In 2016, a study conducted by Deloitte drew our attention. Deloitte's survey "The New Organization: Diverse by Design" on 7,000 respondents in more than 130 countries generated very interesting results: 82% of large companies are currently reorganizing, planning the reorganization or have recently reorganized to respond to customer needs most effectively; 92% of the companies interviewed cited "redefining the way we work" as one of their key challenges, making this the trend or the worry of the year; 90% of companies cited leadership as a primary problem and almost two-thirds of all respondents saw this problem as "urgent". Only 19% of the sample believed they have the "right culture".
Of course we knew from direct experience that many companies were going through their umpteenth reorganization and that many had problems related to leadership and culture. But the size of these numbers really impressed us. And since then we have started to think differently about how we could help our customers be healthier from an organizational, cultural and structural point of view NOT to survive, but to thrive in the next ten years.
it's been a few decades since companies try to overcome their problems by implementing change initiatives such as Total Quality Management, the matrix structure, the flattened structure, Lean iitiatives, agile initiatives, smart working, organizational culture change.
Research so far shows that only 30% of change initiatives express their full potential .. and it is interesting to note that this percentage has not changed in the last 20 years :-)
So much has been written about the reasons that lead to these results but in our opinion, little has been said about the main reasons why, in our point of view, the change process does not work as it should: the hierarchical system, by itself, reinforces precisely those dynamics that the company wants to get rid of.
The idea that an organization's structure and systems change people's behavior is not new. Chris Argyris, professor emeritus at Harvard Business School was among the first to argue that a hierarchical structure paves the way for a transition from active to passive behavior. , from self-management towards dependency, from equal to subordinate. Other scholars suggest that hierarchy provokes conservatism, conformity, the domination of individuals, low performance, low morale, and diminished innovation.
When initiatives like Agile, Lean and now Smart Working are adopted by organizations whose leadership has a dominant hierarchical perspective, these working philosophies become at best just a process improvement to increase efficiency, profits or productivity. Without ever reaching their true potential or, in many cases, failing. In the presence of hierarchy, only those practices that align with the hierarchical way of thinking and which are consistent with a hierarchical mentality are adopted.
AEquacy is a revolutionary human-centered, hierarchy-free organizational design that paves the way for greater innovation, collaboration, and performance.
AEquacy can be displayed as a radial, equalitarian structure of self-organizing, peer-coordinated teams where people can perform at their best because they have total control over their work, clarity about the organizational direction and access to all information to make the best decisions.
We chose the name AEquacy (from the Latin aequum: equality, fairness) to emphasize the absence of hierarchy and the equal right of all members of the organization to participate in the decisions affecting their work.
By adopting AEquacy small and large organizations could be better equipped to tackle complexity, to increase agility, to foster innovation, and to respond much more rapidly to internal and external challenges.
AEquacy is based on a framework of four pivotal elements:
1. The creation of an appropriate enabling context, consisting of
- A self-organized team structure that works with autonomy by enhancing the corporate purpose
- A coordination system based on equal and non-hierarchical relationships
- Distributed authority, allowing decisions to be made faster
- Extended financial responsibility to each team
2. The development of essential values able to support the new structure:
• Mutual trust, fundamental in the absence of a formally established control function
• Sense of mutual responsibility between colleagues and towards the company
• Spirit of cooperation
• Continuous learning - Attitude to constant improvement
3. The implementation of smart systems that strengthen the organization's working practices and simplify them
• Radical simplicity, aimed at avoiding the return of bureaucracy
• Decisions based on consent, which allow greater alignment between team members without slowing down the processes
• Peer feedback cycles that replace the old performance management system
• information Free flow, which allows everyone to increase innovation and better tackle problems
4. The development of personal and team mastery. To ensure optimal performance in the new model, each member of the company must acquire:
• Personal mastery, to be able to work independently without hindering colleagues in achieving their goals
• Systemic awareness, ie clear vision of team dynamics and the whole organization
• Ability to collaborate effectively with colleagues
- Team management skills because each member now shares the responsibility to manage the team
The benefits of AEquacy are:
• AGILITY: The systems are made radically simple and we trust that the Associates act in the best interests of the organization. Peer pressure and adherence to organizational purpose and values guide decision-making processes;
• SPEED: operational teams are quick to seize market opportunities and manage problems, because they do not need to wait for the line of command to take action;
• COLLABORATION: the teams collaborate spontaneously in the absence of departmental boundaries;
• INNOVATION: Each team feels invited to be creative to bring greater value and results.
• PERFORMANCE: financial and operating performance are potentially maximized through a self-regulating system that exploits the potential of each individual team.
All the 70 managers and executives that have experienced AEquacy so far assessed their performance in the aequacy environment much higher compared to their performance in a hierarchical environment in all these dimensions of performance:
Client Service: +153%
Employee accountability: +67%
Employee engagement: + 94%
Financial performance: +380%
The situations where AEquacy could be introduced in an organization are generally of two kinds: either the company is a start-up, an organization that is still to be born or has just been created, or the company has been around for a while and already has a more or less ingrained structure, culture, and processes.
The steps for introducing an aequal structure don’t really differ that much in the two contexts. In the former situation the adoption of AEquacy is often facilitated by the fact that the company is like a blank canvas, with no pre-existing procedures, rules, habits, or beliefs that need to change. In the latter, when the company has been up and running for some time, the introduction of AEquacy transforms not only structures and systems, but also the established ways in which people work, collaborate, relate to each other, and perform, as well as their psychological contract with the organization. In this context the transition process can be seen as an entire system change, demanding higher levels of complexity in comparison to the first scenario.
When we started to design the best course of action to support an organization to adopt AEquacy, a few principles were absolutely clear to us, and we built the sequence of implementation phases around those principles:
Contrary to the way most change programs are implemented, with AEquacy all the employees, or a broad representation of them, should be engaged from the beginning in the decisions, in the design and in the planning of the new design.
Bridging organizational change with people’s needs and desires.
Creating a connection between the deeper needs and desires of employees and the higher scope of the change (which should include the meaning of the change for society, for customers, for the company and its stakeholders, for the team, and for the individual employees) can trigger a shift in perspective and behavior. It is important to give change a personal meaning for employees.
The AEquacy implementation model has been crafted on the principles of Design Thinking. This means that the focus is on an iterative process.
In its initial phase, AEquacy is introduced to sponsors and employees who will have the opportunity to experience working in both a hierarchical and an aequal environment. This first step enable us to check whether people are ready or willing to embrace AEquacy and whether an aequal design is the solution that will create value for the specific organization, based on a number of criteria.
Giovanna D'Alessio and Stefano Petti, Partners, Asterys