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.
Furthermore, there is also a believe that not everything people do can be measured - something that gets used to hide behind and justify non-delivery. That may have held true for a historic activity-based environment. The delivery-based design and the additional work on mathematical modelling, whereby all delivery can objectively be measured, have made robust inroads into many of these fallacies.
There is currently still the notion that positions, with equal name and grading, are the same. When dealing with activity based grading systems, the believe exists that all CEO’s of companies are the same, therefore all executive managers, senior managers and others are the same and can therefore be equitably compared in grading and remuneration. Reality is that when you compare their delivery, it may be worlds apart.
These and many other such notions are now being challenged. We have for example already seen the following in the global space:
Not all CEO’s need to focus on the same value delivery – some e.g. only need to focus on delivering targets, others need to ensure business sustainability while others may have to focus on market positioning and expansion. The same principle also applies for executive managers, senior managers and others.
Value is not only created at the top, e.g. value through knowledge (which in our modern society also equals power) is dispersed throughout the organisation. In this case value creation is very often not appropriately recognised nor appropriately rewarded. Current, outdated job evaluation systems are more often than not obstacles that often prevent proper recognition and reward in a new world of work.
Multiple layers of non-value adding management is still rife in many organisations globally. Even managers should add value over and above just being managers or supervisors. Managing or supervising without clear business/organisation defined value contribution is no longer a value adding position.
The focus on activity in job design and structure. When people are given clarity of their expected end-state delivery and provided the space to use their judgement, innovativeness and personal flair, they deliver and are engaged with what they need to do. They neither need to be policed to perform, nor have to go through engagement workshops to be motivated to deliver. Being policed is required in dull and tedious activity-based work environments.
Online work has become and will continue to become the norm rather than the exception. Traditional activity based structures with multiple layers of non-value adding activities will have to be replaced by delivery based structures. This will be essential as the new world of work will continue to challenge the straight-jacket notions of a 9 – 5 work day (with exceptions), having to be at an office to work (with exceptions), activity based job descriptions that undermines innovation and engaged employees, vertical hierarchical job evaluation systems, activity based performance management and more.
Old systems, e.g. grading systems, some more than 60+ years old, are still in use and held forward as reflecting the world of work today. Meanwhile, the technological and currently the digital revolution have redefined the world of work while these systems have not adapted.
Technology is taking on various activities previously performed by people, and these are not only your mundane and routine activity. Technology will continue to make inroads in the activity space. Defining the end state value delivery of people's roles will be essential in building a sense of purpose and value.
The challenges of the above and the lack of delivery in an activity based environment, have resulted in the development of the “Delivery in Context” model that has been researched with data from 5 continents, diverse industries and organisations for a significant amount of time. This has resulted in a robust and mathematically supported delivery-based model with multiple applications that impact organisations positively. The mathematics is an exciting new development whereby multiple organisational issues can objectively be measured for appropriateness, relevance and strength.
Delivery implies that each vertical consecutive layer, of a delivery-based environment, must have clear expected delivery. The only differentiation in vertical layering is based on what is delivered and the context of delivery that the role needs to deal with to ensure optimal value delivery. For that reason the reference to “delivery-in-context”.
Delivery in context: Structure focused on end-state delivery (not all layers reflected below)
Not output, not activity, not power, not position and not wealth. Delivery and measurable value delivery is the only basis for differentiating work. Delivery, wherever it appears in organisations are recognised and rewarded without having to climb a vertical hierarchical ladder.
The delivery-based framework also makes provision for a new and futuristic job evaluation system that evaluates positions currently on 2 axes, thereby doing away with the notion that moving vertically up is the only way to advance. The vertical axis deals with delivery in context, the primary focus in the delivery-based model. The horizontal axis deals with issues of content that support the delivery in context but also deal with market and risk related issues attached to delivery demands of the position. Activity, although still possible to evaluate mathematically, no longer forms the corner stone in job and structure design or job evaluation.
This approach takes away the need for a continuous drive towards vertical climbing. Reward and recognition in this new system also takes into the account horizontal issues that enables and adds to value delivery. For that reason it also recognises horizontal value over and above the vertical positioning. This in essence results in recognition and remuneration curves rather than straightjacket vertical hierarchical parameters. People can grow and be recognised on a vertical as well as horizontal level. Vertical, not based on title, activity, power and position but based on delivery. Horizontal, based on other factors of value delivery that should be recognised and rewarded in a new world of work. This system breaks away from the lockdown straight jacket parameters of current activity-based job evaluation systems. It frees up the organisation and its people to add value and be recognised and reward for value delivery. It also rewards progressive appropriate competence development on a horizontal scale, thereby enabling the advancement of people and the organisation. This system can fit into an individualised remuneration, clustered, as well as collective pay environment
This is the new world of delivery irrespective of whether work is done in office, online, digitally, virtually, etc. A world where the focus is on delivery, within the framework of values of an organisation, irrespective of how long, where and how the work is performed, as long as it delivers and delivers according to what is expected. This is a world of flexibility, accountability, freedom to express one’s own initiative and innovativeness. This is a world where you can optimally apply acquired competence and explore new avenues and opportunities. This is a world where value is appreciated, recognised as well as rewarded. A world where people do not have to move vertically to advance as horizontal delivery-based options for advancement, recognition and reward are also available.
Another significant breakthrough that brought mutual spin-off value to the delivery based framework and vice-versa is the ability to mathematically model various organisational issues. Up to now nothing of the following was possible, e.g.
Determine whether a strategic plan is contextually on par with the challenges it need to address – i.e. in terms of strength and scope and whether all the relevant contextually required issues are adequately covered;
Determine if the structure is of adequate strength and design to achieve the required contextually appropriate strategy;
Determine whether team clusters, e.g. the executive, business management, operational management team designs have the appropriate strength to deliver on mandates and requirements;
Determine if the job designs are complete in terms of contextual design, of appropriate strength and focused on appropriate and integrated delivery;
Determine if the space between roles are adequate, therefore mathematically remove unjustified overlaps and gaps between roles
Determine if people in positions have the insight strength into the required contextual dynamics they need to manage in order to deliver;
With the assistance of applied mathematicians, Kontextit has developed comprehensive mathematical measurements for all delivery as well as activity (in cases where organisations are still traditional and activity-based designed). In this way the relevance, appropriateness and strength of all the above and more can mathematically be evaluated and scientifically aligned and/or corrected.
Deviations can be:
Calculated to determine e.g. appropriateness, the degree of alignment/non-alignment, the degree risk of non-alignment and more;
These can be expressed in percentage deviation from the required and colour-coded according to the level of risk;
All of these mathematical values can graphically be displayed to show/demonstrate the current status of appropriateness and readiness of the organisation.
Highlighted deviations also indicates the possible cause(s) for deviation and how it can be corrected.
This result in scientifically short-circuiting the process of organisational interventions and the cost involved in such design/re-design and change.
This is ground breaking work with technologies to take organisations into the future.
The delivery in context technologies include:
The Delivery-in-context Model;
Strategy design technology;
Organisation structure design technology. The mathematical model assists in ensuring appropriate levels of distance and/or overlap and does away with ineffective, inefficient design and layers of non-value.
Job design and job descriptions that focus on delivery and therefore being a concise document that define expected delivery. It allows people the freedom, within the framework of organisation values and culture, to explore, use their judgement and skill, innovation and more to deliver on delivery requirements. It results in motivational job design;
Performance management technology focused on delivery;
Competence development focus on appropriate delivery;
A delivery-based Job Evaluation system that does away with the medieval like vertical activity based hierarchical ineffective structures;
Work Contextual Interview that enables an understanding of the context of work a person feels comfortable dealing with.
Kontextit is continuously busy evolving these and other technologies for the future.
Our services include:
Direct consulting services;
Mixed model approach of direct consulting as well as in-house enabling through skills development in the delivery based framework;
In-house skills development in the delivery based framework and licensing of associated technologies.
In-house skills development in the delivery-based model, while traditionally being done on site, can also very effectively be done online.
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