Envisioning created the goal. Strategizing formed the plan. Now the hard part: putting the plan into action. Humans are cooperative social animals, and executing almost anything interesting involves getting people to work together. How you see people working together to achieve your plan is your design. This includes not only employees, but any other stakeholders – vendors, investors, advisors, regulators, and so on. Who is responsible for doing what? How are they organized? How do they interact with each other? The answers to these questions are your design. If you have designed well, the design will produce outcomes that execute your strategy. If you have strategized well, you will achieve your vision.
In what should now feel like a familiar story if you have been reading this series, the Old Business Playbook (OBP) approaches designing in the same rational, reductionist way that it approached envisioning and strategizing. After both selecting an opportunity and devising a plan based on dispassionate analysis of available data, the OBP tackles design by first logically arranging the work to be done into neat units, then grouping the work units logically into coherent functions, and then linking the functions together logically to form both organization structures and process maps. Then, and only then, you put people into your neat, logically ordered boxes and voila: you have a design.
In our last post, we introduced a principle that is in many ways the Supreme Commandment of our New Business Playbook (NBP): Design for People. The way the OBP approaches design is exactly the opposite. “Don’t design for people!” is quite literally how many of today’s business educators and industry titans counsel legions of rising managers. First structure the design based on what the business and its strategy needs. Then slot people into the design. Designing, for the OBP, means structuring for the business.
Like most elements of the OBP, this approach to design made sense in the world in which the OBP was formulated. Eli Whitney’s revolutionary system of interchangeable parts in musket manufacturing sent shockwaves across the world and brought about the creation of the assembly line. The assembly line was adopted by meatpackers in Chicago and later famously by Henry Ford in the manufacturing of his automobiles.
Assembly lines are built around rules-based jobs. When the car reaches the appropriate point on the station, you affix the wheel. When the wheel is steady, you affix the lug nuts. When the lug nuts are affixed… and so on. In this description, the “wheel”, the “lug nuts”, and most critically the “you” are interchangeable parts built (or hired and trained) according to some standard specification. If a part fails, you can replace it with an almost identical one.
The industrial revolution had ensured that raw materials like steel were being churned out in plentiful supply and labor was moving in droves from the fields to factory towns. The labor was cheap but unskilled, and it made sense to treat people just like any other raw material—i.e., create a strong specification for interchangeable unit parts that you can plug in to the machine. This standardization increased efficiency, productivity, and consistency. So it made sense that designing meant first structuring a collection of rules-based jobs with standard specifications and linking them together into rules-based processes and hierarchical control structures. First make neat logical boxes, then slot people into them. Just as you wouldn’t want your wheels to suddenly change diameter, you wouldn’t want people to suddenly decide to turn the crank three times instead of two.
The context that made rules-based jobs a profitable way of organizing people remained for a surprisingly long period of time in a surprising variety of industries, not just manufacturing. A lot of medicine is done through rules-based diagnoses leading to rules-based treatments, and doctors are trained according to thorough standard specifications so they can be interchangeably slotted into different clinical practices and hospitals. A traditional airline business was a collection of rules-based jobs—ticket agents, check-in and gate agents, flight attendants, mechanics, and even the pilots (perhaps especially the pilots). Even software development has traditionally been organized into rules-based jobs, famously parodied in the movie Office Space: “Yeah. It’s just we’re putting new coversheets on all the TPS reports before they go out now.” A TPS report (Testing Procedure Specification) is a real document used in software development that describes the standard testing process and procedures.
A Brave New World
As we have discussed previously here and here, the world has changed fundamentally in the last two decades in ways that are difficult to overstate. Today’s world is no longer one in which it makes sense to create designs that are structured into interchangeable rules-based jobs. There are several reasons for this, but we will discuss two here: computing power and connectivity.
Every computer science major learns how to make an algorithm in Programming 101. An algorithm is a self-contained set of rules laid out in step-by-step form that a computer can follow with high fidelity. If the variable has this range of values, proceed to step 3. Otherwise, go back to step 1. Perform a repetitive set of additions until the ideal condition is met, and then proceed to the last step. Computers are really excellent rules-based workers.
Computing power has increased exponentially over the last 50 years, largely as a consequence of Moore’s Law, the 1965 prediction by Intel co-founder Gordon Moore that the density of transistors on an integrated circuit would roughly double every two years. Moore’s Law has proven true, resulting in small, cheap, powerful computers being ubiquitous.
It is of little wonder then that the rules-based jobs that have traditionally been done through manual labor are now being done by machines whose actions are dictated by the work of programmers. Manufacturing assembly lines are now dominated by computer-driven robotic components. Common medical diagnoses can now be done from home with the help of several medical websites. Machines like the da Vinci Surgical System have already relegated surgeons to a position behind a computerized console; it doesn’t seem especially futuristic to imagine them as supervisors to a largely automated process in the days ahead. When using an airline, you can purchase tickets through a computer, check-in and receive a boarding pass through a computer, have your bags sorted and tracked through a computer. Planes flown by computers are a reality in military and industrial arenas, and the fact that passenger planes aren’t flown by computer is largely due to marketing and legal considerations, not technical ones. Computers can balance your books and do your taxes. Even some of the programming of computers themselves is becoming routine enough to be accomplished by computers without human intervention.
The inescapable fact is that work that can be broken into neat little units and assigned to interchangeable people is being taken over by computers. Organizing people into these kinds of designs is no longer a competitive advantage. The huge increase in computing power has commoditized basic work.
The other trend that has fundamentally changed the world is the vast increase in connectivity. In our article on envisioning, we detailed how exponential increases in connectivity has exploded the levels of choice and freedom. But what is in one sense liberating can also be baffling: while the range of choices and ability to choose has inflated, our ability to deal with the increase in choices has stubbornly remained at the level necessary for survival in hunter-gatherer societies. And certainly we might like to differentiate ourselves from our cavemen ancestors. But as they would be in this interconnected, fast paced world, much of the time our brains are confused by the number and complexity of available choices.
And confusion creates threat. Humanity was born in a world where a great many things wanted it dead. Unfamiliar environments were a danger, and too much information could cloud the quick decision-making necessary to save your skin. This is likely why each and every one of us, even today, is subject to the amygdala hijack. The prefrontal cortex—the most “human” aspect of our brains, the thing that takes care of slow, reasoned thinking and differentiated our ancestors from the “dumb” animals that wanted to eat them—is a liability in survival situations requiring fast reactions. So your brain shuts down the prefrontal cortex and hands over control to the amygdala, which, broadly speaking, has two modes: fight and flight.
It may seem strange to equate the modern workplace with prehistoric forests and plains, but this is essentially what your brain is doing. The modern office has existed for a geologic nanosecond, and the wiring of our brains hasn’t adapted to it. The strange environments, bosses who control our livelihoods, and the growing array of baffling choices mean we spend much of our time in a state of confusion and threat.
The threat response mediated through the amygdala hijack forces us to lean on our automatic habits instead of reasoned thinking. This was okay during the heyday of the OBP—work was mostly repetitive and rule-following, and the available choices were limited. Who cares if your mind is clear if all you have to do is follow a consistent, rules-based pattern and at most make decisions between simple choices? But as we have discussed, that work is disappearing. The work that will remain requires creativity, judgment, reasoning, and synthesis—functions that require full engagement of a brain that is not in a state of threat and confusion.
Companies that design work in the old way will be paying for brains, but getting habits. Companies who design to take full advantage of the brains of their people will have huge competitive advantage. This is what we mean by designing for people.
Design for People
To design for people, you have to create organizations that take into account what humans are like as a species, and what individuals are like in terms of their unique strengths, beliefs, and biases. This means a business leader has to:
- Create cultures and contexts that reduce confusion and threat, so that people are operating with higher level cognitive abilities and not regularly in fight or flight.
- Assign jobs based not on pre-defined interchangeable specifications, but based on the unique traits of people in the organization
- Recruit, pay, incentivize, train, and manage people to maximally leverage their strengths
We will cover all of the above things in future blog posts. And if you look back through previous articles in this series, the New Business Playbook (NBP) has been advocating a “Design for People” approach all along. You envisioned based on your purpose and talents. You strategized based on your strengths. Now, you have to organize people based on a fundamental understanding of what people are like. The better you design for people instead of merely structuring for business, the more you will adapt to the modern world, and the more competitive advantage you will unleash.