence’ changing without pain to adapt to
new threats, opportunities and economic
- Be well placed to meet its promises to
clients, shareholders and people.
- Maintain a flexible cost base and
infrastructure so that it can ‘inflate’ and
‘deflate’ its operations without incurring
- 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.
- 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.
- 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
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.
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
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:
Executives – The people who
actually perform the acts of productive work.
Leaders – The people who lead
groups of Executives to deliver a pre-determined
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
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
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.
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
Each of the infrastructure service
organisations operate separately and deliver
service organisations work as a unified team
with a common purpose.
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
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
The Office workplace
The office is the primary place of work for
||The office is the
primary place for many, but for more it’s a
place where you go to meet colleagues and
Contracting for space
Takes long leases to get the cheapest
||Limits fixed lease
commitments in favour of
flexibility to flex headcount up and down.
Uses serviced offices as tactical response
when the company runs out of space, or needs temporary
space for project teams
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.
Organisation is based on a command and
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.
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
The IT function delivers technical solutions
and expects users to be responsible for
||The IT function
provides services to support adoption of new
support people in changing behaviour.
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 are resources that are recruited to do
||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.
Recruits people for specific jobs
who have energy, enthusiasm and talent so
can be developed to deliver great work.
When you join the organisation you go
through an induction programme and then are
allocated to a line manager who ‘owns’ your
||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
Performance is measured by presence and
measured by outcomes against regularly
Most people are employed on 9-5 open ended
‘employment contracts’ that imply a
||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.
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
automatically track the cost of people’s
time so to make sure time (cost) is
being deployed on the most valuable tasks.
Allocates Capital budgets to individual
investment across processes to maximise the
performance of the process
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.
Treats all units the same in respect
||Adopts a different
regime to manage risk within the different
parts of the organisation, depending upon the
nature of the work undertaken.
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.
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?