Shifting from medieval activity-based to value-delivery-based organisations.
Structures have in essence not changed since medieval times with its vertical hierarchies of power, control and possession. We have imported these notions into business and the way we go about our lives since the 1st Industrial Revolution and have continued using these archaic principles up to today.
Spot the similarity:
Post-Industrial Revolution up to today Hierarchy
The medieval era had strong vertical hierarchies of position, power and wealth. The crown (political power) and the church were the powers of the day and the pecking order was typically vertical hierarchical. People fought to be at the top as that gave power over land, wealth, as well as people. Getting to the top, or at least moving up the ladder, was first prize. Any means possible were used to move up the hierarchy even if it meant getting rid of people that were perceived as obstacles towards achieving a higher vertical rank.
The same vertical hierarchical principles were adopted and are still well and alive in society and industry today. In a traditional vertical hierarchical world the higher the position, the more power and the more money attached to it. As a result getting to the top, or moving up the vertical hierarchical ladder, remains first prize.
Spot the similarity:
A proliferation of management layers: A vertical-linear world continued…
A proliferation of the vertical-linear world enabled and supported by:
activity based differentiation in job design and job descriptions as well as
activity based Job Evaluation Systems of which most, if not all, current Job Evaluation Systems are prime examples.
Current World Vertical Hierarchical solution for specialists.
Over time vertical layers proliferated to make provision for management vertical mobility. More people wanted to get more and be recognised more. A similar vertical hierarchical layering process had to be invented for specialist/knowledge workers to retain them in specialist roles rather than losing them to managerial ranks. As a result the drive for vertical mobility became more intense with more layers being created and added. This was, and still is the only way for better recognition and reward besides special bonuses.
Something had to be used to justify this vertical layering. This is where a focus on activities became the means. Activity as basis for job design, job differentiation and job creation infused this vertical hierarchical layering and with that the proliferation of jobs without meaning. A whole school of thought (lead by Adams as one of the thought leaders of the time) was created around activity differentiation. Everything in organisations became focused on activities and activities were and still are used to e.g.:
decide what needs to be done in the organisation rather than what needs to be delivered;
differentiate one position from another based on the activities they need to perform, which sometimes result in ridiculous job fragmentation;
to decide who does what and the rank order of activity in the structure, which often results in merely a pecking order of meaningless hierarchies of little, if any, value;
to evaluate whether people are doing what they supposed to by controlling what they do (activity), when and where they do it during office hours (input), are they busy enough doing things (activity and input). With the drive towards online and offsite work, this will become increasingly more challenging;
to evaluate if they performed expected activities by conducting activity based performance management – have they done x, y, z activities – if they have, they score high on evaluation – but when you ask what has been delivered, what end-state value has been generated that is not just mere performed activities, very often there is nothing to show for all the activity effort. E.g. someone may have done a strategic plan, evaluate the available resources, determine the budget requirements, etc. a full score of activities, but at the end delivers nothing;
to determine the job’s value through activity based job evaluation.
This focus on activity and the vertical hierarchical layering thereof resulted in and continue to plague organisations with organisational ills that impact organisation effectiveness, flexibility, adaptability and sustainability, to mention but a few.
Some of these ills include:
The activity based job design that results in e.g.:
Eroding of accountability – as accountability is often pulled up to higher ranks than what is really required;
Fragmentation of work and de-powering of people as they cannot take charge of a full job resulting in disengagement and lack of motivation;
People being very busy, performing activities, working long hours, but achieving nothing;
Inhibiting innovative and creative contributions. People working harder to perform all the required activities and not smarter, therefore not finding new innovative ways of doing.
Activity based job descriptions that still focus on KPA’s and KPI’s currently still the primary way of describing jobs. This focus on activity in job descriptions becomes either a recipe to do and not to think, or it becomes a paper exercise that lands in the bottom drawer. Something that should be a key valued process in the delivery value of the organisation becomes a mere paper exercise for the purpose of activity differentiation and activity based grading differentiation.
This activity-based differentiation gives rise to the proliferation of vertical hierarchies that very often are of no substance or value to the organisation. The only real impact to the organisation is its ineffectiveness, inefficiency and high cost base.
Inflexibility and inability to adapt. Current activity-based structures of power and control do not adapt easily to change. Covid-19 has also clearly demonstrated how these organisations find it immensely difficult to adapt to an environment where people now need to do things online. People are not at the office from 9 – 5, their activities can no longer be scrutinise, there is no control over what they do and how they work, etc. If you were in a delivery based environment where the focus is on end-state achievement, these issues becomes irrelevant as long as people deliver what was expected, not as in activities, not as in outputs, but as in actual end-state delivery. That is where a delivery based framework enables a fluidity and adaptability that enables full delivery value.
A focus on administrative differentiation e.g. one person can sign for $5000 and the manager for $7000. The amount you can sign for is allocated to the position irrespective of what the position needs to deliver and be in control of to deliver. In this way administrative differences differentiate layers but at the same time often impacts organisational delivery effectiveness and efficiency negatively.
A vertical hierarchical Job Evaluation being part and parcel of this activity and administrative based environment that give rise to, support, enhance and maintain the proliferation of non-value-adding vertical hierarchical layering. “The only way towards recognition and more money is upwards”. In many, if not most cases, to the detriment of the organisation’s effectiveness and sustainability, as well as detrimental to the engagement, motivation and delivery of its people.
Vertical hierarchical titles are also connected to job grades. The assumption, wrongly so, is then also made that jobs of similar title and grade can be compared for determining remuneration equity. Unfortunately titles and grades in one company can be vastly different, in terms of delivery intent and content, from that of another company with similar/identical titles and grades. The underlying activity might be similar, but the value delivery may be vastly different. Equating the one to the other for comparison is often illogical and inappropriate.
Activity based performance management resulting in people being busy performing activities while not actually delivering value. You have e.g. designed and put a business plan in place – an achieved activity. Congratulations. That does not guarantee the achievement of your profitability/sustainability targets. Having a strategic/business plan in place is merely an activity towards a delivery and not a value delivery in itself. In certain performance management systems the question gets asked “What is you role in strategy?” This results in a description of vertically layered activities that may e.g. look as follows: one puts the strategy together, the other develops a strategic-operational plan, the other develops a business plan based on the strategy, yet another develops an operational plan based on the business strategy. In that way activity now differentiates between the different vertical layers. Up to this point no-one has focused on or delivered any end-state value. They have all put plans in place, according to the performance management contract and therefore can all score high in achievement. Unfortunately no-one has delivered anything of end-state value. Activities have been performed but no value has been created. Value delivery according to a delivery-based model would have focused on e.g. competitive position improved, profit target achieved, profit potential/sustainability secured through targeted growth, production targets achieved, tasks/products delivered to standard, etc.
Contextually inappropriate and activity based organisation strategy. The company misses its strategic imperatives due to not understanding its required delivery context. An elaborate and sometimes very intelligent strategic plan may exist that completely misses the essential and required context the organisation should be dealing with. The company therefore becomes irrelevant in the market, despite having a perfect strategy with activities but completely out of touch with context. The strategy therefore adds no value to the organisation, it only adds cost for developing something that misdirects focus and detracts value. This is where the delivery-in-context framework guides the strategy to ensure it addresses the appropriate challenges of context. It also results in a much shorter and cost-effective process to design a contextually appropriate strategy.
Due to the focus on activity and vertical hierarchies of status, other nonsensical issues also clutter organisational decisions. Often, when people are at higher levels, they suddenly also need to proof or acquire higher levels of education. E.g. for a person to be a manager/senior manager may require a B degree, but to be an executive manager may now suddenly require a Masters or even doctorate in the same subject matter. Very often status is at play in these decisions rather than what the value delivery requirements are and the skills set required to deliver the appropriate value.
The above are only some of the more problematic and pressing issues, stemming from the vertical hierarchical layering, that contribute to highly ineffective as well as non-sustainable organisations.
Contextually appropriate delivery-based alternative
The vertical hierarchical, activity-based, non-value adding designs have never been questioned or challenged. The changes that were made over decades were merely to enhance the inner workings of structure and not structure itself, e.g. business process improvement, team structures, centralised/decentralised structures, matrix structure, etc. Structure and the basis and workings of structure, in essence, have never been challenged. This have resulted in some believes still set in peoples’ minds e.g.
The people at the top know better and therefore should control things and get the bigger slice of the pie when it comes to reward. The whole notion of the higher, the better, the more.
People must be at the office from 9 – 5 and be busy. This is an essential practice in the activity-based design of companies where being busy, performing activities and being controlled is deemed important. While this still is necessary in certain cases and certain kinds of jobs, this, in many other cases, need not to be. Covid-19 has demonstrated that people can work online and offsite. Continuing with activity based jobs and organisation designs will make a transition to this “new normal” extremely difficult, if not impossible. As a result they will also not reap the benefits that delivery-based organisations will gain from a focus on delivery and the freedom it provides to add value.