One of the comments that I got on LinkedIn on my article on Operating Models, stated that it’s easy to reflect on any of these components when you are building a new organisation, but it’s much more difficult when the organisation already exist. Organisational Awareness is the answer to this apparent paradox. In many ways, it always seems that organisation design tools are more suited for organisations that are not existing, rather than those that already live. Which is why we will also explore the concept of Emergent Organisation and mention a different perspective on the Organisational Lifecycle to spend a few moments then discussing at what level should we develop Organisational Awareness.
The term “Organisational Awareness” is used in different contexts with different meanings. A quite notable one refers to one of the primers that Daniel Goleman attributes to Emotional Intelligence. There are cases where this is defined instead as an individual skill, either in broader terms for students, or as a specific part of a competency model (for example the NIH one or the Canada one). In this article, I will try to explore Organisational Awareness as a capability of the organisation (which will also be reflected at the individual level). For this reason, let me formulate an initial definition based on the way this skill is defined in the accounting world.
Organisational Awareness is the capability of perceiving and understanding the different components of an organisation, both through its formal elements as well as through the informal patterns that emerge in the organisation. It also includes the understanding of political, social, and economic issues affecting the organisation and its environment.
Organisational Awareness is a critical capability for any organisation. It is a form of consciousness that the organisation develops as it continually adapts to the reality of its Business, the changes imposed by innovation and competition, the evolution of its external environment. It is a vital capability because let’s face it, most of the dimensions we have recognised in the Organisational Evolution Framework do not come from formal design effort, but are instead the result of a process of Emergence.
The concept of Emergence gets many usages recently in many domains (emergent technology, emergent strategy, emergent design), often understanding the meaning of “revealing a new aspect of something“. I will, however, use a more process-oriented definition, based on the work of sociologist Christian Smith who provided the following description:
“Emergence refers to the process of constituting a new entity with its particular characteristics through the interactive combination of other, different entities that are necessary to create the new entity but that do not contain the characteristics present in the new entity. ” (Smith, 2011)
In Smith’s work, the concept of Emergence is linked to four conditions:
“When these four things happen, Emergence has happened. The whole is more than the sum of its parts. (Smith, 2011)
Philosophically we could say that Organisations are temporal entities that are occasions of experience (Whitehead, 1929). We can, therefore, move from a general concept to a more specific one. Organisational Emergence (Wikipedia Contributors, 2019a) involves those activities and events that are undertaken before an organisation becomes an organisation (Edelman, 2008). This is the “in creation” period of the lifecycle of an organisation. The individuals who undertake purposeful actions to construct an organisation based on their vision are called “nascent entrepreneurs” (Aldrich, 1999). During Emergence, these people bring together resources and engage in activities that will eventually distinguish the Business as an entity that is separated from the individuals that built it (Carter, Gartner and Reynolds, 1996). A particularly interesting point of view on the Emergent Organisation is the link of it with communication, especially from the interplay of conversation and text. (Taylor and Van Every, 1999)
Emergence Theory has been very much linked to the concept of Start-Ups. Professor Jerome Katz from St. Louis University has been studying the way entrepreneurs build organisations for many years. In 1989 he published an article together with William B. Gartner where he proposes a framework that explains Organisational Emergence (Katz and Gartner, 1988). In it, the authors outline four basic properties of Emergent Organisations. These properties are as follows:
All of these properties are not independent one from the other, but rather live in the form of interrelation. And these four elements help understand not only how an organisation gets formed, but also how it develops over time in the initial stages. In a nutshell, there is already a body of knowledge that explores and investigates the Emergent Organisation and the way it performs. However, my analysis wants to focus more on the Emergence of organisational structure elements.
There are many theories and approaches to the way organisations develop over time. They go under the concept of Organisational Life Cycle (Wikipedia Contributors, 2019b). The issue is that, in most cases, they borrow their approach from Biology and focus their modelling on the performance of the organisation over time. However, organisational performance does not always link to the levels of Organisational Awareness, especially in the short term.
By observing many organisations, I believe we can trace two main stages in which organisational elements get formed, with various degree of Organisational Awareness. Each stage is then split into several phases, each outlining a different way in which organisational are dealt with within the organisation. These stages are not necessarily sequential, as they are heavily influenced by the level of Organisational Awareness that the company develops. I call this Organisational Awareness Lifecycle, an element to consider to better understand the Organisation Evolution Framework.
The first stage is pretty much connected to the concept we have seen of Emergent Organisation. Organisational elements are the result of a process of Emergent Design, which is often unconscious. Still, it reflects the definition of Emergence we used before. Let’s see the specific steps more in detail.
Many organisations never exit this state of Emergent Design perspective. Why? The reason stands in the soul itself of the Bureaucratic spirit: as Max Weber had described it, this is a phase that is strongly governed by a rational-legal mindset. All activities are focused solely on the execution of tasks. In this stage, typically “the best you can be is a perfect imitation of those who came before you” as Warren Bennis said (Sutton, 2016). The elements that are needed for an Organisation Design are put in place only as required. Nobody questions this aspect because the organisation is most efficient at this stage, and most elements exist simply because they exist elsewhere. There are Organisation Charts, Budgets, Strategy Documents, even an old Purpose hanging on the wall. I guess you recognise these elements on many existing companies. An easy “acid test” to verify at which stage we are is to talk with managers and HR professionals about their knowledge of the organisation. What you will discover immediately is a shallow and unevenly distributed level of Organisational Awareness. Which notably extends also to the nearby disciplines of Change Management and Organisational Development.
This is precisely the moment in a new stage start, that of Intentional Design: here, the organisation starts to intentionally design at least part of its organisation. Organisational Awareness is now needed to support the process and produce value. Based on my experience of observing several organisations, we can identify three stages:
You can easily recognise a firm that has achieved Consistency. Looking at separate details of their operations, you can identify the red-thread that links them together. Reward Policies are aligned to the Operating Model, and Strategic Objectives are cascaded, the Organisation Model is coherent with the Business the company operates in. All have been Intentionally Designed to support the execution of the organisation Purpose and Strategy.
Note: Increased Levels of Organisational Awareness do not necessarily correspond to more mature or innovative organisational models. A company in its nascent state can develop a very advanced organisation model without necessarily being self-conscious of this. However, if Organisational Awareness is not stimulated and expanded, the simple act of growing in size will push the organisation to create more conservative and traditional models. Stages and Phases are also not sequential, as many organisations can move forward (and sometimes backwards) through these.
I have been referring to Organisational Awareness as a capability that the organisation needs to develop. Why? Because in my view, it is very much an element that allows a company to build its unique DNA, and ultimately can constitute a competitive advantage.
Let’s see this through an example, which links us to the question that started this long article. Is it truly more natural to start an organisation with a full-fledged Intentional Organisation Design model, as opposed to an organisation where design emerges? The answer might be counterintuitive, as many researchers found out that emergent design is more effective. If we recognise that emergent design consistently produces the most robust results, why are implementations of predetermined structures so prevalent in large organisations? (Kaufmann, 2019)
The answer lies precisely in the capability I mentioned above. As you increase Organisational Awareness, you also increase the metabolic rate of your company to embed change in its organisation components. Should the Market steer the organisation at this stage? For some yes, “through market pull, focus on value creation and relentlessly remove org debt that is preventing customer outcomes” (Spurlin, 2019). Starting where you become a vital factor, together with the core capability is its ability to learn and adapt (Kaufmann, 2019) continuously
Which brings us down to the concept of Organisational Awareness also as an individual competence. I know, I have excluded this initially in my definition, but simply because I see this as a part of the whole.
Let’s start with a consideration: to become a leader at any level in this world, we need to be able to manoeuvre the complex human networks and patterns of influence, values, emotions and power that make up our organisation’s operating system (Leto, 2018). I find this an excellent definition of why we need to equip our Leaders and Managers with Organisational Awareness.
Goleman defines this as The ability to read the currents of organisational life, build decision networks and navigating politics (Goleman, 2000). A leader with organisational Awareness uses “his or her understanding of the nature of the relationships, hierarchies, and decision-making processes to communicate more effectively” (Pitagorsky, 2017). It is about the ability to integrate intuitive knowledge of how the organisation thinks and feels into the decision at hand (Leto, 2018)
Organisational Awareness means having the ability to read a group’s emotional currents and power relationships and identify influencers, networks, and dynamics within the organisation (Goleman et al., 2017). Which brings us back also to the importance of Collaboration and Networking.
What could be considered “organizational attention deficit” has symptoms such as missing data that leads to bad decisions, getting too little attention in the marketplace, and not devoting enough attention to where it should go. Well-focused leaders operate well at three levels. They have an internal awareness of factors that go beyond the usual key performance indicators (such as emotional climate and people’s collective enthusiasm). They understand how the organization relates to others, from suppliers to competitors to the key operators in its ecological niche. Finally, they understand the larger systems in which the organization exists—everything from the economy and technological shifts to social trends and relevant political forces.Daniel Goleman (Goleman, 2018)
I think it is clear that we should all strive to develop as much Organisational Awareness as possible. It might not be comfortable at the beginning, due to the complexity of how our organisations act today. We live in nested evolving systems (Huston, 2017) which might make the focus difficult. But the reality is not: we are asking people to simply understand the Business they are in, the roles they play, and how the organisation works. We are asking managers to manage, and ask HR professionals to think much more of the organisation performance rather than solely on the individuals.
And you? What do you think about your Organisational Awareness Levels?
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