PART TWO: THE OPERATING SYSTEM 94% of problems in business are systems-driven and only 6% are people-driven. --W. Edwards Deming Becoming a people positive and complexity conscious organization can be overwhelming. It''s hard to know where to begin, or what matters most. But through the careful collection and tagging of hundreds of unconventional practices from around the world, I found that Evolutionary Organizations are converging on twelve domains as the proving ground for the future of work. It is in these spaces that the courageous few are taking risks. And it is in these spaces that struggling enterprises will likely find their faults. Together they form a canvas--an Operating System Canvas--through which we can see and shift our organizational identity.
The OS Canvas PURPOSE How we orient and steer AUTHORITY How we share power and make decisons STRUCTURE How we organize and team STRATEGY How we plan and prioritize RESOURCES How we invest our time and money INNOVATION How we learn and evolve WORKFLOW How we divide and do the work MEETINGS How we convene and coordinate INFORMATION How we share and use data MEMBERSHIP How we define and cultivate relationships MASTERY How we grow and mature COMPENSATION How we pay and provide THE OPERATING SYSTEM Each domain of the OS Canvas asks us to consider an aspect of our organization more deeply than we typically would. For example, what is authority? How should it be distributed? And how does that manifest (or not) in your culture? How do you make decisions? How should you? Is your approach to authority a signal-controlled intersection or a round- about? Is it People Positive and Complexity Conscious? The canvas forces us to confront the deltas between our assumptions, our beliefs, and our reality. If we say we want to hear every voice but spend most of the day talking over others, that tells us something. If we say we value agility, but every decision requires a dozen approvals, the opportunity is clear. In the pages ahead, we''ll explore how each of these domains is changing, the provocateurs that are shaping them, and the emerging principles and practices they''re pioneering. Each domain is broken into five parts: an overview that introduces the concept, thought starters designed to challenge your assumptions, ways to take action and try something new, insights on navigating the domain in change , and ques- tions to consider as you reflect on and reinvent your own OS. You may have noticed that the domains of the canvas are generic and value agnostic. That''s intentional.
We want to ensure that any orga- nization can leverage the canvas regardless of its organizational philosophy. The Morning Star Company, for example, has found huge success in the domain of structure by revolutionizing traditional job titles and roles. Every year, four hundred full-time employees at the world''s larg- est tomato processor write their own job descriptions. They do this by authoring a Colleague Letter of Understanding, or CLOU, that contains their commitments to and agreements with one another. CLOUs are reviewed and challenged by colleagues who offer advice , not mandates, about what should change. Since this document changes every year, there''s no need for traditional job titles or promotions. But that''s okay, because everyone adjusts their own salary as they learn and grow. The math works out.
While their industry grows around 1 percent a year, Morning Star has averaged double-digit revenue and profit growth for the past twenty years. Today it generates more than $700 million in revenue. In an indus- try that normally treats workers as expendable, it has managed to create a way of working that rivals any unicorn for innovative and human- centric design principles. But this approach to structure may not be right for your context and culture. Your approach may be more or less radical or aligned in spirit but different in practice. That''s fine. My only ideological prescription is that People Positive and Complexity Conscious mindsets have the power to reshape these spaces for the better. Every culture has elements of the traditional, the contemporary, and the idiosyncratic.
The canvas is a tool for reflection and sensemaking, not judgment. Further, this canvas is not intended to be mutually exclusive or comprehensively exhaustive. From a complexity perspective, reducing an organization to its independent parts is folly. The canvas simply highlights the areas that our research tells us are most in flux. Better to start in these dynamic spaces than to remain immobilized by the sheer intractable nature of it all. At some point in this tour of the OS you''re going to start to wonder, How the hell do I lead my organization through a change as profound as these cases and stories suggest? And what if it doesn''t work? Don''t let that slow you down. The remainder of the book is dedicated to sharing all the lessons my colleagues and I have learned in the trenches with organizations trying to make it to the other side of the rainbow. The transition to a better way of working can be made.
But not with the change management they teach in business school. You''ll need every ounce of your People Positive and Complexity Conscious conviction, and more than a few of the tips and tricks you''re about to discover. As we dive deep into these twelve domains, just remember: The problem isn''t your leaders. It''s not your people. It''s not your strategy or even your business model. It''s your Operating System. Get the OS right and your organization will run itself. In 1970 Milton Friedman famously said, "The social responsibility of business is to increase its profits.
" To put it bluntly, the business of business is business. In the decades since, Legacy Organizations have inter- nalized this to an astounding degree. As we''ve seen, this maxim has led corporations to optimize everything in society--the market, the law, even our attention--in order to drive short-term gain. At the same time, the cost to humanity and the environment has been profound. Unchecked growth has created the conditions for a climate crisis that is unfolding in real time. This singular focus has also led to rampant inequality and a level of worker engagement that is pathetic at best. A mission statement that places shareholder value as the definition rather than the result of success is uninspiring. Jim Barksdale, former CEO of Netscape, once quipped, "Saying that the purpose of a company is to make money is like saying that your purpose in life is to breathe.
" Instead we can elevate purpose above all. Given that we spend so much of our lives at work, wouldn''t it be nice if that work were worth- while? If it delivered meaning and connection? Take Whole Foods, for instance. If you were to read its "Declaration of Interdependence," originally authored in 1985 by sixty team member/volunteers, you''d see that the company''s purpose is to "Nourish People and the Planet." Five words, but a lot of information. Now, what about grocery giant Kroger? Why does it exist? Its stated mission is "to be a leader in the distribution and merchandising of food, health, personal care, and related consumable products and services." Yawn. Imagine showing up every day for forty years with that as your rallying cry. Purpose can be socially positive or socially destructive.
After all, the key difference between a charity and a terrorist organization is intent. Which is why Evolutionary Organizations aspire to eudaemonic purpose--missions that enable human flourishing. And what of profit? Profit is the critically important fuel that powers our purpose. It''s the air we breathe. Without it we can''t scale our impact or realize our vision. Which is why the vast majority of Evolutionary Organizations are quite profitable. In fact, the socially conscious and purpose-driven companies featured by professor and author Raj Sisodia in Firms of Endearment have outperformed the S&P 500 by a staggering 14x over a period of fifteen years, ten of which were after the publication of the book. A great purpose is aspirational, but it''s also a constraint.
It focuses our energy and attention. It places a boundary around our efforts by saying, Here is where we will build our dream . Too mundane (e.g., share- holder value) and we lack meaning. Too vague (e.g., change the world) and we lack focus.
Too concrete (e.g., a computer on every desk) and we can find ourselves rudderless after the moment of victory. Done well, purpose unites us, orients us, and helps us make decisions as we go. Thought Starters Fractal Purpose. Every organization has a purpose. But not every orga- nization ensures that its purpose is fractal--that it shows up at every level. While we want to avoid bureaucratic alignment exercises, teams should have a coherent narrative about how their efforts serve the whole, even if they''re intentionally pursuing a divergent path.
The team''s purpose serves the same function as the organizational one. Even individual roles have a purpose that, i.