Steering Beautiful Organisations

To create an excellent, viable and inspiring organisation, we need a clear idea of the matter, a description and an awareness of what we are dealing with. The comparison often made with an architect making a blueprint falls short here, as organisations are not physical manifestations of ideas. We are dealing with abstract “structures”, social systems, which are only real in our imagination, in our constructs[1]

To do this, we use “mind models” that depict reality – simplify it in such a way – so that they give us room for shaping. There are many organisational models, such as McKinsey’s 7S model and others.

The model I have developed primarily addresses the aspect of steering or navigating and involves the ecosystem more than most organisational models I am familiar with. It is meant to provide guidance on what parameters are -in the sense of “beautiful” organisations- needed to be most effective for taking influence.

I will explain the question of what a beautiful organisation is later.

Asserting and remaining viable

The overarching question for all living systems – thus also for organisations – is how they can assert themselves in their ecosystems, in the markets, and thus remain viable. While the quality of survival initially plays a minor role in the modelling stage, it quickly comes into play in the context of economics. For instance, something about how success is defined or how much growth or profit is expected.

Picture; Model for steering organisations

The right ” soil ” for the roots

Whoever leads, needs an idea of time and space – it’s like sailing: Without orientation in space locating the ship at sea and in time, we will neither know where we are, where we have come from nor how we might sail from here to someplace exactly.

For organisations, a historical embedding offers an opportunity for the creation of awareness about one’s own origins. A manager once asked me why this was necessary since the past was over and nothing could be changed. My answer was that the question of how the past is evaluated, for example in the form of past decisions, is highly present as it is fundamental for learning.

Evaluations always take place in the present and above all serve to learn and to develop a better understanding of the successes/failures of the past. Only then can we derive future strategies more precisely. Only then do historical incidences, stories and experiences become resources and thus productive factors. According to the motto: “It is never too late to find positive aspects of one’s own past” and thus to change it.

In my model, I call this the roots of the organisation. If an organisation does not have a picture of its roots, it can’t know which “soil” is best for it . If you don’t know your base, you won’t know where you are jumping from and how far your roots will allow you to “extend your roof”.

Questions about the roots:

Where do we come from?

What are our most important strengths and talents?

What do we believe in? What not anymore?

What makes us tick?

What values do we share? Which ones do we already practice?

The secret of beliefs

The longer I work with companies, the more important effective beliefs in the organisation become, it seems to me. Belief systems (including values) are the soil for actions and processes and thus for operations. They shed light on people’s mental models. It is quite irrelevant for lived practice whether these beliefs are implicit or explicit.

What is essential for “beautiful organisations” is what the members of a management team believe in. For example, whether they believe in infinite growth or in the fact that free markets change everything for the better or not. Is there a conviction in the company that businesses must make a relevant contribution to tackling climate change today, or is this a sales opportunity – i.e. a business opportunity. Ultimately, what is it that people in companies are convinced will be crucial for their success and that can be supported at a value and belief level?

This was the question Bill and Vieve Gore faced when they asked themselves where the Gore company needed to head. It was clear to them that innovation would be the key to success. They believed that a culture of eye level and self-commitment, rather than command or hierarchy, would be crucial. Only this would ignite people’s talents and creativity.

The following quote probably sums up these beliefs best:

“We don’t manage people here. There is a fundamental difference in philosophy between a commitment and a command.”

W.L. Gore [2]

Such beliefs shape behaviour, they come from our past, from our individual and, in the case of organisations, also from the collective history. Understanding history, origins, imprints and patterns is therefore highly relevant, as no living system is made for everything. Each has a genetic and social imprint that still leaves many possibilities, but also excludes many others.

Break for reflecting – a few examples of beliefs

1. How much do we believe that excellence comes from consistently working on people’s strengths? Or is the belief more that we get better primarily from working on deficits?
 
2. How convinced are we that infinite growth is possible on this planet (because technological progress, for example, will always give us new opportunities to achieve it)?

3. Do organisations need “heroic” leadership, someone or several who have the big ideas, inspire and pull everyone else along? Or are we convinced that we should build systems and structures for our companies in which people can achieve goals independently and in teams?

4. Do we believe that everyone should individually maximise benefit (homo oeconomicus) or rather that we have a responsibility of solidarity in society and in our companies?

5. Name some of the beliefs that guide you or your colleagues…

Vision

Whatever the beliefs, values and convictions are, for navigating and steering social systems like organisations we need shared images on these questions so that we can develop powerful, overlapping images of the future – the next parameter of the model. For human beings, the question of where we want to go is highly pivotal because answering this question provides guidance for our next step.

Let’s stay with the metaphor of sailing. A compass gives us a clear direction, it does not show us which way we should go, but it gives us clear orientation which direction we are currently heading towards. The decision for our next action is up to us. This is similar with images of the future (I equate the term here with vision) in organisations. With these, we can then derive goals that serve to give us orientation for our next step, whether they are big (vision: where do I want to go with my life?) or small (do I want to grab a coffee or go straight to the office instead). They are not so much there to achieve this goal with pinpoint accuracy as to give us behavioural orientation for our immediate future.

This emergent approach to the topic of goals usually already helps to reduce the complexity of answering questions about vision or strategic goals. We are then less in danger of making big, year-long plans that are no longer sustainable today.

Key questions about the vision

Who will we be when we have achieved our most important hopes and dreams? What will we be doing then?

What do we want to achieve? What are we really striving for? And what are we definitely not aiming for?

What do we want customers, competitors, suppliers… to say about us?

How should people be able to work with us? What do they say and feel then? What will they talk about enthusiastically?

How will we and our environment recognise that we have achieved our big goals and dreams?

Blatt

Questions like these help develop images of directions. But they also help to be able to broadly discuss diverse perspectives for developing our images and aspirations of the future (=vision) and “thrusting directions” in the process of developing these strategies in an organisation-wide dialogue.

If we want to create beautiful organisations, these questions must also be linked in a larger context with the issues of social and ecological sustainability (I will explain this in more detail later in the article). Only then will it be possible to find out what the people in these organisations want and support. Only then will energy, commitment and engagement of people emerge. People support what they have helped to create, is the belief, an idea I owe to Paul Tolchinsky. [3].

Patagonia can once again serve as an apt example at this point: Patagonia no longer believes in unconditional growth, so they have dropped growth as a goal and instead formulated their own contribution to saving the planet as a goal.

This is reflected in their strategy via circular economy concepts, in which Patagonia buys back old or unsuitable products from customers. They are repaired instead of creating new ones and thus investing in growth. The founder recently “gave his wonderful company to the earth” and handed it over to a charitable foundation.

If we now introduce the larger context, this should mean for vision statements of every organisation today that they directly relate to and positively influence the management of the climate crisis, in social issues and also the current economic system.

No company can no longer avoid these questions if we do not want to endanger our future as humanity. Because this is precisely what is at stake. Beliefs such as

  • a company is not a social association
  • the state is responsible for ecological and social issues. (usually this only refers to politics and not to all of us)
  • companies can’t care about that, they create jobs anyway

…will probably have to be overcome and replaced with these or similar ones:

  • economy and regenerative management are compatible
  • decisions that are widely supported and negotiated in the organisation do not lead to a slowdown, because everyone wants to have a say, but to better results
  • creating jobs alone is not good news, which jobs we create for which purpose and with which impact will decide our future

Organisational design

If we have worked on the time axis for the first two factors, we will now switch to the spatial dimension. What must the body of the company look like so that, based on its origins, its own possibilities and resources, its own vision and desired goals become attainable?

If we use the metaphor of the body, organisational design is what bones, blood vessels, nervous system, muscles and sensory organs do in living systems. They ensure that we are in tune with the world and that our metabolism is supported, which also describes the “work” of a living system.

Similarly, organisations are there to organise work. This is a highly complex task, considering that they are operationally closed, i.e. for each action they connect to previous actions and at the same time have to cope with the internal-external discrepancy.  The question, therefore, is how customers and employees come into contact in such a way that value is added.

Naomi Stanford defines “organisational design” as “a systems approach to arranging how to do the work necessary to effectively achieve a business purpose and strategy whilst delivering high quality customer and employee experience”[4]. Oliver Schrader and I called it the “fabric of the organisation” in our book „The Rules of Leadership[5].

The term is intended to make the systematic interaction of all factors, levels and influences that occur within it visible and ensure that the desired, hoped-for output is produced. It describes the abstract body, a space that provides a vital framework for an individual and collective ability to act. Body here refers to all the forms that an organisation develops in order to enable work, such as communication, decision-making, coupling with its environments such as customers, partners, applicants, and to make them reproducible. Forms therefore concern intentional management or steering towards goals and – increasingly important – also informal or unintentional spaces.

Let’s take a closer look at the body of the organisation – since it is invisible, there is nothing else we can do.

How do the process steps interlock in such a way that excellent services and products are created for the customers? What are the contributions of the individual departments or divisions to this? This is what we call horizontal cooperation. How these teams and departments are set up and organised internally is called vertical cooperation.[6]. In sum, an organisation is the product of horizontal and vertical cooperation.

How this cooperation is qualitatively structured, what intensity it needs and how communication runs vertically and above all at the interfaces, determines the qualities of an organisation’s performance. It is completed and actually only made possible by informal communication and culture. All that happens spontaneously in the informal space, at the coffee machine or while gossiping after and before meetings.

Today we assume that informal spaces are responsible for at least 20% of organisational productivity. On the one hand, this can be shown in initial sociometric studies,[7] but it also coincides with our experience in our work

Informal communication has, among other things, another essential function. It is supposed to heal, to correct or concretise communication. This does not find enough space or cannot be addressed in meetings, target discussions and many other formal structures.[8] Among other things, this is also what we miss most when we communicate in virtual formats only.

Key questions about organisational design:

What principles should guide us if we want to design our organisation towards our vision in the best possible way?

What (formal / informal) “spaces” are we creating for this?

How is work structured and which (as few as possible) processes describe it best?

How do we design communication so that our relationships are successful and sustainable?

How are decisions organised? Who makes them, on what basis and how? And now, hand to god, who actually does?

What rules apply and which do we need? Which ones should we definitely leave out?

Sustainable Business Model

Next to strategy, the business model is another “holy cow” of top management. It is often treated as something that can be sketched out on the drawing board, something that is virtually predetermined by the market or the company, that is almost unchangeable and can hardly be actively controlled.

Very often we see that everything else around this business model needs to be changed, such as the culture, the processes or even that the skills of the employees should be better trained. On these issues, senior managers tend to be more aware that people should be involved. With strategy and the business model, this is often still different. This seems to be a technocratic “specialist task” of making calculations that are mainly driven by margins and profit. These are part of the business model, but by far not the only important one.

First things first: a business model answers the question of what customer promise an organisation wants to and can deliver, and how it can earn enough from it to be able to live on it in the longer term. The decisive added value today, however, is sustainability. Beautiful organisations build business models that answer a customer promise in a sustainable way, i.e. produce products or offer services that are regenerative and contribute to a better world.

This is particularly clear in the case of Patagonia. Yet companies like Eterna, a shirt manufacturer from Germany, are also focusing more and more on re- and upcycling, manufactured in Europe with sustainable cotton. For many years now they have gone without any form of advertising because that money can be used better for their employees, for development and innovation. And this example is only mentioned here as a representative example.

In business models today, it is no longer mainly about doing profitable business, but above all how this business is conducted and how responsibly it can be conducted. The challenge is enormous, but only companies that take it seriously will survive (economically) in the long run. This assessment does not seem very bold to me.

Especially in the last two years, the need for a sustainable, regenerative business model has become even clearer, as almost all sectors and companies are struggling with the worsening labour shortage. Among many other effects, this also causes young future talents to opt for those companies that are consistently and credibly dedicated to this topic[9].

Sustainability here is naturally also to be seen in the social dimension. Companies will have to offer people an inspiring environment that can offer meaning, flexibility and work on an eye level.[10] Only when the inside and the outside of companies are in congruence can the business be made sustainable in the long run.

Key Qustions about the Business Modell

Who are our clients? Who should they be?

How and with what do we create value?

What skills and mind-sets do our employees and managers need to do this?

What platforms do we use for this?

What does our value chain look like?

What technologies (communication, technical,…) do we need for this?

How regenerative is our production?

Contribution to the world

Humans obtain all the resources (food, oxygen, …) they need to produce life-energy (movement, intelligence…) from their environments. They get everything from their environments to create their lives. In other words, without an environment there is no life. Nature knows this, so it has developed a circular, regenerative ecosystem that allows it to survive well without taking more than it needs.

Just as this is true for nature, us humans and organisations of all kinds will have to take this to heart if we want to sustain (a good) life for ourselves on this planet. If we assume that organisations are embedded in their ecosystems and are in exchange with these as communicating organisms, this means that they have responsibility for all environments.

Responsibility for helping to shape these ecosystems in such a way that they are a viable environment for themselves and others, enabling all parts of this system to live (a good) life – out of pure self-protection and responsibility for society and nature.

„I bear responsibility for everything over which I have power.“

Hans Jonas [11]

If we pursue this idea to the end, it means that we should, even must, include the community and ecology as indispensable environments. One could also call them stakeholders. Concepts such as circular economy, regenerative economy, foundational economy[12] and many more are becoming established.

Every company is desperately looking for sustainability experts, and all the big consultancy firms in the world are building up huge business areas in this field, a development that is taking place at a rapid pace. Much of this has been triggered by the EU Green New Deal, the Taxonomy Regulation or the forthcoming Supply Chain Act, and many more steering measures will (have to) follow. If we imagine nature, fauna and flora, the climate and the community as people who live among and with us, this may become more vivid.

Let’s just ask them – systemic questioning techniques have the wonderful trick of triadic questions at their disposal. What would the stream that flows by our production site have to say about our products and the resources we need for them? What would the fields that used to be watered by this stream say?

Key Questions for our Contribution

What do we contribute to the world / society? What positive role do we play for the community from which we draw employees and customers?

How should our brand be perceived?

How is the environment (water, fauna, flora,…) affected by our products? How much do we take the interests of all living creatures into account? How much do we harm them?

If we take the SDGs relevant to us: on a scale of 0-100%, how well do we already meet them?

Where has nature but also the community around us benefited from our work?

What is our ecological and social balance?

In any case, the creation of jobs is not a sufficient argument here, since alternative jobs might even be worth more and make a greater contribution to a better world than those that already exist. Perhaps the capital tied up in labour has prevented even more innovative, ecologically sustainable products and technologies from being developed.

Summary

The steering model for organisations presented here is intended to provide orientation at a high level as to what is important in leading companies today. It is intended to serve as a compass that can always give us orientation as to where we are at the moment, what we are currently focusing on – what we are currently fading out, and whether these perspectives are sufficiently functional. At the same time, there are guidelines for very concrete decision-making questions that can or should be processed in dialogue within the organisation.

It is not a checklist, but a “metal map” to keep today’s relevant parameters in tension, to remain controllable in all ambiguity and uncertainty. It pleads for the re-entry of many factors that have been largely externalised until today. Such as social fairness, resource exploitation or even exuberant CO2 emissions, into the responsibility and thus the control of companies.

In this sense, this model is hopefully a contribution to seeing companies as an important, powerful part of the solution to humanity’s current problems. Because ultimately, the contribution of organisations of all kinds to a better world will have a decisive impact on the planet and our lives on it.

How positive, regenerative and socially sustainable it turns out to be will help determine whether we as humanity have a future. Does this sound exaggerated and excessive? I hardly think so.


[1] Fritz B. Simon: Eine Einführung in die systemische Organisationstheorie, 2007

[2] W.L. Gore, founder of the eponymous company

[3] Cf: Dannemiller, Tyson Ass.: Whole Scale Change, 1981

[4] Naomi Stanford: Guide to Organisation Design, 2007

[5] Schrader, Wenzl: The Rules of Leadership, 2015

[6] Cf: Dannemiller Tyson Associates: Whole Scale Change- Unleashing The Magic in Organizations, 2000

[7] Christoph Kucklick: Die granulare Gesellschaft, 2014

[8] A thought I owe to Gianpiero Petriglieri.

[9] Deloitte, The Deloitte Global 2021 Millennial and Gen Z Survey, 2021

[10] Lena Maria Glaser, Arbeit auf Augenhöhe, 2022

[11] Hans Jonas: The Imperative of Responsibility, 1979

[12] Institute for Multilevel Governance and Development, Foundational Economy Collective

Portrait von Lothar Wenzl

Lothar Wenzl

Systemic organisational consultant for profound transformation processes that help to create beautiful and successful organisations.

l.wenzl@trainconsulting.eu
+43 664 150 23 70