ORGANISATIONAL STRUCTURE FOR EFFECTIVENESS

AND AGILITY

71

Good knowledge of the social problem you address

Understand the environment you are working in

Clear purpose

Strong public narrative

Good governance

Collective leadership

Organisational structure for effectiveness and agility

Marketing strategy and communication plan

Human Resources

Financial sustainability planning

Financial management & analysis

Operational processes, systems and infrastructure

Create dynamic partnerships

Quality of mentoring-to-work

Social impact

TOOLKIT

Introduction

ORGANISATIONAL STRUCTURE FOR EFFECTIVENESS AND AGILITY

An organisational structure reflects where the power of influence is located and the channels through which information and influence flow. Organisations have three kinds of power, and three forms of leadership, three structures (Pflaeging, 2017). There is no decision to make about having all three structures, or not. None of the three structures is optional, or nice to have. They are part of organisational physics — universal laws that apply to every organisation, large or small, old or new, for profit or social. What is interesting about this view is that it recognises the existence of more layers of organisational structures in the same organisation at the same time. This view doesn’t make it simpler for upcoming organisations, but that’s not necessarily a bad thing. Building an organisational structure is not an end in itself, but is an answer on how to deal with the complexity of working together towards the purpose of the organisation. The organisational structure should support the continuous flow of value, enable effective collaboration around dependencies, ensure information is available to those who need it and distribute power to influence as required. We use Pflaeging’s insights to guide you on how to develop a vision for your (future) organisational structure.

The first structure is the formal structure. The most widely understood concept of power in an organisation is that of hierarchy. As a structure, it is more rigid, has little room for internal networking or space for complexity. However, it is necessary. Its versatility is usually over-estimated. A formal structure is capable of producing one important thing: compliance with the law. Because formal structure is the domain in which compliance is produced, every organisation, large or small, old or young, has one. Too much use of

formal power by managers, or too much emphasis on hierarchy, has serious downsides: as only one of three powers within any organisation, hierarchy must not be over-emphasized. If the formal structure becomes too dominant, this often has negative consequences for organisational effectiveness, diminished complexity-robustness, and a lack of innovation. In the presence of too much hierarchy or formal power the social density and connection deteriorates. Members of the organisation will try to influence the formal structure and its complicated mechanics of steering and control. Organisational energy is wasted on bureaucracy, and self-defence against command-and-control from the top carried out within informal structure.

The second structure is an informal structure. The core feature of this structure is an informal network. Such a structure gets its value from the informal relationships between people. It is the place where people share informal stories, find solidarity or where the gossip takes place. The power that emerges here is the power of Influence. The formal and informal structure are in permanent interaction with each other and influence each other in turn. Decisions made in the formal structure can trigger the informal structure, just as much as actions in the informal space can have outcomes in the formal space.

The third structure is the value creation structure. This is the least understood of the three structures of any organisation, but it is in this structure that the work actually gets done. This is the structure where effectiveness, performance and success can arise. Pflaeging notes that neither success nor performance can be produced in the formal structure or informal

72

Good knowledge of the social problem you address

Understand the environment you are working in

Clear purpose

Strong public narrative

Good governance

Collective leadership

Organisational structure for effectiveness and agility

Marketing strategy and communication plan

Human Resources

Financial sustainability planning

Financial management & analysis

Operational processes, systems and infrastructure

Create dynamic partnerships

Quality of mentoring-to-work

Social impact

TOOLKIT

Introduction

structure of an organisation, because these are just carriers of the compliance dimension and the social dimension. The third structure, on the other hand, gives rise to a third kind of power: the power of reputation. This arises when people who have a problem at work, which they cannot solve on their own, turn to someone else and ask: “Who knows about this?” or “Who is the expert on this particular matter?” At this point, people are looking for mastery. This is when value begins to form. Networks of cells, which contain functionally integrated teams, and which are interrelated by value flow, pay, and communication relationships is how we can imagine these value creation structures. In the structure, any cell either creates value for other network cells or for the outside (market, clients).

In practice, these three systems are interrelated (Pflaeging & Herman, 2011). If they are not interrelated and the organisation institutes a divide between management and workers, three systemic gaps are created. The social gap, the functional gap and the time gap. The social gap leads towards an erosion of the social network. The functional gap produces a need for micro-managed and imposed coordination through process control, interfaces, planning, rules, standards, hierarchical power. The time gap creates a division between the thinkers at the management level and the ‘non-thinking doers’, which often causes complicated systems that are of no use for the doers and only serve the management. However, as we know from several studies, information in these complicated systems is often only a fragment of reality and loses its meaning (Pflaeging et. al., 2012). Furthermore, during meetings at such organisations, a lot of sabotage techniques are often at play (the corporate rebels.com).

A mentoring-to-work initiative has all the features of a complex system: the presence or participation of living

creatures: mentors, mentees, coaches, volunteers and other stakeholders. People don’t operate in standardised ways, in clear cause-effect chains (even though we try to organise our organisations in that way and expect people to behave accordingly). The interaction between these actors and many more (friends, family, employment counsellors, social workers, …) is constantly changing. And the context in which mentoring-to-work initiatives work is conducted is described as VUCA: volatile, uncertain, complex and adaptive (Wheatley, 2017). To become a sustainable organisation, mentoring-to-work initiatives will have to be part of a network of collaboration, and be flexible and adaptive to the surrounding environment.

Mentoring-to-work initiatives need an organisational structure that is human-centred as well as results-oriented. Human centred because humans and the

73

Good knowledge of the social problem you address

Understand the environment you are working in

Clear purpose

Strong public narrative

Good governance

Collective leadership

Organisational structure for effectiveness and agility

Marketing strategy and communication plan

Human Resources

Financial sustainability planning

Financial management & analysis

Operational processes, systems and infrastructure

Create dynamic partnerships

Quality of mentoring-to-work

Social impact

TOOLKIT

Introduction

relations they establish are the key to mentoring. Results oriented because mentoring-to-work initiatives want to create impact (i.e. the employment of mentees in the regular labour market). Being able to prove your impact is of high importance for generating financial resources. The tendency towards results or impact based funding is growing in Western society and several organisations that offer mentoring make use of or ask for impact based funding (e.g. DUO for a JOB and Joblinge). Most mentoring-to-work initiatives that are financed with private money have to prove their impact to their funders one way or another. So, in order to be successful, mentoring organisations will have to create a work culture that supports both – a human-centred approach and a result-oriented organisational culture. Furthermore, there should be value creation structures in place that can handle complexity, thus facilitating the creation of impact.

Over the last few years several structures of value creation have been developed (Knuchel, 2018), which have the principle of self-organisation in common. If well-implemented, they are supportive of collaborative leadership, which is a feature of self-organisation and a critical success factor for mentoring-to-work initiatives. As previously mentioned, this is about enabling people in your mentoring organisation - and possibly other people involved (such as mentors and volunteers) – to take the lead in topics they are good at (Laloux, 2018), or that they have or want to gain mastery in, and to create an environment that supports the enhancement of their power. It’s about people and community development, in such a way that people can gain mastery: they can grow, achieve their full potential, develop themselves and contribute to the groups they are part of. One where workplaces move from being places of drudgery, to places of collaborative growth, learning and development,

and even of joy and living (Knuchel, 2018). In some mentoring initiatives this is also offered to mentors, volunteers from companies, and the local community. Organisations that work with a strong purpose and along the principles of self-organisation often offer this kind of support. They make use of the energy that is present, especially when it can contribute to the overall organisational purpose (e.g. supporting the integration of mentees into the labour market).

When it started out, Belgian mentoring-to-work initiative DUO for a JOB was organised along the principles of holacracy. This organisational structure is highly flexible and often has no clear job descriptions in place. It derives its strength from this flexibility. At DUO for a JOB, the small and motivated staff were guided by the primary purpose of the organisation as they navigated through tensions and opportunities that emerged. Holacracy-powered organisations focus on purpose at every level of scale: organisational purpose, team purpose, and individual purpose are all explicit and aligned. The result is that every team member directs their energies in alignment with the mission of the organisation, unlocking the full potential of their organisation. With holacracy roles are defined around the work (not people) and are updated regularly. People might fill several roles. Authority is distributed to teams and roles and decisions are made locally. This organisational structure came under scrutiny in 2016, when DUO for a JOB saw a steep growing curve and established new divisions of the organisation in several cities in Flanders. While the organisation still works along those principles, the roles are now more defined and distributed on the basis of the talents and competences of people working there. In comparison to the start-up phase, there is also a more formal structure in place.

74

Good knowledge of the social problem you address

Understand the environment you are working in

Clear purpose

Strong public narrative

Good governance

Collective leadership

Organisational structure for effectiveness and agility

Marketing strategy and communication plan

Human Resources

Financial sustainability planning

Financial management & analysis

Operational processes, systems and infrastructure

Create dynamic partnerships

Quality of mentoring-to-work

Social impact

TOOLKIT

Introduction

Another form of self-management that is often used in social entrepreneurial settings working in the field of complexity, is Sociocracy 3.0. Sociocracy 3.0. provides a coherent collection of principles-based patterns for collaboration, to navigate complexity, adapt and evolve. It enables people to incrementally process available information into a continuous improvement of the value stream, products, services and skills. It helps organisations make the best use of the talent and the collective intelligence of the group. In the context of mentoring-to-work initiatives that work with less qualified refugees, working closely with several partners in their ecosystem enhances the chances for a sustainable integration of refugees into the labour market. An organisational structure and culture that can build on the intelligence and the emergence of opportunities might be a critical success factor as well, especially as it fosters engagement with people working for your mentoring-to-work initiative and with other people and organisations in your network. To create a permanent flow, decision making processes are based on consent, which are guided by the principles of ‘good enough for now’ and ‘safe enough to try’. Sociocracy 3.0 is applied within start-ups, small and medium businesses, networked organisations, communities.

Sociocracy 3.0 works along seven guiding principles that shape the organisational culture:

• Effectiveness: devote time only to what brings you closer to achieving your objectives.

• Consent: raise, seek out and resolve objections to decisions and actions.

• Empiricism: test all assumptions through experiments and continuous revision.

• Continuous improvement: change incrementally to accommodate steady empirical learning.

• Equivalence: involve people in making and evolving decisions that affect them.

• Transparency: make all information accessible to everyone in an organisation, unless there is a reason for confidentiality.

• Accountability: respond when something is needed, do what you agreed to and take ownership for the course of the organisation.

The basic building blocks for organisational structure are interdependent, connected domains. Sociocracy 3.0 describes several patterns to grow organisational structure. All the tools to help you organise in this manner are open source and available online for you to use. In a mentoring-to-work initiative it will be of uttermost importance that these (or similar) principles of effectiveness, consent, empiricism, continuous improvement, equivalence, transparency, and accountability are apparent not only within the mentoring organisation and in the relation between the coaches and the mentors, but also inform the mentoring relation between the mentor and the mentee. We consider these principles equally relevant to the networks of collaboration that might be set in place among several actors in the field in order to open pathways and generate opportunities for sustainable integration of mentees into the labour market (Carrette, 2019).

75

Good knowledge of the social problem you address

Understand the environment you are working in

Clear purpose

Strong public narrative

Good governance

Collective leadership

Organisational structure for effectiveness and agility

Marketing strategy and communication plan

Human Resources

Financial sustainability planning

Financial management & analysis

Operational processes, systems and infrastructure

Create dynamic partnerships

Quality of mentoring-to-work

Social impact

TOOLKIT

Introduction

HOW TO TOOLBOX

The following questions help you reflect on your organisational structure.

• What structures do you have in place? Which structures are dominant? What are the strengths, weaknesses, opportunities and limitations of each?

• How much of your time do you devote to what brings you closer to achieving your objectives?

• During how much of your time do you create value? In an effective organisational structure, 70 % of the time goes to value creation, 20% to the informal structure and 10% to the formal structure. In ineffective organisational structure, 20% of the time goes to value creation, 50% to formal structures and 30% to informal structures.

• Are there practices in place to seek out and resolve objections to decisions and actions?

• Are assumptions about how your mentoring-to-work initiatives works or could work better tested through experiments? Are feedback loops and learning circles in place for continuous revision and learning?

• Does change in your mentoring to work initiative occur incrementally to accommodate steady empirical learning?

• How are people involved in making and evolving decisions that affect them within and/or without the boundaries of your mentoring-to-work initiative? Think from a multi-partner perspective (mentors, mentees, coaches within the mentoring organisation, volunteers, employers, … )?

• Is all information accessible to everyone in the mentoring-to-work organisation, unless there is a reason for confidentiality?

• Respond when something is needed, do what you agreed to and take ownership for the course of the organisation.

76

Good knowledge of the social problem you address

Understand the environment you are working in

Clear purpose

Strong public narrative

Good governance

Collective leadership

Organisational structure for effectiveness and agility

Marketing strategy and communication plan

Human Resources

Financial sustainability planning

Financial management & analysis

Operational processes, systems and infrastructure

Create dynamic partnerships

Quality of mentoring-to-work

Social impact

TOOLKIT

Introduction

Stepping stones for wiser action

What are the key learnings?

What are the actions to take?

Who is responsible?

What is the deadline for the first step?

Who will notice the difference?

How will we notice and evaluate the difference?

77

Good knowledge of the social problem you address

Understand the environment you are working in

Clear purpose

Strong public narrative

Good governance

Collective leadership

Organisational structure for effectiveness and agility

Marketing strategy and communication plan

Human Resources

Financial sustainability planning

Financial management & analysis

Operational processes, systems and infrastructure

Create dynamic partnerships

Quality of mentoring-to-work

Social impact

TOOLKIT

Introduction

REFERENCES

Literature

• Carrette, V. (2019). Mentoring-to-work in het normaal economisch circuit; Een mentoring model voor doorstroom naar NEC van vluchtelingen tewerkgesteld in art.60§7.

• Knuchel, F. (2018). Lean, Agile, Teal… how does Sociocracy fit in? medium.com/virtual-teams-for-systemic-change/lean-agile-teal-how-does-sociocracy-fit-in-b1be0a50e701

• Laloux, F. (2019). Reinventing organisations. Laloux at power of community: climate change and consciousness. Interview at the online summit.

• Pflaeging, N. & Herman (2011). How structures work, how they interact, what this means for organizational effectiveness and change. BetaCodex Network White paper, nr. 11.

• Pflaeging, N., Herman, S., Vollmer, L. & Carvalho, V. (2012). How to make work work again. How to break the barrier of command and control and create peak performance, networked organisations. BetaCodex Network White Paper, nr. 12 & 13.

• Pflaeging, N. (2017). Org Physics: The 3 faces of every company. How a triad of structures allows companies to absorb complexity. medium.com/@NielsPflaeging/org-physics-the-3-faces-of-every-company-df16025f65f8.

• Wheatley, M. J. (2017). Who de we choose to be? Facing Reality, Claiming Leadership, Restoring Sanity. Berrett-Koehler Publishers.

Websites

• www.duoforajob.be

• www.joblinge.de

• sociocracy30.org