The Path to Dual Organization

In the first part of this conversation we have shared the first two steps towards the dual organization: (1) the need to question the premises on which we have built organizations over the last hundred years and (2) the need to create new dual organizations, capable of learning, adapting and addressing the complexity of a digital society, without sacrificing their current operational capacity.

In today’s reflection, we will share some ideas and insights that will help you turn your organization into a dual organization, capable of constantly interacting and innovating, without interrupting its daily operations. We will start by describing what social reengineering consists of; then I will share a transformation framework, arranged in three simple iterative stages that any organization can follow to move forward on the path to bimodal organization. Finally, we will look at rearchy as a driver of change.

The reengineering of the social dimension

The traditional way of organizing and applying the collective intelligence of an organization has always been done through a hierarchical structure and business processes as a coordination mechanism. In the same way that the “process dimension” provided our organizations with the scalability necessary to capitalize on an essentially demographic growth in a supply-side market, the new “social dimension” will give our organizations new capabilities to adapt to changes, manage increasing complexity and connect with the collective genius of the people in the organization in an essentially demand-driven market.

And, in the same vein, going a step further, the social dimension is what really gives our organizations their bimodal capacity, in the sense that it allows them to collectively explore new opportunities, in a non-hierarchical (organizational chart) mode, providing them with the purpose, trust and transparency necessary to address business challenges collectively.

The key to this operational bimodality is precisely to reformulate collaboration so that it is not “something else to do”, one more item on the list of priorities, but a fundamental means of addressing all business priorities. It is about using the potential of new social technologies to radically change business culture, so that a new paradigm can be established in the management and leadership of organizations. A new paradigm that makes operational results possible with learning and collaborative work. Thus, the strategic use of mass collaboration is the key to bimodal organization, the harnessing of collective intelligence creates a new source of competitive advantage, and gives the organization the agility and innovation necessary to address the future.

This is the only way to be competitive, to survive, to maintain relevance in the new context. For this reason, traditional organizations are going to have to complement formal hierarchical structures with new models of value creation in community, redesigning their structures to make this new social dimension possible. And, at the same time, they will be forced to transform their culture to make a new social contract with their workers possible. By force, this new contract must include and make a reality the new values that make mass collaboration possible: networking, transparency, trust, autonomy, and a sense of purpose for the community.

Transformation Framework

The path to the dual organization is not an easy one. It is about providing today’s hierarchical organizations with a new social dimension that allows them to interact with the new reality, learn, adapt and address complexity while maintaining their operational capacity and business results throughout the period of the necessary transformation. It is not a question of technology but of people, it is not a matter of launching a social application that makes social collaboration possible, and then praying that it works. Reaching the destination requires a strategic approach, a commitment at the highest level of the organization and the willingness to seek collective answers to the challenges we face. Probably the most important challenge is to get people accustomed to very strict hierarchies to believe in the viability of a bimodal structure.

These are three simple steps that summarize what we have learned by making collective innovation a reality in very significant companies in our country, which can serve as a guide for transformation:

1. Creating new contribution frameworks that enable collective innovation

The starting point is to create and foster an appropriate environment, which allows specific time and resources to be dedicated to collective innovation. It is a matter of enabling shared infrastructures within and at the borders of the organization and returning activities for innovation and exploration of new business models to autonomous communities. Innovation and experimentation, on a small scale, are best achieved in flexible groups, of committed individuals in small-sized autonomous teams. These can be users, independent experts, enthusiasts of new technologies and customers. Obviously, it requires new ways of doing collaborative things and a different management model: more facilitating than hierarchical, adaptive rather than authoritarian.

It is necessary to have a collaborative platform, as well as to establish a guiding community based on a coalition of agents who “viralize” new behaviors and collaborative ways of doing things, who share a common purpose that is aligned with the strategic challenges facing the organization. Real collaboration requires leaving the “comfort zone” outside of traditional hierarchical structures to focus on value creation and innovation. These people who make up the network also participate in the day-to-day work of the company. It is not a separate group of consultants hired especially for the task or a work group created for the occasion. Purpose is the cause that unites and turns isolated individuals into a community and it is what leads its members to guide it, share their experiences, and communicate their activities.
. Modest initiatives backed by verified information from all levels and silos of the hierarchy, carried out by many committed people, each with their particular perception of all levels and all silos of the organization, give the network the necessary power to undertake strategic actions of great impact on the organization.

It is necessary initially, and while the new behaviors are consolidated, to interpose a real “firewall” between the emerging communities and the “formal organization”. The objective of this action will be to protect the community from both the most common pathologies in the hierarchical dimension (functional silos, power struggles, corporate policies, etc.). passion killers…) and the formal organization’s natural tendency to seek short-term results through traditional command and command. Unfortunately, this prescriptive control is the antithesis of collaboration. Relinquishing control to create space for collaborative challenges is certainly a difficult change for many managers, who have so far used their authority and the power of the position to achieve results. But it is a necessary change, since exercising authority over a collaborative community thwarts purpose, trust, and transparency, turning innovative communities into mere corporate working groups.

Collective innovation requires that we are open to receiving ideas from any member of the chain, whether internal or external. Following the same logic, the collaborative platform must be open, making it possible for everyone to participate in the generation, evaluation and transformation of ideas, which, in the end, must end up becoming concrete initiatives. In this initial phase, it is very important to visualise and make visible the results of participation, which implies recognising individual and collective contributions.

Contrary to what one may think, the company’s management team plays a crucial role in the creation and maintenance of the network structure. The team of leaders of the hierarchy must serve as a model for their subordinates in their interaction with the new collaborative network spaces. Therefore, it is important to be directly involved in its launch, recognition and support, to ensure that the rest of the hierarchy supports the duality of the organizational structure. It is not an informal organization, nor just another initiative, but it is part of a new structure designed to interact without internal and external borders, with our customers and partners, to adapt to the new context and improve competitiveness.

The hierarchical part of a bimodal organization differs from other traditional hierarchies in one essential way. A large proportion of the work that was normally assigned to it and that required innovation, agility and rapid execution of strategic initiatives, which are usually initiatives in the hands of specific business areas, or strategic departments, have been diverted to the new collaborative spaces in the rural part of the organization. This gives the hierarchy more freedom to better perform the tasks for which it is designed: doing the daily work well, introducing gradual changes to increase efficiency, and managing strategic initiatives of continuous innovation, such as regular updates of processes and operating systems.

2. Development of leadership, culture and social competences necessary for collective innovation

Collective innovation requires a different kind of leadership. Transformation requires a new adaptive leadership capable of asking the right questions, listening, proposing alternatives, convincing and managing the losses associated with the new ways of doing things and the necessary changes. We must develop new 2.0 skills in social media, with the aim of adapting leadership, culture, processes and individual responsibilities to the new frameworks of collaborative contribution.

We also need to develop specific methodologies and processes that facilitate creativity, idea generation, evaluation, selection and development. In this phase, it is very important to translate new skills into new habits and new ways of working. We have to collaborate on platforms that are compatible with the functional structure, so that it is possible to integrate their activity and their results into the overall organizational context.

As leaders we will have to learn to manage the dilemma between responsibility for results and the inability to control or plan what a community produces as an end result of its interactions. As leaders we must dare to question the status quo of the formal organization, to innovate and create value collectively, connect and interact with the new reality, participating in new conversations, sharing and creating value for the community.

A bimodal structure, despite how radical the idea may seem, does not require a traumatic renewal of the organization, so it is much less risky than you might think. Networking, as in social networks, evolves, grows organically over time, accelerating as it creates value and shows its ability to interact with the new reality of a hyperconnected world.

You can start small, starting in a more open part of the organization and then extending to other parts of the organization that are less prone to change. We can initially focus on creating new contribution frameworks to connect with the most motivated part of the workforce and accelerate some of the strategic initiatives we already have in place without the need to hire new staff. As long as the management team is aligned with the bimodal vision, recognizes and gives visibility to the community’s achievements, and as long as the new organization proves its effectiveness in the face of competitive challenges, the bimodal operating model will eventually be integrated into the corporate culture as “the way we do things here.”

The key is to understand that the mere fact of collaborating and sharing on an equal footing generates innovative proposals and solutions, and allows the activity to be transferred, in a natural way, to the nodes in which value is really being added to the organization. Faced with a complex problem, the collaboration of all agents in open networks generates new interactions, allows creative proposals to emerge and, ultimately, makes it possible for the solution to emerge naturally.

3. Innovate by doing to translate mass collaboration into business value

We must translate both ideas and collaborative work into business value. Crowdsourcing must be transformed into innovation initiatives, concrete operational improvements, and a new way of working for the organization as a whole.

It is important that the collaborative platform supports the creation, selection and translation of ideas into concrete business initiatives, with progress metrics and results management. This will allow us to accelerate the development of those initiatives that add the most value to the organization as a whole. In short, it is about translating mass collaboration into tangible competitive advantages in all possible aspects of business activity. Not surprisingly, if we manage to involve customers, distributors and channels in the design of new products, we will improve their chances of success, and we will accelerate their acceptance in the market.

It is equally important to achieve successes and also ensure that those achievements are visible to the entire organization and celebrate them. These achievements or successes and their celebration can bring enormous positive energy and be crucial in building and maintaining a bimodal company. Early results lend credibility to the new structure, and this credibility in turn promotes increasing cooperation throughout the organization. These successes earn the respect, understanding, and ultimately full cooperation of managers who are most attached to the command and control system and who had been skeptical and distant from the community. The institutionalization of achievements will eventually integrate operational duality as a new way of doing things into the company’s culture. Duality should be seen as an organizational capability that constantly seeks opportunities, identifies initiatives to capitalize on them, and completes initiatives quickly and efficiently.

Of course, difficulties will arise. The operational duality between hierarchy and dual rearchy doesn’t build in a few days, but the good news is that it doesn’t require radical organizational reform. Rearchy can start with small steps in concrete innovation initiatives and can emerge in only one part of the company, growing over time, becoming a powerful force for innovation, and expanding throughout the organization.

Over the past seven years, we have advised many companies on the creation of dual structures. The challenges are often predictable, but not insignificant. One of them is precisely to ensure that the two parts of the structure, hierarchy and networking, learn to work together. Success in this new organizational structure requires new mental models and a new approach to today’s business challenges. Throughout the transformation process, management must be oriented in order to give the community and its members the necessary support to achieve their purpose: to communicate and celebrate achievements from the beginning, to connect their innovations with other organizational change processes, and to effectively protect the community from hostile processes.

Redarchy as a driver of change

Based on what has been said above, true change in organizations does not have to do with preaching the need for change, its importance or the consequences of change, but ultimately it has to do with changing behaviors.

In the Age of Collaboration, the network must be the primary vehicle for driving organizational changes, in the same way that in hierarchical change the organizational leadership sets and communicates the objectives of the change, aligns the different levels of the organization and communicates the changes in cascade in a massive way. In the network change, the objectives of the change and the initial communication are set by the management, but the change is created and propagated by the network based on corporate activism, social imitation and the influence of a few individuals, bearers of desirable behaviors, who act as nodes for the dissemination of new behaviors based on their connectivity, closeness and high credibility in the organization. It is essential that the change is driven by many people and from all departments, not just the usual ones.

Rural change integrates social media practices into organizational change management, facilitating organizational change scalability and sustainability and eliminating many of the limitations and pathologies of formal hierarchy. Networking as a driver of organizational change allows us to:

• Reduce fear of change and increase trust, facilitating collaboration and collective innovation.
• Mobilize the people of the organization towards collaborative learning and collective innovation regardless of hierarchy or position, based on their interests, passions, knowledge and experience.
• Involve the community from the outset in finding more creative responses to the organization’s strategic challenges.
• To facilitate the active participation of people in the collective search for specific solutions to day-to-day challenges by accelerating the adoption of changes.
• Avoid overvaluing legacy and the status quo by making it possible for new perspectives and realities to emerge that generate the energy we need for change.
• Involve our customers, distributors and channels in the design of products, accelerating their adoption and acceptance by the market.
• Redefine business boundaries and make inroads into others’ business models.
• Develop new indicators of progress based on the diffusion of new behaviors.
• To promote the emergence of true organizational activists who defend the changes that neutralize the usual passion killers .

Ultimately, redarchy allows us to do more than cling to the achievements of the past and to be able to evolve hand in hand with young people, whose values are those of the social web, towards a fundamentally new business model. If we manage to successfully implement bimodality as a new business management methodology, we will be able to successfully overcome the strategic challenges of a digital world and configure an organizational model that makes innovation and leadership everyone’s job.