January 10, 2020

Reconceptualising organisations: from complicated machines to flowing streams.

I’ve often wondered about the seeming detour my life took when I chose to study meteorology. Looking at the work I do now, something like industrial psychology or business sciences seems more appropriate. Recently though, a new penny has dropped: weather systems are flow systems. As I’ve come to see flow as one of the primary lenses to use to understand and structure a system, I’ve realised that studying the dynamics of weather (and other natural) systems was, in a way, the perfect preparation for the emerging trajectory of my work.

Over the last few years, I have come to realise that the interplay between flow, constraints and options is key to understanding how to navigate and thrive in complexity. With “flow”, I mean flow in the broadest sense of the word. There are some flows that we are very familiar with: workflow, process flow, cash flow, data flow, information flow … however, we need to broaden our thinking.

In machines, there is a specific ‘inflow’ and a specific ‘outflow’. In organisms, everything flows. (Nicolson, 2018)

Too often we still view organisations through a mechanistic lens and this impacts the flows we pay attention to. If we see them instead as living systems, organisms, or ecosystems, it soon becomes clear that flow is central to every aspect of the organisation.

Whatever else they may be, living systems are highly stabilised flows of energy and matter. Machines may take part in various processes, but organisms are themselves processes. (Nicolson, 2018)

If we look at organisations not as machines, but as living entities — ecosystems or organisms, we have to look at them as flow systems. Flow, therefore, becomes a beneficial lens to help us think about new ways of working, new organisational structures, and new forms of management.

First, let us look at flow in the context of a typical organisation:

In addition to the familiar flows already mentioned, another essential flow to consider is the overall flow of value through our organisations. We have therefore seen increased adoption of processes like Value Stream Mapping. If the organisation is effective at enabling these flows of value, we would expect there to be a return flow of benefit back to the organisation in the form of revenue, increased market share, improved reputation, etc. Various other flows seem obvious, but we don’t often think about them as such: flows of power & authority; flows of energy; relational flows. Anything that is a process is a flow — so if we consider how things flow through time, then learning and change also flow. Mary Uhl-Bien’s Adaptive Space is a way of enabling the flow of ideas, energy, and authority between entrepreneurial and operational systems in organisations to facilitate adaptation, i.e. the overall flow of the system through time.

In organisations, as with natural systems, when flow stops, so does life. It is, therefore, imperative for organisations to optimise for flow to remain vital. A phenomenon that Prof Adrian Bejan has studied extensively is how design emerges in natural flow systems to optimise flow. His work is summarised by the constructal law, for which he received the Benjamin Franklin medal in 2018. The constructal law states:

“For a finite-size system to persist in time (to live), it must evolve in such a way that it provides easier access to the imposed (global) currents that flow through it.”

Or more simply:

This law explains why rivers, trees, snowflakes, and even our vascular system all look the same, i.e. they all have the same branching design. It also explains why hierarchies emerge and persist in human systems: for one-directional (e.g. top-down) flow, a hierarchy is an optimal design, same as for water flowing through a river system. This is important to understand in today’s business environment where we often demonize and attempt to get rid of hierarchies.

Hierarchies emerge in any human system, and as Paul Cilliers states in his paper “Boundaries, hierarchies and networks in complex systems” that: “part of the vitality of a system lies in its ability to transform hierarchies. Although hierarchies are necessary in order to generate frameworks of meaning in the system, they cannot remain unchanged. As the context changes, so must the hierarchies. Some hierarchies may be more long-lived than others, but it is important to perceive hierarchies as transformable entities. This may seem to be self-evident, but I do not think that managers regularly think in these terms. They may realise that they can be replaced, but they do not often perceive their positions to be in principle provisional. They also tend to think of the interpenetrations as obstacles to efficient management, and not as vital routes of communication. “

In natural systems, the hierarchical or bifurcating design emerges and self-optimises over time. Most human systems tend not to have the same freedom to evolve their design, e.g. to create fluid, evolving hierarchies or given that knowledge organisations don’t depend on linear one-dimensional flows, potentially facilitating the emergence of entirely new structures.

In complex systems, we need to consider how to enable a variety of multi-directional and even non-linear flows. I believe this is one reason why we are seeing the increasing focus on networks and distributed leadership models e.g. Stanley McCrystal’s Team of Teams. Ironically it has always been the informal networks in organisations that facilitated critical flows that the hierarchy could not. The problem is that in our over-focus on efficiency we have disrupted and in some cases virtually destroyed these invisible networks. We can potentially see these attempts to formalise networks and adopt network models as formal organisational structures as systems attempting to evolve their structures to optimise flow as the constructal law predicts they will. This process is, however, undermined by a lack of the necessary freedom to do so: the rigid hierarchies, legacy systems, and mechanistic mindsets that permeate these systems have become like straight-jackets.

“We shape our structures, and afterwards our structures shape us — Winston Churchill.

In light of all this, I have become increasingly interested in the notion of fluidity. In unstable and even turbulent contexts, the so-called VUCA world, resilience, and transformability are critical. I believe that enabling fluidity of form over time requires fluid structures that can morph without a loss of function, i.e. without compromising essential flows.

The constructal law proves that flow systems have dynamic or fluid structures that are always in flux, ever-evolving to provide better and better flow access. This ensures the health and ultimately, the survival of the system. So then the question becomes: how do we enable fluidity in human systems? If we need fluid hierarchies or possibly completely novel structures, flow systems need freedom and autonomy to morph their own design.

“To truly transform an organisation, we must optimise the system for the flow of value, and this means looking at the whole system, and changing the entire system if that is what is needed.”

Nigel Thurlow

In nature, form follows flow. In human systems, we tend to design our structures first and then try to force flow through them. To create fluid structures, we need to ask different questions. We also need to realise that in part, we are designing for emergence, i.e. creating environments where new structures can emerge and evolve as needed.

There is no recipe or one-size-fits-all approach to achieve this. Some potential starting points are:

  • Map the flows, from the obvious, e.g. work, cash, etc., to the non-obvious, e.g. authority, energy, etc. that needs to be optimised to enable the overall flow of value through the system. Work across levels, i.e. map the overall flow of value to the customer as well as the enabling flows at lower levels.
  • Map the constraints that enable or impact these flows. Flow is enabled, shaped, or blocked by constraints. Think of water; if there are no constraints, there can be no flow — the water will dissipate. If there are rigid and tight constraints, e.g. a cement channel, the flow will be fast and smooth (however it becomes crucial to regulate the intensity of the current as too much water is destructive). Wide river banks create a gentle, slower flow. An obstacle can create creative eddies, or it can completely cut off the flow. Constraints are crucial to managing and enabling flow.
  • Learn to manage tension and polarities. Sometimes flows are contradictory, i.e. enabling the flow of authority and ideas may create tension with the efficient flow of work. We may need to allow for an amount of inefficiency for the whole system to be more fluid and resilient.
  • Find ways to divorce structures (e.g. hierarchies and roles) from status and remuneration. One of the reasons (if not the main reason) why hierarchies become rigid is that they are closely linked to status, compensation, and rewards. This means that any change to the structure will be seen as a threat and will trigger the system’s defences.
  • Don’t forget about temporal constraints. While alive, organisations, like organisms, flow through time. Timing and rhythm are important constraints to consider and work with. We need to know when (or which) flows need to speed up, and when we need to slow down. We can experiment with cadences and rhythms; sometimes, we need to accept that things need to end. Some flows may need to be cut off to enable others, just like we prune plants to encourage flowers or fruit.
  • Ensure adequate external information flows (feedback), as well as the internal processes and culture that will ensure the integration of this feedback into the system. It is vital to remain situationally aware so that the organisation can respond to emerging changes in the environment in time.
  • Run multiple small safe-to-fail experiments focused in particular on creating more freedom for the system to find fit-for-context ways to optimise flow. Consider experimenting with networks and fluid roles; with distributed leadership models like Mission Command; and principles or heuristics vs rules.

These are a few ideas I encourage my clients to experiment with. Flow is a big topic; I have not even considered here the wisdom we can find in practices and philosophies like Lean. My friends at Toyota are also focusing on flow and have developed the Toyota Flow System that also has complexity as a core tenet.

Nature does not produce optima, or “end designs” or “destiny.” Nature is governed by the tendency to generate shapes and design that evolve in time to reduce imperfection. Design evolution never ends. ~ Adrian Bejan

“We are always in a process of becoming and nothing is fixed. Have no rigid system in you, and you’ll be flexible to change with the ever changing. Open yourself and flow. Flow in the total openness of the living moment. If nothing within you stays rigid, outward things will disclose themselves. Moving, be like water. Still, be like a mirror. Respond like an echo.” — Bruce Lee

This piece was first published on Medium and references:

Daniel J. Nicholson (2018). Reconceptualizing the Organism. In Everything Flows. Oxford University Press. May 2018 | ISBN: 9780198779636.

Bejan, Adrian; J. Peder Zane (2012). Design in Nature: How the Constructal Law Governs Evolution in Biology, Physics, Technology, and Social Organizations. Doubleday. ISBN 978–0–385–53461–1.

Paul Cilliers, 2001. “Boundaries, Hierarchies And Networks In Complex Systems,” International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 135–147.

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