Essential Balances: Stop Looking and Start Seeing What Makes Organizations Work

By Ivo Velitchkov

If you are a manager or leader in an organization – company, public service, or NGO – or you are simply interested in how to make your organization work better, then this book is for you. If you have the feeling that you are skating over the surface of what is really going on in your organization, if you know that there is something more vital that you are missing out on, if you're frustrated by applying the same management fads over and over, just with different labels on, then perhaps you are open to looking deeper into what makes organizations function, fail, and flourish.

This book will walk you through these questions and more. But instead of giving you answers and prescriptions, Essential Balances guides you through a whole new way of seeing, thinking, and being. You will see how to turn this into new habits, discover fundamental principles, and be able to see and influence the three Essential Balances:

•     Autonomy and Cohesion
•     Stability and Diversity
•     Exploration and Exploitation

Autonomy and Cohesion – Can you have freedom but keep everything working together at the same time? The rabbit is independent, not stuck to the ground, but what are the limits to its freedom? And now free, is it better off than the carrot it once was?

 

Stability and Diversity – Is difference and divergence at odds with a stable organization? How would you know? What can we learn from our immune systems about dealing with uncertainty?

 

Exploration and Exploitation – Should you go out and find new clients, new markets, or new opportunities or would it be better to wring the most out of where you are, what you have, and what you currently do? If you arrive late for a jazz festival and run into the first hall you come to, might you discover a new act that you love, but never would have picked from the programme?

 

These balances apply at all levels: personal, organizational, and societal. The habits to monitor, maintain and adjust them, start with noticing that they pervade everything we do. Then we must learn not just to balance ourselves and our organizations, but also to balance the use of the balances.

When we explore this and embrace the paradoxes of organizations and discover that it is those very paradoxes that make organizations vital and alive, we start to realise that it is dynamic balance – constant adjusting, noticing, shifting.So if you want to cast off the weight of management fads and fashions and glimpse wisdom that will change the way you notice the essence of everything, then get Essential Balances today.

 

ABOUT THE AUTHOR
Ivo Velitchkov is a management consultant and enterprise architect. For the last 25 years, he has worked with big public and private organizations helping them with their strategy, structures and information. He has worked as a project manager, CEO, coach, consultant, researcher, and trainer. In all these roles he kept searching for the deeper principles that support organisms, organizations and society to live, survive, and thrive. Ivo has a PhD in Computer Science. He lives in Belgium with his wife and two children. He enjoys jazz concerts, playing tennis, sailing, and grooving the bass in a dad-rock cover band.

• Language: English
• Publisher: Exapt Press
• Release date: May 26, 2021
• ISBN: 9781914549007

Book preview

Essential Balances

Stop Looking and Start Seeing What Makes Organizations Work

Ivo Velitchkov

Edited by

Rob Worth

Exapt Press

Copyright © 2020 by Ivo Velitchkov

First edition

The right of Ivo Velitchkov to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act, 1988.

All rights reserved.

No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without written permission from the author, except for the use of brief quotations in a book review.

Ebook ISBN 978-1-914549-00-7

Paperback ISBN 978-1-8383386-1-9

Published by: Exapt Press, www.exapt.press

Cover design by Sylvia Atipova

Edited by Rob Worth, WorthEditing.com

Contents

Foreword

Introduction

Notes

1. Autonomy and Cohesion

Notes

2. Stability and Diversity

Notes

3. Exploration and Exploitation

Notes

4. Stimuli and Responses

Notes

5. Productive Paradoxes

Notes

Epilogue

Acknowledgments

References

About the Author

Find Out More

Foreword

by Luc Hoebeke

The word simplify has two contradictory meanings. The first, reducing complexity by eliminating relevant issues, is what leads to reductionism, one of the characteristics of the classical scientific disciplinary approach. While the second, integrating complicated issues into a more unifying whole, is a more difficult way to deal with real-world complexity.

This book is of the second kind. It embodies simplicity by focusing on essential balances in organizations, and the depth becomes visible once one starts to go through the notes after each chapter. The notes refer to authors, such as Spencer-Brown, Stafford Beer, Varela, Glanville, Luhmann, and others, who have also been influential upon my career as a reflective practitioner. They are not easy reading, except for those who recognize their value in making sense of a practitioner’s complex relationship with the always undecidable dilemmas he or she is confronted with in organizational life.

The stories in the chapters, which at first glance are easy reading, stress an important perspective for understanding organizations: balance as opposed to equilibrium. Balance and tension are two sides of the same medal: when marching on our two feet, or riding a bike, we continuously put ourselves out of equilibrium, nearly falling but then keeping our balance. But sometimes we lose our balance and fall down on the ground. Nevertheless, we restart our balancing act, the only way to make us go further.

A balancing act deals with contradictions, never getting it right. This is in contrast to the simplistic algorithmic worldview, which looks for optima, win–win situations, best practices, and other problem-solving approaches.

The three balances Ivo develops in his book, Autonomy and Cohesion, Stability and Diversity, and Exploration and Exploitation, will be recognized by most of those who are not running away from tensions, conflicts, and contradictions in the way they work in organizations. Tensions, conflicts and contradictions, which are mostly seen as bad things, in fact, form the tonus of organizational life, and keep them out of the dead end of equilibria.

The last two chapters, Stimuli and Responses, and Productive Paradoxes, conceptually deepen the worldview behind the chapters about the essential balances. They stress where in the organization the balances manifest themselves: on its boundaries. It is on the margins, on the periphery of systems, where practitioners following Ivo’s perspective should put their focus and efforts to understand organizational dynamics. Where people in the organization are confronted with material reality, with the other ones, is where balancing acts are needed. Most boardrooms look alike and are places of equilibrium. That is why people in them fall asleep with a false sense of controlling the events, having their finger on the pulse through Excel charts, reports, scoreboards, data-mining results, and other virtual gimmicks, mostly copying what they hear other boardrooms are busy with, and helped by boardroom consultants.

What is marginal or peripheral, is not attractive, because it always has some chaotic character. Complexity is too often perceived as chaos! How easy is the helicopter view, which mostly only lets us see a cloud landscape? Boardrooms are often situated on the highest floor of the head office! And all cloud landscapes look similar.

Ivo’s book will help everyone who is concerned and loves organizational life to look where it is relevant. The contradictions and conflicts cannot be dealt with in a relevant way when there is no insight into the boundaries, which can emerge anywhere, even in the boardroom.

Everything human beings are doing, is done on a human scale. Recognizing the essential balances in every human-scale environment, on the shop floor, over the counter, and in the boardroom, may become a powerful habit for dealing with the unpredictability, the undecidability, and the complexity that human beings discovered can be dealt with by organizations and organizational life. This also requires simplicity, in the sense of humility. Understanding that each person in the organization has his or her idiosyncratic way of looking at organizational life, and trying to make sense of the conflicts and contradictions in a joint accommodation effort, is the way to resilience and balance, in short, to a fascinating life.

If we have a universe, which is improbable although it exists, it is because the Second Law of Thermodynamics has two forms. One is concerned with the pressure to even out energy: that is the form which belongs to our stereotyped conception of the universe. It betokens death. The other form is about information content, which leads to greater organization and increasing complexity. That form betokens life.

We should not regard these principles as contraries. We should not think the Second Law of Thermodynamics as warring with some perverse other law. These are forms of the same principle, which between them express the balance of nature.

Stafford Beer, Platform for Change

Introduction

In the late 1990s, I managed a software company for five years and stayed on the board for five more. The company started small, then grew, but not enough to match its ambitions. That’s why for all large tenders it had to partner with a well-established, international company, usually one of the big consultancies. This meant that our work had to be organized and delivered according to the respective prime contractor’s frameworks and methodologies. These prescriptions guided the way the change was implemented in the client organization.

It was fascinating and useful for me to learn so many different methodologies, even when they imposed restrictions that slowed down the actual service delivery. They all had some good bits and some limitations. The deficiencies I discovered inspired me later on, when I became a freelance consultant, to start creating my own frameworks, models, and methodologies. Yet, in the following years, I learned that no matter how good, scalable, or flexible such approaches may be, organizations are way too complex and their environment much too unpredictable to rely on prescriptions. Organizations can’t even rely on performance indicators, no matter how advanced we became in managing data.

Going beyond prescriptions and metrics was challenging but rewarding. What turned out to be even more difficult was to find a simple and clear way to share what I learned. I started doing it through workshops and now, after much honing, refining, and feedback, and in more detail, I’ve tried to do it with this book.

This book is about what makes organizations work, what it takes to see when they don’t work, and how to ensure they do when the environment is complex and unpredictable.

This book is also about balances.

When our meal is not tasty, we add salt. Just enough. If we add too much, it’s not tasty again – but in a different way. We maintain these kinds of balances with ease, and without thinking, in our daily lives, but we are not so good at seeing and maintaining balances in our organizations. This book is about acquiring that skill.

Why is this important?

We depend on organizations and on how they are organized. People spend most of their lives working in and with organizations. We are coupled with organizations. So everyone is happier if our organizations work well. And for some, it is their daily job to ensure that.

To be coupled with organizations means that we are mutually dependent and we co-adapt. But humans and organizations have had different starts on this planet. We humans have been around for millions of years. Organizations are much younger. They started appearing just a few centuries ago. No wonder that while in society we advanced to the level of democracy, most big organizations have only reached the stage of feudalism.

Indeed, what we call organization is young. But if we look not just at those that are organizations, but more broadly at things that have organization, we can accelerate our learning. And there is good and bad news.

It turns out, things that maintain their own organization have common ways to deal with environmental challenges. The good news is that we can learn from millions of years of evolution. But how can we grasp so much and access it in a way that’s useful and usable? What I find fundamental, and yet largely ignored, are three essential balances. They are common for organisms and for organizations, and they don’t depend on size or whether organizations are hierarchical or flat. New business models and new ways of working don’t change the importance of these balances. That’s also good news.

The bad news is that although the balances are common and only three are essential, there are infinite ways to maintain them. Retrospectively, we can find what worked, but we cannot prescribe it. We cannot extract best practices and develop methodologies. We can instead train our eye to see patterns and recognize trends before they become big problems.

But organizations can go out of balance in ways not experienced before. Then it is equally important to work on thinking habits and skills that we’ll need to invent new ways of restoring the balance.

Organizing

To deal with complexity, we organize. Organizing is powerful since it can both split and join. We break down what’s coming to us into pieces to make sense of it (split). But to handle the pieces, we group them by similarities (join). Then we distribute what comes next to one of these groups (split). When all that is too much for us to handle alone, we get together and create organizations (join). Then we categorize what’s coming to our organizations into different types of problems (split). Each problem needs work. We subdivide the organizations into as many divisions as there are types of problems so that each division can take care of one or a few problems (split). But our divisions still need to work together (join). When there are many divisions, and since they need to coordinate their actions, the internal complexity increases. The organization is our new world now, and it is complex by our own doing. We must keep organizing and reorganizing to deal with it.

Deal originates from divide. It initially meant only to distribute. Now it also means to cope, manage, and control. Yet it seems that we remained faithful to the original meaning. We manage things by dividing them. We eat an elephant piece by piece, we start a journey of a thousand miles with a single step, and we divide to conquer.

Meanwhile, we need to translate the unknown into the known. To do that, we devise classes of things (those groupings made by…) and criteria (…similarities) for classification. We know the current members of the classes and we know the rules to apply to something that is unknown so we can classify it. We deal the external stimuli (this time in the initial sense – without with), like a deck of cards, into the boxes we have devised, based on the properties the stimuli appear to have. Unlike real card players, these boxes cannot think.

But we can’t deal with bigger things on our own. We do things together, and if that works better, an organization emerges. It starts a life of its own and, together with us, it takes care of itself. The initial reason to be: if that works better, is quickly forgotten. This is not surprising, as the environment doesn’t sleep and throws us new challenges. To manage them, we now split ourselves into groups – new kinds of boxes. We classify the new problems and we put them into our new boxes. The new boxes, however, can think. They are like real card players. We call these small organizations within the organization, teams, units, and departments, and they all live a life of their own too. The new boxes get better at what they do and at handling threats and opportunities. Some gain power and begin to choose their cards themselves.

Occasionally a new card comes that doesn’t fit an existing type. Then we adapt our model. We create a new group to handle this new type of problem. The organization gets more complex. The new problem is taken care of, at least on the surface. Yet sometimes, this kind of response doesn’t work at all. To split as a choice (to analyze and classify), or the particular way of splitting (method for analyzing or classification), or the assignment (who is made responsible), does not produce the expected results. The new card that is dealt comes from an unfamiliar deck. It is bigger and refuses to get smaller. Being bigger doesn’t always make it easier to see. It might go unnoticed for a long time.

How can we deal with these stubborn cards? Sooner or later, the groups we split into are pressed to work together to handle these big cards. We respond by devising methods and technologies for coordination. In turn, the coordination methods take up resources, and at some point, they start to live a life of their own as well. We end up having different types of organizations within the organization, some for the core work, some for coordination.

Organizations are everywhere and some are so familiar it is easy to forget how much of our lives depend on them. We work for and live in and with organizations. Anything we do with others is some form of organization, from the scout pack to the tennis club, from the political demonstration to the kickaround in the park on a Sunday afternoon. Most of the products and services we use are produced and provided by companies. We are citizens of states and we participate in organizations as employees, members, managers, owners, or consultants. Our own families, in our house and connected down the street or across the globe, are organizations. Our health and the quality of our lives depend on organizations. On what they do and how they do it. On their performance and work environment. That’s why we are interested in having organizations that are healthy and functional. But how can we tell if they are or not?

Measuring

Traditionally, we judge organizations the same way we would an athlete: we measure. We measure the time an athlete takes to run 100 metres to rate her performance. In a similar way, we measure sales, client satisfaction, and cost of services in our organizations.

As the importance of performance measurement grew, we learned that these post-factum measures are not enough. They tell us too late that something is wrong. We started calling them lagging indicators. Our attention then shifted to live measures: leading indicators. With this grew the interest in studying business processes to spot a bad trend in time so we can take action before it’s too late. That worked up to a point, but only for routine, well-structured processes. Now we have fewer of those and more unstructured, knowledge-driven processes. It’s increasingly difficult to measure them, as each time a process is run, it is different. And how reliable is performance measurement anyway? We can rely on performance indicators when measuring a machine’s or even an athlete’s performance. But they are much less reliable with organizations. Why?

First, more than a century ago, quantum mechanics showed how measuring influences the measured. We successfully ignored this when creating new technologies. Then we thought we could also ignore it when measuring organizations. We expect organizations to be rational and work like machines. But they are not, and they don’t.

Second, we turn some measures into targets for people to achieve. But people are adaptive, and they find their own way to hit their targets. And often, it’s not the way those who devised the measures had in mind.

Third, we trust objective measures to understand subjective phenomena. Take the weather, for example. When I want to go out, I check the forecast. I’m interested in the temperature, but that’s only because I believe it will tell me if it is going to be cold or hot, or rather, if I will feel it as cold or hot. The difference made the forecast services also give a feels-like temperature, which accounts for humidity, cloud cover, wind, sun intensity and angle. It’s an attempt to overcome the shortcomings of the objective measure with a measure of objective subjectivity. Definitely an improvement. Yet, if I’ve spent the last six months in a warmer climate, my feels-like temperature will be lower than that of people who stayed in the local climate. And if I haven’t been anywhere, but just haven’t slept well, I’ll also feel colder. Even the colour of the houses when I go out in the morning may influence my perception of warmth. The feels-like forecast, no matter how good, will never know how it feels like really, as it can’t know the history, the context, and the condition of those who can feel.

One way or another, organizations can learn how well they perform, and they can learn to perform better. But often organizations function below their potential. Consider our athlete. She can’t run fast today as she doesn’t feel well. How can we find out what’s wrong? We might do a blood test, and any results that are outside norms will prompt further investigation of the problem. But that’s difficult to apply for organizations. Measuring their performance is already challenging. Diagnosing them is even harder.

That’s one of the objectives of this book. It will show a way of looking at organizations to help diagnose them.

Organizing uses the power of opposing forces, like separating and integrating (split and join), and it is successful when it balances them. Indicators of a blood test must be within a healthy range. Similarly, certain balances need to be maintained in organizations.

Prescribing

Once we are able to diagnose organizations, we need to learn how to heal them – or better – to teach them the habits of healthy living.

How do we traditionally go about it?

We look at successful organizations, analyze their practices, check what’s common, generalize, and try to copy. In other words, we create and use best practices, methodologies, and frameworks. Currently, there are many such tools. I know, because as I mentioned at the beginning, I used a lot and developed a few. The big consulting companies, and especially those that advise on management and IT, thrive on them. Consultancies recruit bright young people, train them to apply some proprietary or adopted methodologies, and then deploy their new consultants in the field to diagnose, advise, fix, and implement. But these young consultants are smarter than their tools. Soon they learn what works and what doesn’t. The former novices become too experienced to be wasted as individual consultants and get promoted, which means they are simultaneously pushed forward and pulled backward. They are pushed forward as speakers and negotiators so they can attract and win new business, and they are pulled backward as managers to steer the time-selling machine, oiled with good methodologies. This model makes methodologies and best practices in high demand, so the old ones get improved, and new ones are being produced at a high rate.

The first thing I realized when using methodologies is that there is no methodology that can guarantee success and not using any does not guarantee failure. I learned later that the adoption of a methodology or a practice comes along with a lot of hidden adaptations or productive misinterpretations. The success of most methodologies owes more to the adaptive capabilities of their adopters than to the qualities of the methodologies.

Methodologies and best practices may be very different, but they all have one thing in common: they are prescriptive.

Some best practices are very useful. In fact, most mature and well-applied best practices for carrying out some technical task, from taking a blood test, painting a wall, or repairing an engine, to building a factory or a ship, are indeed valuable (as long as they don’t suffocate innovation). Best practices are also valuable in training because that’s a controlled environment. They can help a sports team prepare for a match, but won’t help during the match. They are even less useful in organizations where the rules of the game change. Why is that? In short, best practices are based on correlations, oversimplification, and ignorance. Worst of all, they create bad habits. We’ll unpack these in turn.

How do best practices come about? Certain organizations become known as successful according to some norms. Let’s call these organizations best-practice pioneers. They become known because they are given exposure by the media or by the actions of best-practice discoverers. The best-practice discoverer studies the pioneers to find out what made them successful. The discoverer first takes certain effects, identifies commonalities, and selects what they believe were the causes of success. The commonalities are then generalized and embellished. From that moment, they begin their life as prescriptions. These prescriptions come packaged and labelled. Later they are tested, and then, based on feedback, reappear in more mature forms and variations. In some cases, they’re supplied with scalability criteria and conditions for successful application. The successes and failures of those that apply them give birth to best practices on applying best practices.

The first problem comes from the selection of patterns. The best-practice discoverers point to common patterns among best-practice pioneers. These common patterns are thought to be the reason for success by virtue of being … common. That is, of course, the well-known problem of correlation. But it’s more interesting than that. There are three intertwined issues. The first is the selection of what to pay attention to and what to ignore. It’s arbitrary and full of assumptions. The same holds for the second issue, which is the choice of the relations that are deemed to have caused success. Doing