From Functional to Social – Part 2 of 2

Functional SocialIn Part 1 of this 2-part series, I talked about the structuring of the workplace into communities called HIVE’s and the development of “HIVE Habits”. As explained at the onset of that article, there are 4 basic steps or phases to go through in the development of the social workplace, as I see it.

Those steps are:

1- Develop ‘social habits’ by implementing HIVEs that respond to unexpected events

2- Reshape Leadership

3- Progress to HIVEs that handle day-to-day regular operations

4- Reshape the organization

In this article, I discuss steps 2 to 4.

Reshape Leadership

There are two key aspects of the HIVE social model that challenge the view of leadership that is predominant in classical functional organizations (all those that follow the standard corporate model of the 20th century):

– HIVE’s are mission oriented and are not functional. As a result, they are inevitably multi-disciplinary, i.e., they are multi-functional.

– HIVE’s are collaborative communities of individuals spontaneously reacting to events, improvising action pathways to resolve problems and making decisions as they go along.

These two attributes of a social model run counter to the classical attributes of leadership positions in functional, hierarchical structures:

– Functional Leaders are functionally driven, i.e., their scope is specialized – not multi-disciplinary – unless a Leader is placed high in the hierarchy.

– In a Functional structure, Leadership equates to “power” – the power to decide not only what people do but how and who. There is a strong connotation of control with a Leader position.

These two important characteristics in a Functional structure run in conflict with the nature of a social organization where the ‘masses’ collaborate to solve problems, to get things done and to figure out better ways of processing business.

Thus, in the migration from Functional to Social, Leadership must be re-shaped – and that, believe me, in not a bad thing at all.

If you noticed, in Part 1 I described an approach to help people develop ‘HIVE Habits’, which is to say to help people liberate their ability to associate spontaneously and make decisions from the confinement of Functional silos. In that approach, I indicated already that Leaders have to be taught to guide, coach and empower employees in the HIVE, rather than micro managing action plans and task assignments.

It is in this aspect that Leadership needs to be reshaped. In a social organization – which is what the HIVE model is – Leaders work on strategy and provide direction, they are concerned with what needs to be accomplished rather than how. In order to behave in this semi-hands-off manner, they need to be trained to do so.

Training starts at the top – where this transition is probably a little easier – and proceeds to the middle management layer of the hierarchy, the level which is most critical to the success of the HIVE model. I have always believed that if an organization needs to change substantially, the challenge is always at the middle management level, the level of Managers and Directors. They will either learn a new philosophy, leave their egos at home and redirect their focus or the organization will fail. Hence, creating a program to teach middle managers new soft skills, is essential. Part of such a program has to be the evaluation of adequacy of individuals in leadership roles – those who make good leaders in Functional hierarchies aren’t necessarily the best to lead in a social model.

In addition to a change in directional role for Leaders, an organization needs to deal with the multi-disciplinary nature of HIVE units. Most leaders are not unidimensional but they are typically in a leadership role because of their ability to lead one discipline or at least a group of similar disciplines.

To overcome the Functional thrust of Leaders, there are a few things you can do without changing the organization structure:

  • Encourage Leaders to participate in HIVE conversations. Issues being discussed in a HIVE are cross functional and so they ‘pull’ in Leaders of multiple disciplines, naturally. This gravitation towards subject-conversations instead of function-conversations helps Leaders work outside their respective Silos and that will help them migrate to a social environment.
  • Develop a strong team spirit amongst Leaders of different functional groups. The best way I know of accomplishing this is to create working groups of Leaders that participate in the development of business objectives. The latter are not function-specific, they stem from the needs of the business as a whole and provide the perfect ‘incubator’ for team spirit amongst Leaders.
  • Use these working groups as well to determine which HIVE’s the company needs and what would be their respective missions and composition.

Progress to Day-to-day HIVE’s

I suggested in part 1 that initially a company should set-up HIVE units to react to unexpected events. But as the collaboration culture evolves and matures, working in multi-disciplinary communities becomes second nature. At that stage, you can kick the model into second gear – to process regular business.

Moving to HIVE’s that process regular business is not straight forward because there is so much rigidity in the way a Functional structure operates and that rigidity needs to be dismantled. The primary difference between the two ways of operating that creates a real challenge is NOW Mode because the latter requires a few things:

  • Business needs to be processed by Instance and not in ‘batch mode’. As an example, instead of loading demand forecasts for all the products in the supply chain and then calculating supply plans for all those products, in Instance mode the planning cycle would be triggered for each product affected by an event and would be processed from end to end for just that or those products.
  • People have to think that they work in the HIVE and not in their individual Silos. While the HIVE is just reacting to unexpected events, people look at the HIVE as a ‘hit and run’ environment, i.e., a place they go to, have a few conversations and then come back to the place where they ‘really‘ work, i.e., the Functional Silo. Now, they have to change that mindset to work in the HIVE and not in the Silo.

This shift to NOW Mode is hard to do which is why I recommend that you don’t progress with this step until the community matures in their collaboration capacity.

Reshaping the organization

If you go through all the steps, you eventually end here: at the point where it no longer makes sense to be organized functionally and where the HIVE model itself becomes the structure. In this case, then, the big question becomes what to do with Leaders.

The simple answer to this question is to create two types of HIVE’s:

  • Leadership HIVE’s
  • Functional ‘skill brotherhoods’

A Leadership HIVE is a Unit made up of Leaders whose role is to develop strategy, clarify business goals and objectives and translate the latter into the best decomposition of HIVE Units.

A ‘skill brotherhood’ is the equivalent of Functional Silos but without the burden of the hierarchy. These brotherhoods can also function as HIVE-like units but their mission is the quality of practice. One advantage of using HIVE Units instead of a Functional Hierarchy model is that while each unit is focused on a primary theme (e.g., Supply Chain Management, Manufacturing, Logistics, Customer Service, etc.), you can nonetheless bring people with other skills to contribute to a particular brotherhood.

Summary

The HIVE Model can be implemented in stages and you can – and most organizations will – stop the process at any of those stages. If you do, evidently, you won’t rip all its benefits but just taking step 1 will accrue tremendous benefits for your organization in speed and simplification of your operations.

Once you’ve established HIVE Units that deal with unexpected events, you need to reflect on the role that Leaders play and how to evolve them to be less operational and more strategic. A change in the habits of Leaders and people working in HIVE Units provides then the opportunity to evolve to a situation where HIVE’s are being used to operate regular business in NOW Mode. Such a move will accrue the organization tremendous benefits, primarily because the operation will become simpler and lighter as accumulation and waiting periods will be reduced dramatically.

Finally, if you’ve been able to get everybody working in NOW Mode and Leaders thinking strategically, you can think of adopting a new organizational model away from the Functional Hierarchy but where the benefits of functional specialization isn’t lost. This can be accomplished through Leadership HIVE’s where Leaders work together to elaborate company strategy, decompose HIVE missions and HIVE Units; and Skill Brotherhoods where specialized knowledge is developed and practice is perfected.

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Categories: Business transformation, NOW Mode, Social Enterprise

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