Organizational intelligence describes how well a group of people learns together, questions itself and carries change. Three things strengthen it: real challenges that pull a team together, regular reflection on how the team works, and diversity that brings different ways of thinking in rather than filtering them out. Efficiency and adaptability remain in constant tension.
Key Takeaways
- Retrospectives are the strongest lever for organizational change, because they make teams step outside the system on a regular basis and question how they work.
- Highly efficient organizations are especially vulnerable to external shocks, because structures tuned for optimization leave little room to adapt.
- Growth is itself a driver of change: past a certain team size, the old organizational structures stop working and need a fundamental rethink.
- Innovation spaces such as time-boxed, cross-functional teams can bring startup culture into established companies, but they are a luxury that an organization has to be able to afford.
What Is Organizational Intelligence?
Organizational intelligence starts with a simple shift: you can look at organizations as organisms that develop their own consciousness and their own culture. That sounds like a big idea at first, but it helps explain why some companies work well and others are painful to be part of.
The human body is made of countless small cells in which proteins work with great precision, billions of them at the same time. The neocortex, the brain’s outer layer, has around 20 billion cells that together make up part of our consciousness. No single cell knows anything about the whole.
Scale that up to eight billion people, and a question follows: do humans together form something like a meta-organism? There are communication channels like the internet, logistics routes like highways and flight paths, and a financial system acting as a nervous system. Would individual people even notice a consciousness of humanity? The same question applies on a smaller scale to every company. What is the consciousness of an organization, and what is its culture?
A Good Organization Is Good for the People in It
In a good organization, it’s not just the organization that thrives, but also the people in it. That is the central claim, and it is far from obvious.
A company can make large profits while its employees are miserable. From a purely business point of view, individual well-being wouldn’t matter. Johannes Mainusch pushes back on that logic with a clear standard: people have a right to be well, and in a democracy that right also holds inside organizations.
Experience backs this up. Everyone knows stretches of work where things just clicked, full of energy and purpose, the kind you remember fondly for years. And everyone knows the opposite: organizations that keep you up at night, where you feel frustrated or boxed in. Where things went really well, the individual people were usually doing well too.
What Makes the Difference Between Good and Bad Organizations
Good organizations share a few recurring traits, even though there is no recipe. You can name these traits, but you can’t guarantee their effect.
- Challenge: A big task with an uncertain outcome often spurs people on and pulls a team together. When everyone knows the odds are fifty-fifty, there is room to try something new.
- Learning from mistakes: Doing something again, getting it wrong, doing it again until it works better. Going through crises is part of that too.
- Respect, not constant harmony: A good atmosphere has to be respectful, but not free of conflict. When everyone cares about something, opinions collide. What matters is finding your way back out of the argument and the debate.
- Diversity: Odd birds who come together often make a great team.
Much of this echoes the agile ideas of the past two decades: diversity, lots of communication, and a challenge that is tangible yet ambitious.
The Helicopter View as a Lever for Change
People who regularly step out of the system and look at it from the outside spot blind spots and can change things more deliberately. This in and out is a powerful principle.
At team level, agile offers a simple tool for it: the retrospective. Sitting down regularly to talk about how the work is going and what you want to change is a strong lever. In practice, retros are often where change gets started in the first place, because the team takes the time to see the whole picture.
Some organizations have little practice in taking the initiative themselves. They wait for instructions instead of starting things on their own. That is exactly what sets them apart from groups that say: this is how we want to do it, let’s try it now.
How a Movement Starts in an Organization
There is no recipe for movements that turn out well. What you can describe are the conditions under which they can emerge.
One example is the Solution Lab at Hanseatic Bank in Hamburg. A cross-functional team of seven people worked full-time and in isolation on a problem for four weeks, then came back with a solution. The bank made this a standing innovation format and ran it 10 to 15 times. It brought startup spirit into an established company, and it worked. Space like that is a luxury, though, and an organization has to be able to afford it.
Movements also grow out of crises, when an emergency forces everyone to drop everything else and keep the ship from sinking. That carries a risk. A manager who has once seen what a crisis can do may turn into a crisis maker and knock a hole in their own boat just to recreate the momentum.
Why Effectiveness and Efficiency Often Exclude Each Other
Efficient organizations struggle with change, because their strength lies in optimizing what already exists. That is the heart of the tension.
Effectiveness means achieving something. That can be expensive, but it can pay off big if you are willing to experiment in an open setup. Efficiency means trimming the existing business down until it runs extremely cheaply.
An efficient organization can deliver a letter anywhere in Germany for a few cents. That is a strong barrier to market entry. But when the environment changes, that stripped-down structure is exactly what gets into trouble. A fitting metaphor: change in a highly efficient organization is like dropping an anorexic marathon runner at the North Pole. He freezes, and he is not doing well.
Agility in a changing environment improves the odds of survival, but it costs efficiency. The dinosaurs had a hard time after the meteor strike, and the mice made it through. In a stable market, the big efficient companies do the big business while the nimble ones muddle along. When the impact comes, the advantage flips.
Why Growth Makes Organizations Sluggish
Growth is a driver of change in its own right, an internal one rather than an external one. Success forces change whether you want it or not.
IT shows this clearly. A startup often begins with one backend team and one frontend team, the logical split between database and user interface. That scales well up to about 20 people. Beyond that, the horizontal split stops working, and approaches like verticalization or domain-driven design call for teams organized vertically instead of in layers.
At some point, that means rotating the entire product organization by 90 degrees. Then there is the software the startup built quickly, the software that won the venture capital, which has now turned into a burden. Growth forces you to let go and throw things away. That shift is hard for people who were comfortable in their old way of working, which is why management often changes in these phases and people leave.
The Lone Nut and the First Follower
A movement needs two roles at the start: the nut who begins something unusual, and the first person who joins in. The well-known video of a lone dancer at a music festival shows this pattern.
At first, one guy is bouncing around alone on the lawn, and everyone thinks he should go. Then a second person joins and goes all in. Moments later, the crowd rushes over and dances too. The key point: you need the lone nut and, above all, the first follower. By the time the movement goes mainstream, the people who started it are often no longer part of it.
What to Do If You’re the Nut in Your Organization
If you like to change things and try new ideas, you will get used to pain. That comes with it, and you can’t train it away.
As an idea grows, people start thinking: what is he up to now, can’t he ever stop? That hurts, because you are carrying your own change into a system that pushes back. And it hurts to let go when the thing settles into normal routine and you would have done it differently.
“Don’t let yourself get hard in these hard times. Stupid things happen in life, disappointment and stuff that isn’t so great. Just hold on to your good mood.”
(Johannes Mainusch)
The practical advice is sober. If you are like this, you are like this, and it will cost you some pain. Don’t get hard, don’t lose your cheerfulness. It will turn out fine, and if it isn’t fine yet, it isn’t over yet.
Frequently Asked Questions
What are the benefits of viewing a company as an organism?
This perspective helps us understand why some companies thrive while others struggle. The comparison draws on the human body: The neocortex comprises about 20 billion cells, and no single cell is aware of the whole. In the same way, people in a company collectively create something they themselves hardly notice: a culture, an organizational consciousness.
Do the people in an organization have to be doing well for it to function well?
From a purely business perspective, no. A company can generate high profits while its employees are suffering. Johannes Mainusch, however, puts forward a different claim: People have a right to well-being, and in a democracy, that right does not end at the factory gate. Experience supports this, because where work went really well, individuals usually fared well, too.
Does a good team need a harmonious atmosphere?
No. What’s needed is respect, not the absence of conflict. When everyone wants something, opinions clash, and the key is to find a way out of the disagreement and back into constructive discourse. Added to this are diversity (a mix of odd birds coming together) and the willingness to repeat mistakes until things run more smoothly. Constant harmony is not a quality characteristic.
Why are retrospectives considered a powerful lever for change?
They force a team to step outside the system regularly and view it from the outside. This process of stepping in and out reveals blind spots. In practice, the retro is often the point where change actually gets underway, because the team takes the time to view its own way of working as a whole and decide for itself what to change.
How can innovation work be organized in an established company?
One approach is to create time-limited spaces for experimentation with cross-functional teams. At Hanseatic Bank’s Solution Lab, seven people worked full-time in isolation on a problem for four weeks and then returned with a solution. The bank ran this program 10 to 15 times. It brought a startup spirit to an established company, but it’s a luxury that an organization must be able to afford.
Why do highly efficient companies struggle with change?
Their strength lies in optimizing what already exists, and that’s precisely what limits their flexibility. A company that delivers a letter across all of Germany for just a few cents has a strong barrier to market entry, but a streamlined structure. When the environment changes, it’s like an anorexic marathon runner at the North Pole. Agility increases the chances of survival, but comes at the cost of efficiency: The dinosaurs struggled after the meteor strike; the mice made it through.
At what size does a product organization need to be restructured?
The horizontal division into a backend and a frontend team scales up to about 20 people. Beyond that, approaches like verticalization or domain-driven design require vertically organized teams, which amounts to a 90-degree rotation of the entire product organization. Added to this is the rapidly built software, which now becomes a burden. In such phases, management often changes, and people leave.
Who gets change rolling in an organization?
It takes two roles: the “lone nut,” who starts something unusual, and, above all, the first follower, who fully commits. The pattern is illustrated by the video of a single person dancing at a music festival: at first, people think he’s crazy; once a second person joins in, the crowds rush over. By the time the movement becomes a mass phenomenon, the people who started it are often no longer there.
