This story is a plea for transformative change. The story begins 300 years ago when human systems started degrading. The story ends with hope. There are already great solutions to heal our broken systems. We only need the courage to enforce them.
Placed in Service of Machines
We’re in the year 1660. King Charles II was restored to the throne of England, Scotland, and Ireland. Shortly before that, by signing the Declaration of Breda, Charles promised a general pardon for crimes committed during the English Civil War for all those who recognized him as the lawful king.
It is also the year the steam engine, introduced in Britain, revolutionized productivity and profitability in several industries. It marked the beginning of the Industrial Revolution and profoundly affected various sectors, such as mining, manufacturing, and transportation.
The steam engine’s introduction allowed for the mechanization of labor-intensive tasks, leading to significant increases in productivity. It replaced traditional manual labor with machinery, enabling faster and more efficient production processes.
Furthermore, the steam engine powered the growth of factories and manufacturing. It provided a reliable power source, enabling machinery operation on a large scale. This led to the establishment of textile mills, forges, and other industrial facilities, which significantly increased the output of goods and improved profitability.
The steam engine revolutionized the movement of goods and people in terms of transportation. Steam-powered locomotives were developed, leading to the creation of the railway system. This allowed for faster and more efficient transportation of raw materials and finished products across the country, facilitating trade and expanding markets.
Slowly, workers were being replaced and subjected to machines. In hindsight, this is when the degradation of the substance of human labor began.
The word “sabotage” is closely linked to the Industrial Revolution and the rise of mechanized industries. The term originated in France in the early 19th century and is rooted in the French word “sabot,” which means a wooden shoe or clog. As machines and automation replaced traditional artisanal work during the Industrial Revolution, many workers felt threatened by these changes. Some workers, particularly those in the textile industry, who were skilled in manual techniques, saw their livelihoods at risk. In acts of protest, these workers would throw their wooden clogs, or “sabots,” into the machinery to disrupt production.
Placed in Service of Time
Fast forward 240 years. Henry Ford was an American industrialist and founder of the Ford Motor Company. Ford embraced the principles of scientific management and applied them to his manufacturing processes of automobiles.
Scientific management emphasizes the systematic analysis of work processes, standardization of tasks, and the division of labor. The effects of scientific management on productivity and profit were significant, leading to increased output and profitability for businesses. However, it also had implications for labor, often resulting in intensified work, reduced autonomy, and strained employee relations.
Under scientific management principles, Ford implemented assembly line production, where workers performed repetitive and specialized tasks. This division of labor allowed for greater efficiency and increased productivity. By breaking down the manufacturing process into smaller, more straightforward tasks, Ford was able to streamline production and dramatically reduce the time required to assemble a car.
The adoption of scientific management by Henry Ford had profound implications for workers and artisans. On the one hand, it increased productivity and profitability for Ford Motor Company. The assembly line approach allowed for mass production, lowering costs and making cars more affordable for consumers. This contributed to Ford’s success and played a significant role in developing the modern automobile industry.
On the other hand, implementing scientific management also negatively affected workers and artisans. The division of labor and specialization reduced the autonomy and skill required for each task. Workers became more like cogs in a machine, performing repetitive, monotonous tasks without much control or input into the production process. This led to a deskilling of labor, as workers were no longer required to possess a broad range of skills.
Moreover, the intensified work pace on the assembly line often resulted in harsh working conditions and physical strain for the workers. The focus on efficiency and productivity sometimes came at the expense of worker well-being and job satisfaction. This led to increased employee turnover and strained labor relations.
In hindsight, this reductionist approach (the idea that every system can be broken down into smaller parts while problems can be solved by fixing just the faulty part) to management was the second degradation of human labor. Workers began to alienate from work while being put in service of productivity. Due to the increased output and lower cost of production, profitability ballooned, thereby increasing shareholder value.
Placed in Service of Algorithms
Let’s take another leap. It is 1994. The Netscape browser has just been launched. In four months, it captured 75% of the browser market. Around that time, I entered the internet through CompuServe. CompuServe was the first service provider to offer electronic mail capabilities back in 1979. This period became known as the Information Age.
The Information Age, characterized by the widespread use of computers and the internet, has profoundly impacted human connections and relationships. One significant aspect of this impact is the influence of algorithms on human behavior. Algorithms are sets of rules or instructions used in computing, and decision-making processes play a central role in shaping online content and interactions with digital platforms.
Online platforms and social media networks use algorithms to personalize content and recommendations based on user’s preferences, browsing history, and demographic information. This personalized content delivery has both positive and negative effects on human connections.
In some organizations, algorithms already play a dominant role. In Tesla and Amazon, algorithms determine almost every move a worker needs to make. Nothing is left to chance, apparently to exclude human failure. These companies have put Taylorism on steroids, except, this time, Frederick isn’t observing; AI is.
We argue that the Information Age has put workers (and society), intentionally or unintentionally, at the mercy of and in the service of algorithms.
Not Broken But by Design
Some argue that the system isn’t broken because it was designed this way. Sadly, this is true. Numerous philosophers, economists, and sociologists, like Hegel, Kant, Marx, Voltaire, and even Adam Smith, forewarned us that the extreme measures to improve worker productivity would come at the expense of human health. And it has been and will continue to be unless we opt for a better system.
Indicators of Brokenness
The purpose of work plunged as one’s individual measure of meaningful contributions degenerated from inspired artisans to blinded soloists. Let’s look at some indicators:
LOUDLY QUITTING: According to Gallup’s latest report, one in five employees (18%) is quitting their job loudly. The consulting company defined loud quitters as employees who take actions that ‘directly harm’ the organization while undercutting its goals and opposing its leaders. With most of the world’s employees quitting quietly (59%), only 23% of survey respondents consider themselves thriving or engaged at work.
TRUST IN CRISIS: According to Gallup, institutional trust has fallen into crisis: 77% of U.S. employees have little or no trust in their organization’s leadership. By coincidence or correlation, this number matches the number of quitters above.
STRESS AND ANXIETY: The American Psychological Association concluded: “We are facing a national mental health crisis that could yield serious health and social consequences for years to come.”
GROWING INEQUALITY: World Economic Forum wrote, “Addressing the challenges of the 21st Century will not be ‘feasible without significant redistribution of wealth & income inequality,’ the report’s authors argue.”
POWER CONCENTRATION: The stronghold of digital companies is problematic. The market capitalization of the six largest companies exceeds the GDP (Gross Domestic Product) of the sixty poorest countries. If Apple were a country, it would rank 8th if we compared nominal GDP to Market Cap, placing it between France and Italy.
SHORT-TERMISM: To please their shareholders, CEOs push hard to drive sales, despite causing harm to consumer health, the environment, and nature. It does not help that the average CEO compensation is 900 (!) times higher than the average worker.
If anything, these alarming numbers show we’re on the wrong track. Better machines, more productivity, or smarter algorithms do not solve the ever-decreasing employee morale or impoverish business ethics.
In Service of Our Highest Self
Ricardo Semler agrees that we must aim high(er) to reduce these negative consequences. If we are to strive for the Age of Wisdom, as Semler suggests, we argue that we need to start by putting ourselves in service of our highest self.
Putting oneself in service of our highest self refers to aligning our actions, choices, and behavior with our core values, aspirations, and personal growth. It involves prioritizing our personal development, well-being, and fulfilling our potential.
By dedicating ourselves to the service of our highest self, we strive to lead a meaningful life. We prioritize personal development, fulfillment, and living in alignment with our authentic values. This process allows us to tap into our potential, cultivate inner harmony, and create a positive impact on ourselves and those around us.
However, to express our highest self and affect the outcomes of our labor, we need to organize work accordingly. Let’s look at the current state of affairs to find a solution.
Chain of Command
Throughout the past 300 years, most organizations have been led along a vertical line called the chain of command. The chain of command in an organizational structure refers to the hierarchical arrangement of authority and decision-making responsibility.
It establishes the flow of communication (command) and reporting (control) relationships within an organization. The effect of the chain of command on workers’ autonomy can vary depending on the organizational culture and management style.
Managers or supervisors typically make decisions, and workers are expected to follow instructions and carry out tasks according to predetermined guidelines. This can restrict the ability of workers to make independent decisions and exercise autonomy in their work.
The following characteristics are often associated with a traditional organizational structure and management approach:
Containment: Containment refers to the structured and hierarchical nature of the organization. It emphasizes clear boundaries, departmental divisions, and a top-down chain of command. Decision-making and authority are concentrated at the top levels of management, with limited autonomy for lower-level employees.
Consistency: Consistency refers to the standardized processes and procedures within the organization. Industrial-age hierarchical companies focus on creating uniformity and predictability in their operations. There is an emphasis on following established rules, protocols, and best practices to ensure efficiency and minimize variation.
Continuity: Continuity refers to the stability and longevity of the organization. Industrial-age hierarchical companies aim for long-term survival and success. They often prioritize maintaining established systems, practices, and structures, emphasizing stability and resistance to change.
Compliance: Compliance is the adherence to rules, regulations, and directives within the organization. In industrial-age hierarchical companies, strict adherence to policies and procedures is expected. Employees are expected to comply with instructions from higher-level managers and follow prescribed guidelines without questioning or deviating from them.
These characteristics of containment, consistency, continuity, and compliance in an industrial-age hierarchical company were influenced by the nature of work and management philosophies prevalent throughout the Industrial Revolution. In many cases, the focus is on efficiency, control, and standardized processes to achieve predictable outcomes.
Striking the right balance between central coordination and distributed autonomy in a formal hierarchical structure, sometimes with as many as 15 layers of management, remains a challenge to this day. Hampering innovation in the process.
Given that over the past 300 years, we have been unsuccessful in allowing employees to put themselves in service of their highest self, we should abandon the command and control paradigm. It has proven detrimental to humans, society, and the planet.
I have a dream
I dream that one day, people can willfully and wholeheartedly collaborate on projects they can contribute to in the most meaningful way while striving to become their best version. No longer constrained by foolish obligations toward shareholders, machines, productivity, or algorithms. They feel and act accountable to their customers, colleagues, company, society, and nature.
How can this dream be achieved? It has kept me occupied throughout much of my career. Many authors helped to shape my thinking process. At first, I believed that the problem was in the frontline operation. Later, I convinced myself it was in the business model. Ultimately, taking people through positive change made me realize that the solution is to transform the context of the human system to help it heal itself.
The Human System
The human system refers to the collective and interconnected elements that make up an organization or group of individuals. It encompasses the people, relationships, processes, and interactions shaping how work is organized and executed.
Characteristics of the human system include:
People: The human system comprises individuals with diverse skills, knowledge, and experiences who contribute to the organization. Everyone brings unique perspectives, capabilities, and motivations to the work environment.
Relationships: The human system is defined by the relationships and interactions among individuals within the organization. This includes formal relationships such as hierarchical reporting structures, teams, and departments, as well as informal networks and collaborations.
Communication: Effective communication is a vital characteristic of the human system. Transparent and open communication channels facilitate the exchange of information, ideas, feedback, and instructions among individuals, teams, and departments.
Collaboration: Collaboration is a key aspect of the human system. It involves individuals working together, sharing knowledge, and leveraging collective expertise to achieve common goals. Collaboration encourages cooperation, synergy, and the pooling of resources and talents.
Roles and Responsibilities: The human system structures work by using defined roles and responsibilities. Clear role definitions help individuals understand their areas of responsibility, authority, and accountability, ensuring effective coordination and avoiding duplication of efforts.
Motivation and Engagement: The human system thrives when individuals are motivated and engaged in their work. Creating an environment that fosters intrinsic motivation, provides opportunities for growth and development, and recognizes and rewards contributions that help drive individual and collective performance.
Culture and Values: The human system is influenced by the shared beliefs, values, norms, and behaviors within the organization. A strong organizational culture guides how work is approached, decisions are made, and interactions occur, shaping the overall work environment.
Learning and Adaptability: The human system is characterized by the ability to learn and adapt to changing circumstances. Continuous learning, knowledge sharing, and adjusting work processes and practices are crucial to staying relevant and thriving in dynamic environments.
Well-being and Support: The human system recognizes the importance of supporting the well-being of individuals. Organizations prioritizing employee well-being provide resources for work-life balance and support systems that foster a healthy and productive human system.
Understanding and effectively managing the human system within organizing work is essential for creating an environment that promotes collaboration, productivity, and employee satisfaction. It involves recognizing the interconnectedness of people, relationships, communication, roles, and culture and cultivating an environment that values and supports the human elements within the organization.
Semco Style
In hindsight, 1994 was also the year I became influenced by Richardo Semler’s revolutionary approach to management and how this transformed Semco, his family’s industrial equipment manufacturing company.
In his book Maverick, Semler shared his experiences with:
- Employee Empowerment: Semler emphasizes empowering employees and giving them a sense of ownership and autonomy. He promotes self-management, where employees can make decisions and take responsibility for their actions.
- Decentralized Decision-Making: Semler challenges traditional hierarchical structures and advocates for decentralized decision-making. He believes that decisions should be made at the lowest possible level in the organization, allowing employees to have a say in matters that affect their work.
- Radical Transparency: Semler promotes transparency within the organization, sharing financial information, strategic plans, and even salaries with all employees. He believes open communication fosters trust and collaboration and helps everyone understand the big picture.
- Flexibility and Work-Life Balance: Semler advocates for a flexible work environment that gives employees a healthy work-life balance. He implemented flexible working hours, unlimited vacation time, and job rotation to promote personal fulfillment and well-being.
- Continuous Innovation: Semler encourages a culture of innovation and experimentation. He believes that organizations should constantly evolve and adapt to stay competitive. Semler emphasizes the importance of questioning established norms and finding new ways of doing things.
The ARC™ Model
Coinspired by Semler and Denning, and many others, we’re proposing a distributive, consent-driven model. In architecture, an arch is the most robust shape possible. We, therefore, call it the ARC™ model (= Alignment, Representation, and Consent). More can be found here.
Conclusion
We’ve considered the positive and negative effects of the Industrial Revolution and the unsustainable military doctrine of command and control. Given the ever-growing downside of both aspects, we felt the urge to devise and propose a more distributive, balanced, rewarding, equitable, and respectful approach to shaping work. If you care to discuss the potential of the ARC™ organizational model for your organization, please don’t hesitate to contact us.
Interview
Former Division Chief at The World Bank, Dr. Madelyn Blair, invited Edwin Korver, CEO and founder of Cross-Silo BV, to talk about Healing Broken Systems.
