Organizational intelligence describes how well a group of people learns together, questions itself and supports change. Three factors promote it: real challenges that weld a team together, regular reflection on one’s own way of working and diversity that integrates different ways of thinking instead of sorting them out. Efficiency and adaptability are in constant tension.
Key Takeaways
- Retrospectives are the strongest lever for organizational change because they force teams to regularly step outside the system and question their own way of working.
- Efficient organizations are particularly susceptible to external shocks because their structures, trimmed for optimization, leave little room for adaptation.
- Growth itself is a driver of change: above a certain team size, previous organizational structures no longer work and require a fundamental realignment.
- Freedom to innovate, such as temporary, cross-functional teams, can bring a start-up culture to established companies, but often fail because too many good ideas are generated and hardly any are implemented consistently.
Are organizations stupid or intelligent?
Organizations can be seen as organisms that develop their own consciousness and culture. This view sounds grandiose at first, but it helps to understand why some companies work and others hurt.
The human body consists of many small cells in which proteins work with high precision, billions of times and simultaneously. The neocortex, the upper layer of the brain, comprises around 20 billion cells, which together make up part of consciousness. Each individual cell knows nothing of the whole.
Transferred to eight billion people, one question arises: do people together form something like a meta-organism? There are communication channels such as the Internet, logistical pathways such as highways and flight routes, a financial system as a nervous system. Would individual people even notice a consciousness of humanity? The same question applies on a small scale to every company. What is the consciousness, what is the culture of an organization?
A good organization is also good for the individual
In a good organization, it is not only the organization that is doing well, but also the people in it. That is the central thesis, and it cannot be taken for granted.
A company can generate high profits without its employees being well. In purely business terms, the well-being of the individual would be irrelevant. Johannes Mainusch contradicts this logic with a clear claim: people have a right to be well, and this claim also applies within organizations in a democracy.
Experience supports this. Everyone knows phases in which work went hand in hand, full of energy and purpose, so that people remember it fondly for a long time to come. And everyone knows the opposite: organizations that don’t let you sleep at night, where you feel annoyed or restricted. Where things were going really well, the individual people were usually doing well too.
What makes the difference between good and bad organizations?
Good organizations share some recurring characteristics, even if there is no patent remedy. These characteristics can be named, but their effect cannot be guaranteed.
- Challenge: A big task with an uncertain outcome often acts as an incentive and welds a team together. If everyone knows that the chances are 50 percent, there is room to try something new.
- **Learning through mistakes: Repeating something, making mistakes, doing it again until it works better. Going through crises is also part of this.
- Respect, not permanent harmony: A good atmosphere must be respectful, but not conflict-free. When everyone wants something, opinions clash. It is important to find a way out of arguments and discourse.
- Diversity: Weird birds that come together often make a good team.
Much of this is reminiscent of the agile concepts of the last two decades: diversity, lots of communication, a tangible yet ambitious challenge.
The helicopter view as a lever for change
Those who regularly step out of the system and look at it from the outside recognize blind spots and can make more targeted changes. This in and out is an effective principle.
At team level, agility provides a simple tool for this: the retrospective. Sitting down together regularly and talking about how work is going and what you want to change is a powerful lever. In practice, retrospectives are often the point at which change actually gets underway, because you take the time to see the whole picture as a whole.
Some organizations are inexperienced in taking the reins themselves. They wait for announcements instead of launching their own initiatives. This is exactly where the difference lies with groups that say: this is what we want to do, this is what we are going to try out.
How does a movement develop in an organization?
There is no magic formula for movements with a positive outcome. What remains are the conditions under which something like this can arise.
One example is the Solution Lab at Hanseatic Bank in Hamburg. A cross-functional team of seven people worked full-time on a problem in isolation for four weeks and then came back with a solution. The bank institutionalized this as an innovation format and carried it out 10 to 15 times. It brought a start-up spirit to an established company and it worked. However, this kind of freedom is a luxury that an organization must be able to afford.
Movement also arises from a crisis, when an emergency situation forces everyone to abandon everything else and save the ship from sinking. This harbors a danger: once you have experienced the positive effect of a crisis, as a manager you can become a crisis maker and punch a hole in your own boat just to artificially create momentum.
Effectiveness and efficiency are often mutually exclusive
Efficient organizations find it difficult to change because their strength lies precisely in optimizing what already exists. This is the core of the tension.
Effectiveness means achieving something. This can be expensive, but can bring great benefits if you are prepared to try things out in an open constellation. Efficiency, on the other hand, means trimming out the existing business to such an extent that it runs extremely cheaply.
An efficient organization can deliver a letter throughout Germany for just a few cents. That is a strong barrier to market entry. But if the environment changes, it is precisely this fine-tuned structure that has a problem. An apt metaphor for this: change in a highly efficient organization is like leaving an anorectic marathon runner at the North Pole. He is freezing and not feeling well.
Agility in a changeable environment increases the chances of survival, but costs efficiency. The dinosaurs had a hard time after the meteorite impact, the mice came through. In a stable market, the efficient big companies do the big business, the agile ones scramble along. When the impact comes, the advantage is reversed.
Why does growth make organizations sluggish?
Growth is itself a change driver, an internal one, not an external one. Success forces change, whether you like it or not.
This is clearly evident in IT. A startup often begins with a backend and a frontend team, the logical separation of database and interface. Up to around 20 people can be scaled well in this way. Beyond that, the horizontal division no longer works, and concepts such as verticalization or domain-driven design require teams that are set up vertically instead of in layers.
At a certain point, this means a 90-degree rotation of the entire product organization. Then there is the software that the startup built quickly and that brought in the venture capital, but is now becoming a burden. Growth therefore forces you to let things go and throw them away. This shift is difficult for people who feel comfortable in their previous work, which is why management often rotates and people leave during such phases.
The Lone Nut and the first follower
A movement needs two roles at the beginning: the crazy person who starts something unusual and the first person who joins in. This pattern is shown in the well-known video of the dancing individual at a music festival.
At first, one person is dancing alone on the grass and everyone thinks he has to go. Then a second person comes along and joins in. Shortly afterwards, the masses rush in and dance off. The important point is that you need this lone nut and, above all, the first follower. By the time the movement becomes a mass thing, those who started it are often no longer involved.
What to do if you’re the crazy one in the organization?
If you like to change and try out new things, you will inevitably experience pain. It’s part of the job and can’t be trained away.
When an idea gets bigger, at some point people think, what is he doing again, can’t he even stop? That hurts because you are introducing your own change into a system that is rubbing against itself. And it hurts to let go when things go back to normal and you would have done it differently yourself.
Don’t let yourself become hardened during this tough time. Stupid things happen in life, disappointment and stuff that isn’t so good. Just keep your spirits up.
Johannes Mainusch
The practical advice is sober: If you’re like this, you’re like this and you’re going to suffer. Don’t harden up, don’t lose your cheerfulness. It will get better, and if it’s not good yet, then it’s not over yet.
