Earthquake ... the techno-shock that reshaped our business and social worlds.

And introducing a solution to counter one of the least considered or understood impacts!

“Have you seen the new plan? It’s bloody mad, you know.”

That statement, when it comes from someone in an organization, may be the precursor to a valuable input. Or, it may precede a really stupid opinion. But, hey, you can’t know either way if the opportunity for the opinion to be stated is simply not available. And, all too often, that seems to be the state of affairs in today’s businesses.

In the pre-digital organization, with everything in-house, the formal activity of any enterprise was complemented by a hardly-ever-thought-about informal system that provided myriad inputs. It was ‘hardly-ever-thought-about’ because it was simply assumed to be part of ‘the way things are’.

Some of the inputs were prompted by misunderstandings, prejudices, or downright bloody-mindedness … but, sensible or not, they did potentially provide checks & balances to help keep the whole endeavour together. And sometimes they uncovered efficiencies, cost savings, innovation opportunities and other beneficial outcomes. And, always, they provided a regulatory pressure valve for the very human feelings of the mass of people involved.

However, because the system was informal it was arbitrary, haphazard and incomplete. But it was at least something because it was a channel for thoughts and ideas, hopes and fears. And that was immensely valuable.

Then came digitalization … and sounded a death knell for the informal system. It is a huge irony that new technologies that gave us hitherto unimagined scope and efficiencies, consistency and growth opportunities, and global communications’ reach, also brought the risk of ‘over-control’, ‘over-rigidization’ of the human inputs. This is surely one of the causes of oft-reported employee dissatisfaction, burnout and mental malaise that we hear so much about these days.

The vastly increased interconnectivity enabled by new tech led to a fragmentation of businesses, and unprecedented changes in employment and working practices, that split apart various levels of employees and made their continued informal contributions difficult if not impossible.

But humans aren’t robots. We need to bring back some of the humanity that has been lost. More on this topic will follow in subsequent posts but, for now, here is a quick overview of the recent mega-change, some of its implications, an a brief introduction to a solution.

First, the change initiator …

The change initiator - the zeros and ones based concept of digitization – was already well understood when, in 1943, IBM’s Thomas Watson announced the Harvard Mark 1 computer. It was a real step forward in computing, but to move from the change initiator (digitization) to the change accelerator (digitalization) required a means to move from mechanical to digital communication.  

It arrived on June 30, 1948. That day, Bell Labs announced that, thanks to Messrs Bardeen, Brattain and Shockley, there now existed a thing called a transistor. This momentous event got just a small mention on page 46 of that day’s New York Times.

Even six years later, the transistor was still thought to be of interest only for military communications applications and hearing aids. However, in 1954 Texas Instruments produced the very first transistor radio, yours for just $49.95 … but then promptly abandoned it! Presumably they reckoned that the transistor could not out-compete the valve or vacuum tube which was the established technology of the day.

But someone thought differently, and it wasn’t RCA, Zenith or Philco, who were the American communications giants of the time. No, it was a company that had only been founded after World War Two in Japan. Sony. And when, in 1960, Sony started using transistors in televisions, it marked the demise of the U.S. consumer electronics industry.

Thereafter, as we all know, the rate of technological change just kept on rising. The Digital Age was on the march.

But, in the run-up to the millennium, our business minds and attention were still attuned to then-familiar drivers of‘ the mechanical age, ‘The Product’ and ‘The Vertical Market’. So, when Amazon came along in 1994, nearly everyone (including me!) thought it was a new ‘book-seller’ making a precocious attack on Barnes & Noble. It took a while to realize that it was, in fact, much, much bigger: Amazon had just created a universal sales platform.

Thus it was that everything about the focus of a Business changed. But, if we use the metaphor of an earthquake, it seems to me that we tend to focus on the changed landscape that is the result of the upheaval. But, what is as or more important is an understanding of what has gone on under the surface - the real mechanics of the exercise and what hidden events contributed to the New World thus created.

… then, a peek under the surface.

Once upon a not very long time ago, enterprises were always thought of as ‘vertically constructed’. For a start, all or most of an enterprise’s functions were usually in one place or fairly closely geographically situated. And the corporate hierarchy was definitely vertically-organized. Quite literally. The ‘workers’ at or near ground level, and the management arranged in layers of ascending seniority going up, up, up towards the penthouse heaven where the Big Boss ruled over his (almost always a him) dominion.

As the offices ascended, they became more spacious, with more luxurious carpeting, better furnishings and smarter appurtenances – often including the glamour of a secretary who jealously guarded her (almost always a her) particular corporate lion … plus perhaps even a coffee machine.

Okay, I’m being a tad facetious, here, but you see the principle? In the 19^th and 20^th centuries, this was a manifestation of homo hierarchicus – everyone in their place and all right with the world.

It led to several important outcomes, chief among which was the fact that, companies were micro versions of the human societies where they were situated. The entire spectrum of employees often knew of one another even if they were not closely connected. And, frequently, they were closely connected. In one of the finest accounts of the English working class¹, the Hartley Jam factory at London’s Elephant & Castle is effectively a character in the story - an ongoing, linking feature where generation after generation of local families worked.

These companies were multi-class ‘hives’ that even featured their own social resources where everybody could participate: social clubs, sports clubs and the like. And the shared links into the wider communities went deep – to the local churches and schools, for example, and certainly in the UK into the favoured public houses that people frequented.

And, in all of these situations, and at all of these places, people talked or, equally valuable, learned to keep their mouths shut. In other words, it was all connected with ‘community’.

En passant, the importance of this societal link was fully recognized right from the start of the modern era. Adam Smith (1723-1790), in The Theory of Moral Sentiments (1759), addressed ‘sympathy’:

Sympathy in Smith’s moral world acts much like self-interest in his economic world. Sympathy is the invisible hand supporting human social orders. For Smith, while sympathy helps to create social order it is always grounded in the individual, who sympathizes from his own subjective, but nevertheless socialized, viewpoint. … Sympathy, combined with habit and self-interest, provides a way to moderate our passions and adjust our actions to fit those of our neighbors and friends. This gradually creates a kind of conformity of opinion and habit. This conformity allows the community to operate most of the time with little conflict. By moderating behavior, sympathy thereby allows those around us to predict the behavior of others. This predictability allows us to plan our lives.²

Coming back much closer to the present, here’s Sir Billy Connolly in a documentary about his life in the Clyde shipyards in post-Second World War Glasgow:

Working on the Clyde was hugely intimidating to a boy. When you’re sixteen you might have hairs on your chin, you might get drunk, you might even get somebody pregnant, but you’re still a boy ... As a boy you clamour to be heard above the crowd. When you walk into a man’s world you quickly learn to shut up, listen and watch.³

And, to my point about public houses and the like, Billy Connolly talks, too, about one pub of particular importance to him, The Saracen Head. Sitting in what was nicknamed ‘The Sarrie’ he explains:

I may not drink anymore but I still love the culture that goes into a pub. The noise. The unspoken rules. The language of the crowd. It was all music to me. This sounds outrageous but women weren’t even allowed in here until 1989. Everybody speaks about the male only thing as if there was something wrong with it but it was a lovely thing. You know, mixing with the guys, and there’s a thing about male company that I like very much. And it isn’t just dirty jokes or talking about football – there’s a mixture of things that men like to talk about to each other. It was a lovely bit of my life and I kinda miss it. … Politics. Books. Films. Family. Football. Religion. Everything was on the table to talk and argue and take the piss out of each other with. But the thing that united tens of thousands of men across countless pubs across the city was the job. (My emphasis.)

There you have it in one sentence. Work, the job, for every stratum of society, was a fundamental component of … well … everything. The connections went deep and enabled the broad social functions outlined above, and more. Here, for example, is Ben Judah writing about Harlesden in North London and how the twentieth century working world helped incomers to assimilate:

Once there were enormous industrial estates along the thundering lines into London, thumping tracks wider than the Thames. Railway cars would unload ton upon ton of Sheffield steel and Durham coal. These were the big mass jobs where, in the 1950s, the Jamaicans and the Irish became British: working on huge lines in the plants with other men who got you to go to the football or the pub. But those industrial estates have almost all shuttered. There are no more production lines in Harlesden now: Poles, Somalis, Nigerians – these men work alone, atomized as pickers, drivers, cleaners, builders.

So, the informal social systems (and Adam Smith’s ‘sympathy’) helped build loyalty and positive participation within individual businesses, and built loyalty and positive participation within the wider society.

But, then, digitalization meant that the entire Western industrial construct was thrown up in the air and scattered to the four corners of the Earth: for enterprises, a shift from Vertical & Local to Horizontal & Global.

Yes, this did bring opportunities for prosperity to some formerly deprived parts of the world, but it cost the old-established industrial areas dearly, not just in terms of economic activity but also in terms of their social structure and social cohesion.

The informal system that few even thought about.

If you read the literature of Business management, right from Frederick Winslow Taylor’s 1909 genre-starter, The Principles of Scientific Management, you’ll find there is a way that everything is supposed to work. It goes something like this:

1. The Big Boss and executive team set aspirations for the Business. Crucially, the aspirations are all rational: they’re based on market, shareholder and analyst expectations, competitive demands and what the Big Boss personally wants the business to achieve.

2. These aspirations are then articulated as results the business must achieve in the short- and long-term.

3. Organizational structures and business & management tools are then put in place to help the organization achieve the stated results.

4. The leadership mandate, and the structures and tools, all lead to decisions being taken in the organization that are aligned with the stated aspirations.

5. These decisions, along with the tools, structures, and aspirations, lead to behaviours of people throughout the organization that are aligned with achieving results on the pathway to realizing the aspirations.

6. The results are achieved, and the organization learns and is motivated by them.

But here’s the thing … it’s all rubbish, all nonsense. This idealized model of how things should work, imposed in a top-down manner, has only ever produced, at best, limited results. The sequence does not perform as dictated. Rather, by virtue of factors such as competition, technological developments, workforce expectations and, most fundamentally, plain human nature, things run, to a greater or lesser extent, out of control.

So, what actually happens on the front line is frequently disconnected and different from the aspirations and direction given by leadership. It follows, therefore that, when leadership wants the organization to “go left”, some people go along with the instruction, but others chose to “go right”, and yet others spend their time discussing the decision and doing absolutely nothing.

The irony is, people always knew this. We long-since learned that Businesses are not made up of discrete, rational blocks. They are more like masses of molecules, all moving in different directions, with different motivations.

Therefore, performance comes from harmonizing the motivation, flow, and energy of people in an organization, rather than managing discrete elements.

What is more, people, individually and in groups, are not infrequently irrational and illogical … and, of course, emotional and political.

You see where this leads? The management tools need to fit the reality of the organization and its starting point. Which, in turn, means that it is necessary to instantiate an ongoing process to assess (and I know this sounds, at first, like a contradiction in terms) how individuals feel en masse, and whether or not they feel that they are moving forward together.

This process of assessing the ‘molecular coherence’, or lack of it, of an organization is necessary because of a range of factors …

Behaviours are influenced by individual experiences and information in the real world.

Decisions are not always fact-based, or the facts that are used are not relevant to the real (and local) world.

Tools and structures that are set up exclusively with a top-down view of the world may be inappropriate for the reality of the business, leading to results that are sub-optimal and/or unsustainable.

To make matters worse, when attempts are made to change behaviours, decisions, tools, and structures, without first getting to understand peoples’ experiences and motivations, the people involved become frustrated, and their behaviours will more likely become more emotionally and politically motivated.

What’s the answer?

The answer is called ‘R’, which is shorthand for ‘Relational’. It is a means to reintroduce a genuine group human dynamic back into today’s digitalized, stratified and atomized working environments.

The imminent need for such a system was identified more than ten years ago by Dr. Olaf Hermans when he was at Penn State University. Since then, Dr. Hermans has developed the system and tested it in real-world applications, including with a European national bank and a hospital group. For the past seven years, I have followed the developments and tried to contribute in some small part to the progress of the project.

It has now been proven that companies can deploy R in a planned, controlled and more ubiquitous manner than was possible under the old informal system. So, the old informal system can be replicated with a purpose-designed methodology, and supporting technology, that enables far greater ‘reach’ and consistency than was possible in the past.

Stand by for more about this topic in further posts in this ‘Earthquake’ series … including some direct contributions from Dr. Hermans.

But, for now, thank you for reading.

1. Collins, Michael. The Likes of Us: A Biography of the White Working Class (2004)

2. https://www.adamsmithworks.org/documents/smith-on-sympathy-lauren-hall-12-1

3. Billy Connolly: Made in Scotland. BBC Television