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Liquefying an Organization to Increase Agility

| by Ben Linders Follow 26 Followers on Dec 05, 2014. Estimated reading time: 6 minutes |

Organizations look for ways to increase their agility and becoming more adaptive and responsive. There a new wave of modern ways for managing organizations, supporting transparency and self-organization, taking off.

LiquidO is an organizational governance model for arranging activities and decisions and giving credit, allowing everybody in an organization to take part in management activities. On December 8 Stelio Verzera will talk about liquid organizations at the Dare Festival Antwerp 2014.

InfoQ did an interview with Stelio about the LiquidO model and its benefits, liquefying organizations, and on modern ways of managing organizations and increasing agility in organizations.

InfoQ: Can you give an overview of the main principles and practices of the Liquido model?

Stelio: LiquidO is a last generation governance model. It is lean, inclusive and open, allowing all the people in an organisation (from a project team up to an entire company) to take part in the management activities. It doesn't have pre-defined hierarchies, and aims to close the gap between the formal organisational system and the actual one.

Strategy is co-created, governance activities can be proposed by anybody, facilitated and discussed by anybody. People join the activities where they think they'll be able to produce value for themselves and/or the entire company. This includes decisions.

The more value a contributor is creating, as per peers evaluation on the shared activity, the more she will receive compensation and decisional power. And the better reputation she will develop in the system. Reputation tracing, based on activities and results, and complete transparency on any work stream and its outcomes, enable stigmergy and continous systemic learning.

InfoQ: At the DareFest conference you will be talking about liquefying an organization. Can you explain what you mean with this?

Stelio: If you think about the formal structures that we used to design and implement in order for an organisation to be stable and predictable, you'll picture a rigid structure. Who is in charge for what, which governance part people are assigned to, whom people have to report to and obey to, are all pre-defined and static parameters. The Tayloristic separation between people who have to think and decide, and people who have to act and execute is right in the heart of this picture.

In the current high complexity landscape this way of conceiving and managing organisations is simply no longer the best one. The lack of adaptability produces big performance problems, and the stats about managers difficulties and general work disengagement are astonishing today.

Liquefying an organisation means to heat the system up in order to break some or most of this bonds, making it more adaptive, able to take the form it needs in any given situation, and giving people the real chance of freely moving within the system where and when they feel they will create more value.

InfoQ: What can be the benefits that organizations can get when they become more liquid?

Stelio: As said, real time adaptability for sure. Even more, quoting Nassim Taleb, I'd say anti-fragility.

Moreover, better and faster information processing, meaning improved decision making based on systemic real-time listening and knowledge growth, and resulting in superior value proposition for all the stakeholders.

Last, but not least, a very strong engagement of all the people working in such an organisation, due to their freedom to understand and decide how to feel valuable and grow, expressing spontaneous and dynamic leadership.

InfoQ: There a lot of talking about increasing the agility of organizations, reinventing organizations, liquid organizations, management 3.0, making organization leaner, etc. Are these only buzzwords or is there a new wave on managing organizations taking off?

Stelio: There is a huge world-wide wave currently building up. And as any wave it is showing its buzzwords.

What I believe to be really important is a Coperican revolution represented on two main sides. First, the purpose of the organisation, which is now much more systemic, platform-like, interdependent with the rest of the actors, and definitely not even close to the "ancient" idea of maximizing shareholders profits as the ultimate goal. Second, the death of the organisation itself as the center of gravity around which people have to adapt and define themselves, now leaving space to a new breed of organisational systems able to adapt to what is needed by people to be effective and operate. People are back in the centre.

Actually, from my perspective, what is going on is a much broader shift for mankind from and ego-based "teenager" era, to a more mature age of interdependency-conscious society. What we're living is just the beginning of it.

InfoQ: Although teams are becoming more and more self–organized, self-organizing organizations are still rare. Some examples of organizations that apply self-organizing are ut7/, Spotify  and Jimdo. Do you have other examples of self-organization applied throughout the whole organizations? How did the journey go?

Stelio: From Dee Hock's adventure with VISA to our friend Doug Kirkpatrick experience in Morning Star, through many other cases such as for example Valve Software, this is something really big and not even new. There have been and there are many experiments in progress. It is currently going mainstream, there is much more interest, and the number of experiments will grow exponentially in the next few years.

In my experience such kind of journeys have three main "types" of starting point.

  1. You are starting a new organisation and, as it grows, you want to keep its adaptability and leanness, so you start looking for new ways of achieving that.
  2. You manage or own an established organisation that has its own momentum and is going well, but you have perceived that in five to ten years from now you'll have to act in a whole different world, and so it is now time to start steering your momentum towards a different organisational direction.
  3. Your established organisation is no longer able to cope with the current level of complexity, it's losing performance and sustainability, thus you need it to evolve in order to survive.

InfoQ: Increase agility in organizations and making them more liquid can be challenging. Can you name some of the main challenges? How can you deal with them?

Stelio: The ultimate challenge is the old "command and control" organisational culture. We're finding strong traces of it even in people working on the edge of these new models and breathing them every day. We have more than 100 years of "karma" to burn on this side, and it is not easy at all. Our current institutions are built on this culture, the very concept of "work career" is based on this, and even our education system is structured out of the assumptions that come from it.

The deep systemic trust that is required to shift to the new consciousness of co-creation and inter-dependence and to the operational "organic" models derived from it, is not something that comes out of the hat.

We are constantly dealing with this issue in Cocoon Projects, talking as few as possible and acting the most we can. When we work with an organisation to help its evolution, we do not bring talks and lectures, we bring new tools and practices that can be adopted. Through them a new culture starts to blossom, beginning to shift the organisation in the directions of leanness, inclusiveness and/or openness. LiquidO sits at an evolved stage of all these three directions, but the very path towards it already has a huge value to offer and discover.

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