Operating Model of Dual Organizations

How do you respond quickly and agilely enough in a world of accelerated change? How do we achieve the strategic agility we need to grow and be relevant in a complex world?

Organizations’ operating model bridges the gap between business strategy and the allocation of their operational resources to achieve the business objectives they have set out in the strategic plan. As we have seen in previous reflections, the operating model of the dual organization consists of two complementary structures:

1. A well-structured hierarchy with the management processes needed to produce reliable and efficient results, focused on people doing what they know how to do exceptionally well.

2. A networked structure, autonomous from the hierarchy, more agile, free of bureaucratic layers that operates in concert with the hierarchy, but focused on exploring the future and new opportunities.

Just as we are all familiar with the hierarchical management model, few of us have had the opportunity to work in organizational organizations where autonomy is fostered and where everyone can choose who to collaborate with, with no limits to initiative and creativity. The purpose of today’s reflection is to share with you the experience accumulated over the last few years in our consulting work to make operational duality a reality in very significant companies in our country.

Unlike hierarchy, which is structured on the basis of functional or business operating units, networkarchy is structured in a collection of operational circles, nested within the general circle of the company, which is the primary circle and fixes the context, vision and mission of all organizational activity. Unlike hierarchy, where the contribution framework of individuals is static and tied to a job position, in networkarchy people perform multiple functions and move fluidly through circles, facilitating the efficient and frequent reorganization of the organization’s resources based on the specific challenges to be solved at any given time.

Innovation Circles: Context and Autonomy

Just as departments and job definitions are the building blocks of the hierarchical structure, innovation circles are the building blocks of the network structure: not individuals, not units, not departments or divisions.

Innovation circles are autonomous from the hierarchy and their leadership model is distributed. Teams are largely self-organized, and individuals operate with a fair amount of autonomy. Within circles, leadership and innovation is everyone’s job.

It is a way of organizing people, with different skill sets and roles, around an organizational challenge or problem. Teams are autonomous, and very focused on an organizational gap or challenge. Participants have everything they need to achieve their goal within the circle itself, allowing them to work quickly, flexibly, and as autonomously as possible.

People select the circles they are interested in based on their abilities and motivations. Decision-making authority resides in circles, rather than residing only with the top leadership of an organization. Work in each circle is guided by a leader who helps the team navigate iteratively, creatively, innovatively, and quickly in solving selected challenges. Governance meetings channel the necessary tensions and changes into the circle without relying on managers to drive that process.

The role of hierarchical leadership is to provide information and context to each circle so that everyone is connected to a common purpose and has the best possible information to make their own decisions. So the management model on the redarchic side of the organization is one of “context and autonomy”, in clear contrast to the traditional model of “command and control” on the hierarchical side.

The operational synchronization circle, formed by the executive sponsors who have decided to become executives, is responsible for facilitating the progress of the circles and aligning the development of initiatives with the operation, recognizing achievements, efforts and change behaviors.

Control in circles is social, individual and team goals and metrics are shared and visible to the entire team, and accountability becomes more transparent. The sense of responsibility and leadership is personal and the focus is not on control but on training people for collective decision-making and collaborative work.

The circles work within the context that the organization has defined, making use of the resources (time and space) that it has decided to release to explore and develop the future. After finishing work in a circle, teams are redistributed based on the needs of the next initiative, maximizing the use and disposition of resources based on the organization’s real gaps and challenges, away from internal politics or personal interests.

Operating Principles

The operating and governance principles within each innovation circle are very similar to those of a Holacracy, where authority is distributed and decision-making is distributed horizontally rather than being set by a management hierarchy. Its principles are:

1. The job is divided into specific “roles” in place of general job descriptions. Each role has a specific purpose, domain(s), and responsibilities.
2. Roles are defined through a collaborative governance process, and are regularly updated in order to adapt to the ever-changing needs of the organization.
3. Each circle has a community and a leader who creates, invites and leads the initiative and connects the activity to the primary circle, which is the company.
4. Within circles, roles are individually but collectively defined and assigned to get the job done.
5. As new goals, tasks, and initiatives arise, individuals create new circles to deal with them.
6. Policies and roles are created and organized within the corresponding circle and teams have a specific role depending on the challenge or gap to be solved.
7. Potential problems and opportunities are dealt with within each circle. Any member can identify and propose a tension or challenge to be solved and these are selected collectively.
8. There can be different teams (circles) for different projects, initiatives, or functions (finance, technology, sales) or segments (customer, product, service)
9. Some circles are more fleeting than others. And teams come and go dynamically when employees themselves perceive changes in the needs of the organization.
10. Circles conduct their own governance meetings, assign members their roles, and take responsibility for carrying out initiatives within their sphere of authority.

A new contribution framework

Unlike traditional job descriptions, which limit people’s contribution framework to a few assigned activities, role definitions in innovation circles are dynamic, constantly updated and clarified based on the day-to-day relationship, and the needs of the organizational challenge to be solved.

The difference is that instead of maintaining positions on the org chart, which are often vague, theoretical, and outdated, waiting for the next reshuffle, roles in circles are reshuffled as often as necessary to capitalize on a learning opportunity or solve an organizational challenge or gap.

Innovation circles thus make possible a new contribution framework in organizations, designed to learn and respond in a systemic and agile way to new business challenges. These contribution frameworks are self-contained and are not tied to a position or position in the organizational chart. This opens up unlimited possibilities for all people in the organization to get out of their “comfort zone” and connect freely with those initiatives that give the most meaning and purpose to their work.

This is very good news, particularly at a time when many organizations have serious talent management problems, since the areas of greatest responsibility and contribution are linked to “vacancies” in the organizational chart, which is a serious problem, when at the same time we need to eliminate layers of management to improve operational agility.

In other words, innovation circles create new possibilities for professional development based on many assignments, diverse experiences and personal leadership, this not only improves the future employability of the people in the organization, but facilitates the adoption of new collaborative ways of doing things and the development of key competencies for networking and collaborative leadership.

In the next post we will address some of the most crucial and impactful operational challenges in dual organizations: How to create new collaborative spaces for innovation and how to facilitate collective innovation? . Don’t miss it.