Managing Organizational Complexity: Six Simple Rules
IN THIS SECTION, YOU WILL: Get an introduction to Six Simple Rules, a model for setting up organizational structures based on cooperation.
KEY POINTS:
- The Six Simple Rules approach emphasizes that in today’s complicated business environment, you must set up organizational structures based on cooperation.
- To deal with complexity, organizations should depend on the judgment of their people and on these people cooperating.
- This view is well aligned with the ideas of Grounded Architecture.
The book Six Simple Rules: How to Manage Complexity without Getting Complicated, by Yves Morieux and Peter Tollman, is another source of inspiration for my vision of the Architecture practice. Morieux and Tollman introduced the concept of Smart Simplicity with six rules or strategies that enable organizations to promote new behaviors and improve performance.
The Six Simple Rules approach emphasizes that in today’s business environment, you need to set up organizational structures based on cooperation. To deal with complexity, organizations should depend on the judgment of their people, giving them more autonomy to act. It also depends on these people cooperating to utilize the organization’s capabilities to cope with complex problems.
In this chapter, I explore the connection between the ideas of Grounded Architecture and Six Simple Rules. The Six Simple Rules ideas have been a very inspirational source of my work. Conway Law illustrates that the link between organizational structures and IT architecture is strong. In addition, the Six Simple Rules approach and architecture work deal with the issue of managing complexity.
Background: Limitations of Hard and Soft Management Approaches
One of the Six Simple Rules’ central premises is that conventional management approaches, which the authors split into hard and soft, are neither sufficient nor appropriate for the complexity of organizations nowadays.
The hard approach rests on two fundamental assumptions:
- The first is the belief that structures, processes, and systems have a direct and predictable effect on performance, and as long as managers pick the right ones, they will get the performance they want.
- The second assumption is that the human factor is the weakest and least reliable link of the organization and that it is essential to control people’s behavior through the proliferation of rules to specify their actions and through financial incentives linked to carefully designed metrics and key performance indicators (KPIs) to motivate them to perform in the way the organization wants them to.
When the company needs to meet new performance requirements, the hard response is to add new structures, processes, and systems to help satisfy those requirements. Hence, introducing the innovation czar, the risk management team, the compliance unit, the customer-centricity leader, and the cohort of coordinators and interfaces have become so common in companies.
On the other end, we have a soft management approach. According to the soft approach, an organization is a set of interpersonal relationships and the sentiments that govern them.
- Good performance is the by-product of good interpersonal relationships. Personal traits, psychological needs, and mindsets predetermine people’s actions.
- To change behavior at work, you need to change the mindset (or change the people).
Both approaches are limited in today’s world and are harmful to cooperation. A hard approach introduces complicated mechanisms, compliance, and “checking the box” behaviors instead of the engagement and initiative to make things work. The soft approach’s emphasis on good interpersonal feelings creates cooperation obstacles as people want to maintain good feelings.
Six Simple Rules Overview
The Six Simple Rules approach covers two areas: autonomy and cooperation. The first three rules create the conditions for individual autonomy and empowerment to improve performance.
- Understand what your people do. Trace performance back to behaviors and how they influence overall results. Understand the context of goals, resources, and constraints. Determine how an organization’s elements shape goals, resources, and constraints.
- Reinforce integrators. Identify integrators—those individuals or units whose influence makes a difference in the work of others—by looking for points of tension where people are doing the hard work of cooperating. Integrators bring others together and drive processes.
- Increase the total quantity of power. When creating new roles in the organization, empower them to make decisions without taking power away from others.
The Six Simple Rules’ authors emphasize the difference between Autonomy and Self-Sufficiency. Autonomy is about fully mobilizing our intelligence and energy to influence outcomes, including those we do not entirely control. Self-sufficiency is about limiting our efforts only to those outcomes that we control entirely without depending on others. Autonomy is essential for coping with complexity; self-sufficiency is an obstacle because it hinders the cooperation needed to make autonomy effective.
This difference between Autonomy and Self-Sufficiency leads us to the second set of rules that compels people to confront complexity and use their newfound autonomy to cooperate with others so that overall performance, not just individual performance, is radically improved.
- Increase reciprocity. Set clear objectives that stimulate mutual interest to cooperate. Make each person’s success dependent on the success of others. Eliminate monopolies, reduce resources, and create new networks of interaction.
- Extend the shadow of the future. Have people experience the consequences that result from their behavior and decisions. Tighten feedback loops. Shorten the duration of projects. Enable people to see how their success is aided by contributing to the success of others.
- Reward those who cooperate. Increase the payoff for all when they cooperate in a beneficial way. Establish penalties for those who fail to cooperate.
Rule 1: Understand What Your People Do
The first rule states that you must genuinely understand performance: what people do and why they do it. When you know why people do what they do and how it drives performance, you can define the minimum sufficient set of interventions with surgical accuracy.
General Guidelines
The Six Simple Rules approach states that you can genuinely understand performance by:
- Tracing performance back to behaviors and how they influence and combine to produce overall results.
- Using observation, mapping, measurement, and discussion.
- Understanding the context of goals, resources, and constraints within which the current behaviors constitute rational strategies for people.
- Finding out how your organization’s elements (structure, scorecards, systems, incentives, and so on) shape these goals, resources, and constraints.
The Role of Architecture Practice
I have found architecture practice can be very helpful in understanding what people really do in organizations in two ways:
- Having a Data Foundation with an overview of various data sources can show where activities are happening, visible trends, and how people cooperate. One of the Data Foundation principles, build maps, not control units, supports understanding and orientation rather than being a simple metric tool.
- Leveraging the People Foundation to connect people and enable them to learn what is happening in different parts of the organization.
Rule 2: Reinforce Integrators
The Six Simple Rules approach emphasizes the importance of reinforcing integrators by looking at those directly involved in the work, giving them power and interest to foster cooperation in dealing with complexity instead of resorting to the paraphernalia of overarching hierarchies, overlays, dedicated interfaces, balanced scorecards, or coordination procedures.
General Guidelines
You can reinforce integrators by:
- Using feelings to identify candidates: emotions provide essential clues for the analysis because they are symptoms rather than causes.
- Finding operational units that can be integrators among peer units because of some particular interest or power.
- Removing managerial layers which cannot add value and reinforcing others as integrators by eliminating some rules and relying on observation and judgment rather than metrics whenever cooperation is involved.
The Role of Architecture Practice
Architecture practice, in my view, should be strongly related to reinforcing integrators:
- Via the People Foundation, Grounded Architecture can help identify integrators and connect them to leverage their work.
- Furthermore, my view on architects as superglue defines architects as critical integrators and integrator role models in an organization.
- And having a Data Foundation can support integrators with data and insights, empowering them to do better, more informed work.
Rule 3: Increase the Total Quantity of Power
Whenever you consider an addition to your organization’s structure, processes, and systems, think about increasing the quantity of power. Doing so may save you from increasing complicatedness and enable you to achieve a more significant impact with less cost. You can increase the quantity of power by allowing some functions to influence performance and stakes that matter to others.
General Guidelines
To increase the quantity of power, the Six Simple Rules approach recommends the following actions:
- Whenever you are going to make a design decision that will swing the pendulum—between center and units, between functions and line managers, and so on—see if making some parts of the organization benefit from new power bases could satisfy more requirements in dealing with complexity so that you don’t have to swing the pendulum in the other direction in the future (which would only compound complicatedness with the mechanical frictions and disruptions inherent to these changes).
- When you have to create new functions, make sure you give them the power to play their role and that this power does not come at the expense of the power needed by others to play theirs.
- When you create new tools for managers (planning, or evaluation systems, for instance), ask yourself if these constitute resources or constraints. Providing a few tools simultaneously is more effective (because it creates a critical mass of power) than many tools sequentially, one after the other.
- Regularly enrich power bases to ensure agility, flexibility, and adaptiveness.
The Role of Architecture Practice
Architecture practice can support increasing power quantity with the operating model that promotes distributing decision-making:
- Grounded Architecture aims to increase the quantity of the decision-making power and keep architectural decision-making distributed across the organization and embedded in the development teams. Development teams traditionally have the best insights and most information relevant for making a decision.
- Additionally, the Data Foundation, accessible to all interested people in the organization, can give them data in insights that can increase their power in daily work.
Rule 4: Increase Reciprocity
In the face of business complexity, work is becoming more interdependent. To meet multiple and often contradictory performance requirements, people must rely more on each other. They need to cooperate directly instead of depending on dedicated interfaces, coordination structures, or procedures that only add to complicatedness.
General Guidelines
Reciprocity is the recognition by people or units in an organization that they have a mutual interest in cooperation and that the success of one depends on the success of others (and vice versa). The way to create that reciprocity is by setting rich objectives and reinforcing them by:
- eliminating monopolies,
- reducing resources, and
- creating new networks of interaction.
The Role of Architecture Practice
Architecture practice can be directly related to increasing reciprocity:
- The People Foundation directly supports one of the ways of reinforcing reciprocity: creating new networks of interactions.
- The hybrid operating model makes the success of architecture practice dependent on architects’ impact. Likewise, the developer team’s support depends on architecture support. Integrating feedback from groups that architects support in architects’ performance evaluations is also crucial for increasing reciprocity between architecture and other units.
Rule 5: Extend the Shadow of the Future
The Six Simple Rules approach emphasizes the importance of making visible and clear what happens tomorrow as a consequence of what they do today. You can manage complex requirements by making simple changes while removing organizational complexity. With the strategic alignment typical of the hard approach, these simple solutions—for instance, career paths—often come at the end of a sequence that starts by installing the most cumbersome changes: new structure, processes, systems, metrics, etc. Simple and effective solutions are then impossible.
General Guidelines
The Six Simple Rules approach identifies four ways to extend the shadow of the future:
- Tighten the feedback loop by making more frequent the moments when people experience the consequence of the fit between their contributions.
- Bring the endpoint forward, notably by shortening the duration of projects.
- Tie futures together so that successful moves are conditioned by contributing to the successful move of others.
- Make people walk in the shoes they make for others.
The Role of Architecture Practice
Architecture practice can extend the shadow of the future in multiple ways:
- The Data Foundation can create transparency and provides data necessary to model the future. I’ve used such data to create many simulations and roadmap options.
- The principle of applying economic modeling to architecture decision-making directly supports describing what happens tomorrow as a consequence of what they do today.
Rule 6: Reward Those Who Cooperate
Lastly, the Six Simple Rules approach recommends that when you cannot create direct feedback loops embedded in people’s tasks, you need management’s intervention to close the loop. Managers must then use the familiar performance evaluation tool but in a very different way.
General Guidelines
To reward those who cooperate, managers:
- Must go beyond technical criteria (putting the blame where the root cause problem originated). In dealing with the business complexity of multiple and often conflicting performance requirements, the smart organization accepts that problems in execution happen for many reasons and that the only way to solve them is to reduce the payoff for all those people or units that fail to cooperate in solving a problem, even if the problem does not take place precisely in their area, and to increase the payoff for all when units cooperate in a beneficial way.
- They must not blame failure, but blame failing to help or ask for help.
- Instead of the elusive sophistication of balanced scorecards and other counterproductive cumbersome systems and procedures, they can use simple questions to change the terms of the managerial conversation so that transparency and ambitious targets become resources rather than constraints for the individual. Managers then act as integrators by obtaining from others the cooperation that will leverage the rich information allowed by this transparency and help achieve superior results.
The Role of Architecture Practice
Architecture practice can reward cooperation by making it easier for everyone to help others and ask for help.
- Having a strong People Foundation can provide the context and networks of people to collaborate more easily.
- Adding diverse data sources to the Data Foundation can create transparency about cooperation opportunities and challenges.
Questions to Consider
- How can the concept of Smart Simplicity apply to your current role or position within your organization?
- Do you feel the structures, processes, and systems directly and predictably affect performance in your organization?
- Do you feel that your organization views the human factor is viewed as the weakest link? How does this affect how you and your colleagues perform?
- How do you perceive the balance between your organization’s hard and soft management approaches? Is one approach more dominant?
- How does your organization currently promote autonomy and cooperation among employees? Are there areas for improvement?
- How do the assumptions of hard and soft management approaches hinder cooperation in your organization?
- How can you increase the total power within your organization without taking power away from others?
- How can your organization increase reciprocity and make each person’s success dependent on the success of others?
- How can your organization extend the shadow of the future? Are there feedback mechanisms in place to make people accountable for their decisions?
- How are those who cooperate rewarded in your organization? Are there mechanisms in place to increase the payoff for all when they cooperate beneficially?
- How can the architecture practice in your organization support the implementation of the Six Simple Rules?
- How do your organization’s current systems and structures promote or hinder the cooperation needed to make autonomy effective?
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