“This all sounds great. But it’s just not realistic.”

This is what a group of five senior IT executives told me during a workshop I held not long ago. We were working through an exercise on the organizational characteristics necessary to successfully execute a digital transformation, and the group was doing their ‘readout.’

The executives loved everything we discussed and agreed that if such an environment existed, it would make transformation much easier. They just didn’t believe it was realistic.

Our job as analysts is not only to observe the world as it exists, but also to paint an aspirational picture of how it might be.

As a result, we spend a lot of time and commit a lot of digital ink to discussing emerging technologies and approaches, and their potential impact on how organizations will operate and function.

In many cases, the mere act of examining an emerging trend and exploring its potential implications is enough to help our readers see things in a different light and begin to imagine a different future.

Some areas are more difficult than others to tackle — and some meet with outright resistance. And the topic that seems to meet the most resistance now may also be the most important: self-organization.

The Self-Organization Challenge

As we examine the many facets of digital transformation, we must also explore the mindset shifts necessary to make this transition.

One of those shifts is the need to move from the slow-moving and bureaucracy-laden hierarchical models of the industrial age to the self-organizing management models that the digital era requires.

Jason Bloomberg, president of Intellyx, in fact, devotes a significant portion of his forthcoming book, Agile Digital Transformation, to this topic and we dedicate a lot of space in the Cortex and our articles for Forbes and our blog to helping business and IT executives understand the importance of this shift.

Nevertheless, the move towards self-organization appears to be an idea that executives just can’t seem to get their head around.

During that same workshop, two separate executives pulled me aside and questioned my call to embrace the flattening of the organizational model and the need for self-organizing teams.

“Some people — most people, really — don’t want to make decisions or take control,” one executive told me. “They just want to be told what to do.”

As anyone who has ever held a management position knows, there is a lot of truth to this statement — at least on the surface. It can indeed seem that employees are unwilling to stand up and step forward. For a hard-charging and change-minded executive, it can be very frustrating.

But it is not a lack of desire that causes this apparent lack of ambition. Instead, it is a lack of faith that things will actually change which results in employees’ unwillingness to take the initiative and assert control. Why put yourself out there, the thinking goes, if this is just another in a long line of management trends du jour.

This unwillingness of teams to take the initiative, however, will be the death knell of any self-organizing effort. To overcome this challenge, therefore, executives need to step back and recognize that to achieve this vision of self-organization — which will be critical to their transformational efforts — they must create a new reality.

Innovation’s and Self-Organization’s Common Dilemma

There are two forces at play, however, that hold organizations back from transforming their culture and creating a new reality that will be conducive to self-organization — and which wildly popular business books have already well documented.

In 1997, Harvard Business School professor, Clayton Christensen, released one of the most influential business book ever written, The Innovator’s Dilemma. Yet twenty years later, many organizations are still unable to overcome the dilemma.

In his book, Christensen explains that large enterprises fail to innovate not because they do not recognize the innovation or because they are unable to re-organize around it. Instead, he reveals, executives have built their incumbent enterprises to maximize value and meet ever-increasing growth demands — and innovations, in that context, fail to meet return-on-investment (ROI) expectations and so are left to languish.

In effect, the very systems that enable large enterprise organizations to flourish and grow also ensure that they will undervalue and disregard the innovations that will ultimately disrupt them.

Self-organizing initiatives run into precisely this headwind. While executives may recognize their inherent value and promise to help meet the rising demands of the digital era, these self-organizing management models introduce high levels of risk and do not guarantee the kind of ROI that corporate management models expect. As a result, executives may dabble and experiment, but they otherwise resist the full-throated embrace of self-organization that digital transformation demands.

But even if an executive musters the courage to pursue self-organization, they run into the second force of resistance: apathetic teams.

Misaligned Motivators Undermine Self-Organization

The corporate structure of the industrial age was purpose-built to turn employees into replaceable cogs in the corporate machine. Reliability, repeatability, and consistency have been the most valuable employee traits for generations.

While organizations have always paid lip service to the value of ingenuity, ambition, and risk-taking (at least over the last thirty or forty years), the reality is that these traits only served you as long as everything worked out in the end. As soon as things turned sour, that ingenious, ambitious and risk-taking employee was often looking for employment elsewhere.

Conventional wisdom was that employees responded best to positive/negative reinforcement models — the proverbial carrot and stick. And, as we all know, we are much more likely to want to avoid the stick rather than to pursue the carrot. As a result, the industrial age created generations of risk-adverse employees who were trained to keep their heads down and to go-along to get-along.

Daniel Pink exposed the fallacy of this approach for the modern era in his 2009 book, Drive. In it, he explained that while extrinsic motivators (carrots and sticks) may be useful for routine, repeatable tasks, they were woefully ineffective for jobs that required cognitive skills, decision-making, creativity, or higher-order thinking.

For these tasks, employees require intrinsic motivators that he defined as autonomy, mastery, and purpose. It is, therefore, not surprising that so many executives find a seemingly unmotivated, unambitious staff. Unless and until organizations remove the extrinsic motivators (particularly the sticks) and replace them with intrinsic motivators, self-organization will remain a pipe dream.

The Intellyx Take

Digital transformation is a big, hairy quagmire of a business challenge. It represents an effort that will likely define the success — or failure — of an executive’s career.

As a result, many would-be transformative leaders blink and, rather than pursue true transformation, instead settle for incremental change dressed up in the language of digital transformation.

These executives point to the intractability of their corporate culture, the rigidity of their organizational processes and procedures and the unwillingness of their employees as the reasons they cannot execute real, transformational change by adopting self-organizing models.

While the challenges are real, they are also well understood. It is not a lack of knowledge or capability that stops organizations from adopting these new models. It is merely the lack of courage to create the new reality that embraces innovation, creates space for new approaches and provides their employees the freedom to experiment.

Fully embracing self-organization is a considerable risk, to be sure. But the risk of not acting is even greater and growing every day.

Copyright © Intellyx LLC. Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers.

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  1. […] This article was originally published in the Intellyx Cortex newsletter. […]

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