Tuesday, January 22, 2013
Harvard business sage John Kotter writes “We can’t keep up with the pace of change, let alone get ahead of it.” He says the historical success of hierarchical structures “can’t handle the challenges of mounting complexity and rapid change.”

Large companies (and governments) cannot ignore the daily demands of running large enterprises that depend on hierarchy and routines, Kotter observes.  These structures and processes work well in stable, predictable environments and their evolution and refinements have contributed greatly to society in the past hundred years.

But Kotter says in a recent article in Harvard Business Review that the current hierarchical operating system needs “an additional element to address the challenges produced by mounting complexity and rapid change.”  He says the solution is “a second operating system, devoted to the design and implementation of strategy, that uses an agile, networklike structure and a very different set of processes.”  He says that this new operating system would run in parallel and should complement the existing hierarchical system – allowing the hierarchical system “to do what it is optimized to do.”

Kotter says there are five principles at the heart of a dual operating system:

  • Enlist many change agents, not just a few full-time appointees.  He recommends volunteers from at least 10 percent of the managerial and employee population as a starting point.  Interestingly, this was the approach of the Clinton-Gore reinventing government initiative, which attempted to engage tens of thousands of civil servants in its change efforts.
  • In order to mobilize volunteer energy and brainpower, people need to feel they have permission to act.  “The spirit of volunteerism – the desire to work with others for a shared purpose – energizes the network.”  Again, the reinvention “permission slips” attempted to act on this principle in the 1990s.
  • Appeal to emotions, not just logic, numbers, and business cases.  It is by “giving greater meaning and purpose” to employees’ day-to-day work in the field that change occurs.  Vice President Gore did this with his Hammer Award program, where the White House directly recognized people in the field for their innovation.
  • Focus on providing more leadership, not more management.  Hierarchies focus on competent management, which is a good thing.  But Kotter says a strategy network “needs lots of leadership, which . . is all about vision, opportunity, agility, inspired action, and celebration – not project management, budget reviews, reporting relationships, compensation, and accountability to a plan.”
  • There should be two systems, but one organization.  “The network and hierarchy must be inseparable,” notes Kotter.  There has to be a constant flow of information and activity between them, which would be based in part on the fact that volunteers from within the hierarchy are also members of the strategy network.

Kotter say that this kind of network would permit individualism, creativity, and innovation.  Since the network would be populated with “employees from all across the organization and up and down its ranks, the network liberates information from silos and hierarchical layers and enables it to flow with far greater freedom and accelerated speed.”

Ideally, “the strategy network meshes with the hierarchy as an equal.  It is not a super task for that reports to some level in the hierarchy. . . The network cannot be viewed as a rogue operation.  It must be treated as a legitimate part of the organization, or the hierarchy will crush it.”

I saw many elements of Kotter’s vision in the reinventing government initiative in the 1990s, but it was seen as a rogue operation and was largely crushed, as Kotter predicted.  But that was 20 years ago and the demands for agility are even more urgent today. 

Where in government is Kotter’s model being used?  He was unable to offer private sector examples of its use.  Are there agencies or large programs with leaders who see the use of a dual operating system as a solution to their challenges?


Graphic Credit:  Renjith Krishnan via  FreeDigitalImages.net