1.1 The evolution of organizations
Organizations are incredible products of human intelligence. They are capable of endeavors which are hard even to imagine. Organizations have brought us where we are today. We have established ourselves as the dominant force of change on our planet, and despite the contradictions and possibly dangerous consequences of this, organizations have made us able to reverse trends and counter unwanted consequences of our activities.
The International Space Station (ISS) organization has combined the efforts of the space agencies of the United States, Russia, Europe, Japan, Canada, and many others to explore life outside the comfort of our planet, creating one of the most complex and ambitious organizations ever. In research, CERN, the European Organization for Nuclear Research, combines the efforts of 21 countries to promote our understanding of the basic building blocks of matter. This is an exemplary organization, where no country is in charge of the program, but all researchers work as a community, and member states are represented in a governing council which operates on informed consensus with the help of independent expert committees. And space is now open to private initiative and private organizations as well. SpaceX is a private company which operates rockets and space transport to the ISS, while seeking to develop a way to make space travel affordable for everybody.
All of this would not be possible if we had not been able at some time in our evolution to design ways to combine our efforts to accomplish the impossible. This was when the very idea of organization was born. Chester Barnard (1938) made a clear statement on the relationship between our ability to organize and our evolution, identifying in organizations the most advanced means to improve cooperation beyond the limits of existing social institutions. I have always been impressed by the vivid description of organizations as the furthest step in human evolution, and this is precisely why, as will become clear in this book, I consider them to be magnificent human achievements.
Hence this book is about organizations, and I thought it important to state what I think of them before criticizing how they have remained more or less unchanged for too many years. I have sought to convey the awe with which I see them operating in the background of our everyday lives. I cannot but be grateful to how organizing has allowed us to progress to what we are today. It is not that I think organizations are only for good. We have had, and probably will have, many examples of how the magic of organizations can be turned into forms of oppression and violence against other human beings.
The reason for this is that as soon as we start organizing, we create the conditions under which we can lose control of organizations and let them evolve as instruments that are under the control of the few, or even worse selfcontrolled by their own procedures. In a sense, when we organize, we run the risk of losing the power of individual action and initiative, which become subject to the rules, procedures, and goals of the organization.
We are born into believing that the only legitimate way to live together is to follow prescriptions that come from organized bodies of our society. At school we learn what is expected of us and how to behave accordingly. To be sure, in recent times the issue of human development has come under close scrutiny, and education systems are giving way to looser and more autonomous paths to self-development.
Given these limitations, the major question that has accompanied me in twenty years of research is this: how can we use these marvelous instruments while promoting the value of individual liberty? How can we reap the advantages of these elaborate forms of collaboration without converting them into institutions that exert so many constraints on our desires and ambitions?
Throughout my career, I have searched for an answer, first in evolutionary theories, trying to understand how organizations come about, how they evolve, and eventually disband and disappear. I thought that the life cycle of organizations might tell me something about the fact that, as Barnard (1938) stated, collaboration is very difficult to attain, but more importantly to maintain over time. Understanding what brings about organizations, how they unfold during their existence, and how they finally die, might be a way to understand. What I learned left me puzzled. I learned that many of these processes are out of the control of managers, and interestingly that there are times when it is precisely the belief by managers that they can reverse the future of the organization that leads them to failure. I have seen this happen in many different industries, and at many different times in the history of modern business. It was thus that mass beer producers in the USA were cornered by the sudden emergence of smaller microbreweries and brewpubs, or that dominant players could be easily outsmarted by emerging organizations in many other industries, like, for example, the immensely competitive mobile phone arena. It is not that managers at these companies were completely unaware of the oncoming risks or that they failed to react. They simply appeared unable to do anything to rethink their way of doing business. It appeared as if human agency, as it is defined in organizational sociology, did not suffice to manage organizations at times of change. Something made them so inert that they were unable to fight for their survival in the competitive arena. I confess that this made me much more skeptical on the hype surrounding powerful and visible management public figures. I am not so doubtful as to think managers cannot have an impact, and this book clearly states that they can, but I point out that we should not think of them as invincible. My perspective is that more humility and understatement might lead them to a more successful outcome.
Accordingly, while I appreciated the perception that some of these processes are beyond the control of the few in charge, I was dissatisfied because it appeared that no human actor could have any impact on the events being analyzed. Something was missing, as if a famous picture like Edvard Munch’s Scream lacked the key element of the shouting soul.
And that is exactly when I decided to investigate how organizations shape their relationships with individuals. Another ten years followed, as I tried to understand management and more specifically human resource management, reflecting on the connections between the organizational level and the broader societal level. My research was heavily influenced by my many encounters with HR professionals at very different companies and levels, as well as with many employees who attended training sessions or meetings during consultation projects.
Among the different experiences, one stands out. I spent several years consulting and training at a large Italian telecommunication company. The company enjoyed an excellent reputation on the job market because of its lavish compensation packages, as well as the smartness and competence of its employees, which was recognized on the job market. With no need to engage in formal employee branding (at least for the first ten years or so of its existence), the company was able to attract the best and the brightest. This was of particular impact at top management levels and within the HR function. Many top managers were former high-profile consultants from the Big Three, i.e. Bain, BCG, and McKinsey (strictly in alphabetical order!). The HR function was considered the place to learn what it meant to be a senior HR manager. I had an enjoyable time with them because smart people are always good to talk to and even more to work with and learn from. However, from the outset, I was fascinated by a semi-religious belief in performance management and calibration. The company had inherited the extreme performance culture of the consulting organizations that its top managers came from, and this had translated into an application of the GE approach to performance management, albeit affected by the limits imposed by Italian labor law. When people reached the time of year when performance management was approaching its final stage (evaluation and calibration), everybody was obsessed with mixed feelings. Some dreamed of being promoted or recognized; others feared a less than positive feedback; a handful courageously walked around as if they were DOA (which stands for “dead on arrival,” the term used for patients who are clinically dead upon the arrival of professional medical assistance – Wikipedia). The organization was completely absorbed by the anxiety connected with performance management, and everybody was feverish. What puzzled me was that few if any explicitly stated what most of them thought: the process had become a ritual, not a rational and technical tool. Once again, the power of the collective mood of the organization was stronger than individuals. Many of them recognized that their reactions to the performance management process could be considered irrational; but they were still part of that culture and organization, and felt that they had to comply. Individuals were trapped in their organization.
In my search for an answer to how to help people enjoy more liberty in organizations, I soon came to realize that the same issues in the relationship between the individual and the organization could be translated into the sociological analysis of society, and into the search for a solution to the paradox of human agency. In fact, fellow sociologists had been struggling with the need to understand how society appears at any time as a set of defined and structured institutions (which encompass a variety of elements like habits, rituals, role systems, processes, laws, organizations, etc.), while human beings can still be actors, which means that they can promote and enact change. The interplay between organization and individuals could be seen as a specific case of a broader problem. However, the different solutions to this problem still pointed to the dominance of collective institutions over individuals. Human action is always limited by powerful factors which appear to be out of reach. It is as if the blessing of being able to create powerful societal structures as a way to thrive comes with the curse of being somehow subject to their unintended consequences in terms of how they restrict our freedom. If we adopt this perspective, the problem of change in organizations can be interpreted as a conflict between a deliberate plan by human actors and the web of resistance that is embedded in any existing organization by virtue of the structure of roles and the nexus of relations among its members.
I began to investigate the possibility of conceiving organizations as means to allow freedom to flourish, and I started conceiving of them as powerful systems designed to limit that freedom. I still could not completely believe that there was no alternative or that it is impossible to design a different kind of organization.
When I finally thought of this book, it was as if every piece of the puzzle finally found its place, helping me to define the framework on which it rests. My experiences as a researcher and a practitioner were finally converging into a clear perspective on organization.
Evolutionary theories had brought to me the idea that despite all the efforts to impede it, change is happening. I am a firm believer in change, constant change as continuous testing of our limits. Despite the fact that we experience many of our organizations as stable, they thrive with the changes which originate from the irrepressible desire of humans to experiment in different ways with their lives. The fact that change is occurring notwithstanding all the limits imposed by organizations testifies to the importance of individual and human action. While it is reasonable to assume that some changes are consequences of external factors (for example, the drought in California during the summer of 2015, which induced decreased water consumption and identification of possible new sources of water), what I mean is that the core of change is action by individuals and groups. It is only through successive and interconnected choices made by individuals that change comes about. At times, such change may be short-lived and without any real impact on the overall organization; but at other times it will diffuse, become viral, and lead to transformation. This makes me think of how organizations impose barriers and boundaries on our experimentation for the sake of accountability and reliability. Because our actions can have important consequences, organizations are designed in a way that makes it possible to understand who did what so that someone can be held accountable for the impact of their action. Moreover, many processes are repeated in time, and organizations come to be designed in order to ensure reliability, which is the ability to reproduce exactly the same set of actions when required. Reliability is particularly important in manufacturing when the organization must reproduce the same product exactly as it has been designed. In a sense, organizations exist to make change difficult, as a consequence of a model where reproduction is the key competitive factor. In doing so, though, organizations limit innovation and change, and promote inertia. Despite the difficulty, individuals keep changing, and they try to escape from the normalizing and standardizing impact of organizational processes and procedures. At very specific times, however, some of these changes may be considered necessary by the organization and allowed to be implemented or at least tested; or they may simply be so powerful that they emerge notwithstanding any limits imposed on them. Instead, many other, potentially useful, changes will disappear without trace.
From my experience with organizations and people, I believe that action is rooted in our existence, and that it is what defines us as a species. It can be prevented only by setting limits on what we can or cannot experiment with. We have designed organizations to achieve ambitious goals, but there are times when these collective endeavors exert a powerful influence against our desire to do things differently. When this happens, we find ourselves in a struggle between our nature and the necessity to comply with the organizational system. This is a constant struggle from one battle to the next. Eventually, some people give up. It is not that they do not want to change; rather, they accept that they cannot do so within the organization for which they work and look elsewhere for ways to satisfy their basic need for change. Others persevere, or they may even take the lead in pushing organizations into change. The interplay between the human desire for change and resistance by organizations is so complex that I further believe that there is no single path to the future, that there is no hidden project for us, and that there is nobody who can forecast exactly what will happen.
Only experimentation and conscious action can take us in random walks toward the future through which we can find effective routes for future action. This means that in regard to designing our future, I adopt a strictly evolutionary approach whereby we need to promote as many alternatives as possible, test them, learn from the results, and then move on with constant attention to challenging assumptions which worked in the past to verify whether they can still work in the present. The problem is that all these processes occur within a context defined by organizations that have been explicitly designed to limit the evolutionary process that I have described. As a consequence, we experience much less change and experimentation than we could; more importantly we sacrifice so much human talent and innovation on the altar of reliability and accountability.
In conclusion, in the debate on structure (social systems and institutions) versus human agency, I side with human agency, and I maintain that every structure should be considered as a partial equilibrium that tries to reinforce itself, but which we need to keep under control through the constant production of change. If we are really entering what popular videos online define as an exponential world, we need to completely reshape how we organize collective action.
