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Business as organism, mechanism, or ecosystem

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It’s a jungle out there. Since I was young enough to be protected by Child Labor Laws, and probably before, managers have used this phrase to describe their working environment. It’s apt too often: The enterprise is organized, if that isn’t too strong a word, as an ecosystem in which employees at all levels interact [...]

By Bob Lewis | November 8, 2010
Topics: Industry Commentary, Leadership, Organizational Design, Organizational Effectiveness | 8 Comments »

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It’s a jungle out there.

Since I was young enough to be protected by Child Labor Laws, and probably before, managers have used this phrase to describe their working environment.

It’s apt too often: The enterprise is organized, if that isn’t too strong a word, as an ecosystem in which employees at all levels interact to further their own self-interest.

Furthering the interests of the enterprise is an accidental byproduct at best. More usually it isn’t a byproduct at all. The enterprise is left to look out for itself.

Business leaders have three powerful metaphors to choose from when constructing their organizations: ecosystem, mechanism, and organism. From all appearances, most choose unconsciously based on their personality, character, ego, and energy.

Ecosystems are to biology what marketplaces are to economics. They are spaces within which independent agents act so as to maximize their “utility” … their own self-interest.

Business-as-ecosystem is the logical choice for executives who think the marketplace is the solution to everything, because according to the set theory most of us learned in high school, “organizational effectiveness” is a subset of “everything.” Marketplaces are, however, no more the solution to everything than anything else is the solution to everything.

Marketplaces are just the ticket when what you need is an efficient way to balance supply and demand and you’re able to preserve competition among both suppliers and buyers. They’re a terrible way to focus energies on defined goals, though, because marketplaces have no goals of their own and aren’t supposed to. Their purpose is the exact opposite — to encourage all actors to operate independently to achieve their personal goals.

When businesses are organized as ecosystems, personal relationships are characterized by distrust, as they should be: Deer compete with each other for food and mates; meanwhile any deer that trusts a wolf is a dead deer.

And so, organizational ecosystems devolve to silos within silos within silos. It’s no way to run a railroad. Or any other organization, from an enterprise down to the smallest workgroup.

Many business executives, recognizing that siloization (it isn’t a word but it should be) inevitably leads to dysfunction, choose to view their organizations as mechanisms instead — collections of gears, cams, cogs, levers and buttons, connected so as to achieve a coherent result.

It’s business-as-automobile and business-leader-as-driver. It’s the view preferred by process consultants of all religious persuasions … lean, six sigma, lean six sigma, theory of constraints and whole-hog process re-engineering for the enterprise as a whole; ITIL for IT, and other process frameworks (I imagine) for other business disciplines.

All start by describing an organization as a collection of processes and sub-processes that feed each other’s inputs and use each other’s outputs to achieve the organization’s purpose (I’d have said “mission,” but missions lead to Mission Statements and that way lies madness).

What is that purpose? It’s the purpose of the executive in charge … the CEO for the enterprise as a whole and the other C-level executives for the organization’s major divisions.

Business-as-mechanism is far superior to business-as-ecosystem because mechanisms, whether they’re automobiles, power tools or computers, can and do achieve the purposes for which they’re designed, so long as they’re operated by people who (a) have the appropriate skills to use the mechanism; (b) know what they’re trying to accomplish with it; and (c) have chosen to try to accomplish something for which the mechanism is suitable.

Only the operator cares whether the organization achieves its purpose, though. The vision of each gear is limited to the gear turning it and the gear it turns in turn.

Contrast that with organizations that operate as organisms. Unlike mechanisms, the organism’s purpose belongs to every part of it. That’s what lets it adapt to changing circumstances. Feet build callouses, muscles harden and bulk up, skin tans when exposed to more sunlight — each part supplies its own energy and figures out the details of its operation on its own without subverting the overall purpose of the critter it’s part of.

Organizations that are organisms are rare because leaders willing to invest the effort to build them, and to forgo the gratification of being the sole driver, are rare. While evidence is sparse … Business Management theory hasn’t yet reached even the level of reliability associated with Economics … what evidence we have suggests organizations that operate as organisms are the most successful in both the short and long run.

The early Microsoft under Bill Gates is an example. It was a predator. Microsoft now, under Steve Ballmer, is by all reports an ecosystem.

Paints a picture, doesn’t it?


8 comments on “Business as organism, mechanism, or ecosystem

  1. Hmmm… Microsoft was a predator? Nah, a predator kills the prey that it gets its nutrients from, whereas Microsoft merely siphoned off part of its victims’ bodies and life energy, without giving much of anything back.

    So, Microsoft was not a predator, but a parasite.

    So now for the FUN question — what kind of parasite was Microsoft previously? And while Microsoft does indeed seem to be an ecosystem these days… if it WERE an organism, what kind of organism would it be?

    I’m plumping for: Microsoft WAS a tapeworm, but NOW it has mutated into a Giant Rafflesia (a.k.a. Corpse Flower).

    This can easily turn into an amusing parlor game. Apple is very clearly an organism; perhaps some kind of prairie grass. Or maybe dandelions, or clover. Productive, invasive, unstoppable. Computer Associates, maybe a particularly nasty remora. Oracle, now THAT might be a predator of some kind; maybe the tarantula that’s so huge that it kills and eats small birds.

    And then there’s Morgan’s Sphinx, the giant moth with the 10-inch wingspan and 13-inch tongue. A very specialized creature, in a very specialized niche. Red Hat? Or maybe it’s IBM!

    This is fun!

    • Not sure if Apple is an organism or a mechanism. I don’t know enough about it to have any idea whether it would continue to thrive without Jobs at the helm.

  2. Absolutely loved the post! David’s comment is excellent too :)

  3. Sheldon Bird on said:

    This is spot-on, Bob.

    Discussing it with our ITIL/Lean black belt:

    Him: “It is a good article. I am not sure he is telling us what to do if you don’t have the culture or leadership focus of an ‘organism’ (fyi – mold is an organism too) – That’s why I vote for mechanism (structure) every time and then temper it with seasoned leadership. If we don’t build out our mechanisms, we can end up a very different organism that they one we’d like to become.”

    Me: I don’t want to discount the benefits of well-oiled machines that are suited for the tasks they have to perform, or the skills of those who build and operate those machines. The point I got was the tendency for the individual machines to 1) work independently and without much regard for other machines; and 2) to operate in their own self-interest, which is not necessarily the interest of the enterprise. That is where management art comes in: Understanding the reasons why we exist and where our focus is, and aligning our self-interest with those reasons. Keeping everyone mindful. Teaching how inter- or co-operation is win-win. Helping one another move from good to great. Understanding that when some other unit does well, it isn’t at my expense. That it’s good to trust. All that stuff. ITIL is important, but it isn’t about these soft things, without which we are doomed to organizational mediocrity and a tendency to wear out the excellent people.

  4. I think you are spot on. I now work with small to medium-sized businesses because they have the greatest chance to be an organism instead of the alternatives. (I have been in the big ones and you have them nailed.)

    In fact, I advocate them discovering their mission (purpose) so that the whole company can act like an organism in working to achieve it. Further, it lets those in charge weed out the parasites (ones who aren’t on-board with the purpose) while encouraging the diversity that an organism needs to meet the challenges of an ever-changing world.

  5. What a great resource!

  6. Paul Turbitt on said:

    Love the article, I am trying to determine if there is any research out there long the lines of John Nash’s equilibrium theory. I am wondering if you are aware of any models that discuss the benefit of high performance teams inside an organization. I have a theory about how self sacrificing teams can outperform teams that have “self interested” team members, but have been unable to find anything to support the premise. If anyone has material that they could point me to, I would greatly appreciate the guidance!

    Paul Turbitt

    • Too deep for me. I imagine your theory of self-sacrificing teams might be supported by a look at military experience. Not sure the parallels between combat and business are strong enough to carry over, though.

      And in any event, asking any employee for self-sacrifice for the “greater good” of shareholder value assumes the company has hired chumps. Even if they fall for it, they’re chumps, which probably obviates any advantage the self-sacrifice model might provide.

      What I think works best is a very old notion: Mutual loyalty between individuals, teams, and the entire organization.

      I can’t cite any research either way on the subject, though, other than the research demonstrating that companies with strongly engaged employees perform much better than companies without, and my inference as to what’s required for a company to earn the engagement of its workforce.

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my photoBob Lewis is a senior management consultant with Dell Services. He has published these columns once a week in one form or another since 1996.

Disclaimer: All opinions, statements, representations, allegations, images (if published) and anything else that appears here is the sole responsibility of the author. Dell has and had nothing to do with it, other than saying it's okay to continue publishing KJR.

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