Hack:
Finding and Expanding the Organizational Sweet Spot

Increasing innovation and productivity requires finding the organizational sweet spot and expanding it. All firms have a sweet spot— where the formal and informal systems overlap and selt-managenet rules. Engagement and performance peak there because activities are grounded in informal, co-evolving relationships and not by rank. See UnManagement.com.

Introduction

We need to remember that there are no two people on this planet who are physiologically (mentally or physically) identical. Therefore, each person must first interpret a given situation (process, problem, opportunity or work environment) in their own particular way before they can or will take some action. 

Engineers can develop efficient processes and systems but there is no such thing as a perfect social system or network. Some people still think they can develop efficient social structures. They are, unfortunately, pursuing a fairy tale. 

Complex adaptive systems (self-organizing systems) such as social systems or networks develop certain distinguishable patterns (dynamic order) over time but those patterns are in constant motion. For instance, it only takes one person in a complex adaptive system (network) who happens to have a "bad day" to change the particular dynamics of that network.

It's best to remember that people are not machines by any stretch of the imagination. That's why more education and training or trying to change a culture can only take an organization so far. It can never lead to some form of total perfection when it comes to social systems. For example, "Does every pilot fly the same plane exactly the same way?" That, of course, is an impossible feat.

There is, however, a big difference between dynamic order and chaos when it comes to social systems. Nevertheless, let’s not deceive ourselves into thinking that we can somehow develop perfectly functioning social systems. One doesn’t have to look far to see the misery we create by treating people like machines. 

Unless a business eliminates all people (is totally automated) it will always have an informal self-organizing social system that will exert a tremendous amount of influence on its operations. So, one really has two choices: ignore such emergent networks and let them function clandestinely or develop an organizational context or ecology that will “influence” most of the informal networks to support the business’s goals. 

The Organizational Sweet Spot

Greater emphasis needs to be placed on expanding what I call in my latest book (www.UnManagement.com) “the organizational sweet spot” where the formal and the informal systems overlap. That is, under the right conditions, the informal components will begin to overlap more and more with the formal elements of an organization’s systems, processes, applied technologies and general management. 

This overlapping spot, in essence, represents the area where the formal and informal systems of an organization have reached “a meeting of the minds” over the fundamental goals, policies and processes. What is particularly noteworthy about this agreement is that it is not reached through any sort of formal negotiation. Rather, it’s emergent. Consequently, it’s in the sweet spot where most of the productive work and innovation takes place.

Thus, the sweet spot is a very desirable state for any enterprise. It’s a natural outgrowth of day-to-day interactions or “self-organization” of goal directed people in the “Un-Management” realm of a venture. More precisely, the un-management sphere of influence of an enterprise encompasses two vital areas. They are the sweet spot and the rest of the informal networks. Hence, organizational leaders should try to make every effort to design work contexts that “encourage” members to participate as frequently as possible in the sweet spot activities.  

Inherently, leaders should learn how to “unmanage” more and place less and less emphasis on traditional management founded on control and compliance.  Unmanagement is based on the proven theory that human productivity is at its peak in “naturally” occurring networks and relationships as opposed to within formal systems where people are stifled by bureaucracy and not allowed to work openly with their counterparts and peers.

Most people will support formal organizational goals if they understand how the goals benefit the business, its customers, society as a whole, their fellow workers, and themselves. It’s surprising how many employees in general are clueless of such outcomes. Therefore, one can have a very productive and engaged workforce when you treat people humanely and when they grasp the benefits cited above.

The key to success is to fully understand what can and can’t be controlled within social systems. What we need to fully grasp is that organizational contexts can be managed or adjusted but not the people who work and function within those work environments, especially when it comes to the sweet spot.

The reason for that is straight forward.  People’s mindsets and relationships are emergent and thus can’t be managed. That is, they can be influenced but not controlled. Unfortunately, that subtlety as to what can and can’t be controlled in a work environment is still hard to grasp for most people.   

Accordingly, for productivity and innovation to thrive, people need to be immersed in flexible biophysical and social environments. Consequently, it shouldn’t come as a great surprise that traditional management concepts seldom work well any longer, especially when it comes to knowledge workers. This is mainly due to the continued use of a cause-and-affect machine metaphor when dealing with workers. But people are not machines. They are organic self-organizing entities from their DNA molecules to their interactions with other people.

The Two Organizational Ecologies

Every organization has a sweet spot or multiple sweet spots. In most organizations, however, the sweet spot is rather small. We need to keep in mind that at the sweet spot most activities are based on reciprocal relationships, valued differences, and respected individual identities. The pursuit of creativity and innovation is enhanced through the persistent encouragement of constructive dissent in an atmosphere of mutual trust. One of the great attractions and positives of working in a sweet spot is that everyone is actively engaged in assuring that all activities, resources, and rewards are “equitably” managed by all participants. 

So what are the primary choices we have when it comes to organizational ecologies or contexts? In my first management book, Unleashing Intellectual Capital (www.UnManagement.com), I placed organizational structures into just two very broad general categories: controlled access systems and shared-access systems. In this classification scheme, a controlled-access system, whether tall or flat, is an organizational framework wherein one individual or a very limited number of people exclusively control access to all major resources including the workforce. All other members of the organization must first get approval from these top people before any of the assets can be used or invested. 

In a controlled-access system position power is the predominant force behind all key decisions; hence, “open” self-organizing arrangements are not encouraged or valued, limiting the development of high levels of “voluntary” goal directed social connections. In other words, compliance instead of commitment is prized in such organizations. Clearly, in such a context a considerable segment of the workforce can becomes disengaged from their designated tasks. 

In contrast, in a shared-access system all organizational members have considerable autonomy in decision-making and in resource allocations including hiring and firing of people. In a shared-access system, expert power instead of position power dominates. Thus, major emphasis is placed on situational leadership, open book management, and self-organization in solving problems or in pursuing opportunities. Here, personal commitment rather than compliance is the dominant success factor and most people are productively engaged in their work. 

The message for today’s organizations is that since they must interact with a constantly changing, information-rich and complex environment, they must be equally multifaceted and flexible in order to survive. Thus, the long-range goal of any organization should be to function like a shared-access rather than a controlled-access system.

Conclusion

In today’s Knowledge Age organizational leaders need to reach beyond the “management toolbox” and leadership mindset of the Industrial Age. In doing so they may realize that complex adaptive systems, such as social networks, can be influenced but not managed very effectively. In essence, the key to success in today’s rapidly changing global environment is to grasp the fact that there is a duality to organizational effectiveness. Thus, enterprises that will continue to stay on the controlled-access continuum may not prosper as well as those that jump on board the shared-access continuum. Inherently, leaders should learn how to “unmanage” more and place less and less emphasis on traditional management founded on control, compliance and even fear.