xxi century organization

Wojtek Luciejewski

Warszawa, Osnabrück, Poznań, Ostercappeln (2001 – 2010)

According to „What is wrong with our concept of organization? Shifting our organizational

metaphor from Machine to Nature” by Rob Paterson

1850 1900 1950 2000

Eli

Wh

itn

ey –

inte

rch

an

ge

abili

ty o

f p

art

s

Sta

nd

ard

s o

f te

ch

nic

al

dra

win

gs, to

lera

nce

s, d

eve

lop

ment o

f

mo

de

rn m

achin

es

Fre

deri

ck

Ta

ylo

r –

sta

nd

ard

iza

tio

n o

f

wo

rk, th

e c

on

flic

t b

etw

ee

n e

mp

loye

es c

on

tra

ma

na

gem

ent,

stu

die

s o

f tim

e n

orm

s

Fra

mk

Gil

bre

th–

the

fo

llow

er

of

taylo

rism

,

stu

die

s o

f m

otio

ns, th

e b

egin

nin

g o

f

erg

on

om

ics

Lil

ian

Gil

bre

th–

the

use

of film

into

stu

die

s

of w

ork

, th

e h

um

an

itaria

nis

m

Hen

ry F

ord

–a

sse

mb

ly

line

s, flow

of

pro

du

ction

, str

ate

gy

Ed

wa

rds

Dem

ing

, J

ose

ph

Ju

ran

–S

tatistica

l P

roce

ss

Con

trol, T

QM

Ta

ich

iO

hn

o,

Sh

ige

o S

hin

go

–

Ju

st In

Tim

e, To

yo

ta P

rod

uctio

n

Syste

m, W

orld C

lass

Ma

nu

factu

ring

Ja

me

s W

om

ac

k –

Le

an

Ma

nu

factu

ring, L

ea

n E

nte

rprise

Eli

ah

uG

old

ratt

–T

he

ory

of C

on

str

ain

ts

Excerpts from “The Chaordic Organization: Out of Control and Into Order” by Dee Hock, Founder and CEO Emeritus of VISA International

• Open

• Multi-centric and

self-organizing

• Constitutional

• Decentralized

• Fractal

• Enabling

• Closed

• Top-down and

centrally oriented

• Corporate

• Centralized

• Departmentalized

• Controlling

Conventional Systems Emerging Systems

Excerpts from “The Chaordic Organization: Out of Control and Into Order”

by Dee Hock, Founder and CEO Emeritus of VISA International

Sierpinski Triangle

32

33

34

This fractal was created

through the use of one only

mathematical formula

Formula: z(n+1) = [z(n)]2 + c

Subsequent approximations uncover different, but still similar features

36

Fractal geometry permits us to understand, how nature creates all its forms,

which we can observe. The mountain formations, rivers, shores, the mammal's

lung, vegetation and the blood circulation system, but and the surfaces of

breakthroughs of metals as well as the growths and the falls of stock are

fractals copying on many smaller levels of scale the main pattern.

Fractals in effect behave like genetic algorithms permitting different species to

reconstruct effectively essential functions.

Let's take the example of a cloud - it constitute doubtless one the whole, but it is

"full of holes" like a sponge, because it consists of countless quantity of

microscopic drops of water and steam. It is separate the whole, but folded with

many smaller the wholes, also separate. If "we will cut out" small piece of cloud,

then we will receive something very similar to it.

Development and the strength of computers permits us at present to see and

better understand the law of evolution and what follows it laws of nature.

Logical-rational approach (determinism).

Philosophers:

• Platon (427-347 B.C.)

• Aristotle (384-322 B.C.)

• Rene Descartes (1596-1650)

• Pierre Laplace (1749-1827)

Mathematics and physics till the 19th century

Frederic Winslow Taylor – theory of industrialefficiency

New Approach – Sustained Disequilibrium

Giving up the thinking in ways of the linear extrapolation type or cause-and-effect chains

• Jules Henri Poincaré (1854-1912)

• Theory of Relativity

• Quantum Mechanics

• Theory on Infinite Sets – Georg Cantor

• Fractal geometry – Benoit Mandelbrot

• Complex Adaptive Systems

1850 1900 1950 2000

Ralp

h W

ald

o E

mers

on

-philo

sopher,

leader

of

the

Tra

nscendenta

listm

ovem

ent

Ju

les H

en

ri P

oin

caré

–th

e p

recurs

or

of th

eory

of

rela

tivity

and the c

haos, cre

ato

r of philo

sophic

al

direction o

f conventionalis

m

Geo

rg C

an

tor

-–

the c

reato

r of set th

eory

; he u

nre

ele

d

conception o

f A

bsolu

te Infinity,

whic

h h

e identified w

ith t

he

God

Ste

ph

en

William

Haw

kin

g -

British

astr

ophys

ics, cosm

olo

gis

t, the

theore

ticia

n o

f physic

s

Wacła

w S

ierp

iński

–docto

r of philo

sophy,

one o

f cre

ato

rs o

f P

olis

h

math

em

atical s

chool, the c

onstr

ucto

r of th

e first fr

acta

l

Alb

ert

Ein

ste

in -

one o

f th

e b

est th

eore

tical

physic

ists

, cre

ato

r of specia

l and g

enera

l th

eory

of re

lativity

Ben

oît

B.

Man

delb

rot

-re

cogniz

ed a

s

the c

reato

r of fr

acta

ls a

nd fra

cta

l

geom

etr

y

Han

s-J

ürg

en

Warn

ecke –

the G

erm

an s

chola

r, p

resid

ent

of th

e F

raunhofe

r In

stitu

te,

ori

gin

ato

r of

fracta

l ente

rpri

se

Wło

dzim

ierz

Sed

lak –

the P

olis

h p

riest, c

reato

r of P

olis

h

school o

f bio

ele

ctr

onic

s a

nd the e

lectr

om

agnetic theory

of

life

Ed

uard

No

rto

n L

ore

nz –

math

em

aticia

n a

nd

mete

oro

logis

t, c

reato

r of th

eory

of chaos

Dee W

ard

Ho

ck –

the c

reato

r th

e V

ISA

Inte

rnational, first C

haord

ic o

rganiz

ation

Jo

hn

Bo

yd

-th

e c

olo

nel of th

e a

ir f

orc

es, cre

ato

r of lo

op

the O

OD

A a

nd the theory

of energ

y o

f shunte

rabili

ty (

the E

nerg

y th

e M

aneuvera

bili

ty)

Pete

r F

. D

ru

cker -

managem

ent

expert

, he w

as c

alled t

he f

ath

er

of th

e f

ounder

of

managem

ent

or

the p

ope o

f m

anagem

ent

Ch

arl

es D

arw

in –

one o

f th

e m

ost

import

ant bio

logis

ts o

f X

IX a

ge, auth

or

of th

eory

evolu

tion

Ch

arl

es F

. H

aan

el–

the f

ath

er

of

pers

onal develo

pm

ent,

auth

or

of

The M

aste

r K

ey S

yste

m

Steady State

First Bifurcation

Chaos

Opportunistic Regime

“Edge of Chaos”

Conducive to Self Organizing Systems

Conducive to Complex Adaptive Systems

Second Bifurcation

Could apply to either a

functional or programmatic

designOrganizations

capable of

evolving and

adapting

Mono-stability:

evolution impossible

Diagram courtesy of Dr. Linda Beckerman, Director of Systems

Engineering, the ASSET Group, SAIC

Agricultural

revolution

Industrial

revolution

Information/ knowledge

revolution

This landscape is changing itself with the function of time –

the peaks get lower, disappear and new ones emerge. The

practice shows that to be able to climb onto another peak it is

necessary first to get down into the valley.

Tim Mannon, the President of the Hewlett Packard Printer Department, once said: „The biggest single danger to our business is remaining for one year too long in the previous business which brought us success.”

A second look will remind us that variety and

irregularity allow the resilience and creativity which

are a necessity for learning, which is a condition to

be able to survive.

"This so as would be in the movie of slow-motion " - Boyd describing working inside loop OODA of the

enemy.

When you design, planning new strategy then keep the minimum speed of OODA loop, when you fight (with

competition) provide for maximum speed.

Action

(Test)

Action

Notice how the orientation shapes the observation, shapes the decision, shapes the action and in the

response is shaped by the reaction and different phenomena coming to our view-finder of feeling or

observation. Notice also, that the whole loop ( not only orientation) is the continuous, many-sided, implicit

process of expectation, understanding, correlation and rejection.

Observations

Information

from outside

Changing

circumstances

Observation

Decision

(Hypothesis)

Decision

Developing

interaction with

environment

Implicit

leadership and

control

Feedback

Implicit

leadership and

control

Developing

interaction

with

environment

Cultural

tradisions

Genetic

heritage

New

informationPast

experiences

Analysis

And

synthesis

Orientation

According to John Boyd, implicit (leaning on genetic

heritage, cultural traditions and past experiences)

communication accelerates undertaking decision and

beginning of action.

Feedback

Primates

Chaordic (Fractal)

Enterprise

•Highly organized (fractal)

•High flexibility

•Optimal use of resources

•Influence on ecology

•Organic harmony of respective

functions

Vertebrate

Demand Flow

Organization

•Good structures and processes

•Flexibility and moderate adaptability

•Centralized flow of material and

information

The best way to predict the future is to create it - Peter F. Drucker

Multicellular organism

Functional

Organization

•High efficiency

•Sluggish

•Adjustment problems

•Success only in small niche

Workshop

Unicellular organism

•Low efficiency

•Undemanding

•Narrow range

Handicraft

PhilosophyPhilosophy of efficient operation of organization: Offering to the Customers the optimal value of products and services (Best Quality, Lowest Cost, Shortest Delivery Time), acquired as a result of avoidance and constant liquidation of waste and simultaneously maintaining the unabridged adaptive ability to the changes within the environment and the market.

System

Management and information system based on: the Mechanism of Continuous Improvement of Organization (Enterprise Kaizen), Employees Empowerment (employee as a citizen), Standardized Work, Just-In-Time/Pull, Quality at the Source, Multi-Position Handling, Fractal Teams (businesses in business), Time Based Competition, Demand-balanced Manufacturing, Visual Management, Leadership instead of Command and Control, Appropriate Accounting.

Tools

Tools and means, concepts and devices: 12 Questions Survey, Myers-Briggs Indicator, Open Space Technology, Matrix of Skills, Deep Ecology, Catchball, Muda, Mura, Muri, Lean Promotion Office, Hoshin Kanri, „U” Cells, Jidoka, Heijunka Box, PDCA, One Piece Flow, 5 Why’s, Value Stream Mapping, Computerized Management Systems, Kanban, Kaikaku, SMED, 5S, 4M, 3P, Andon, TPM, A-3 Report, Automatic Line Stop, Poka-Yoke, Takt Time, Milk Run, Cross Dock, Jishuken, EPEI, FIFO, Mistake-Proofing, Final Cost, Yamazumi Board, 20 Keys, A – B Control, Chaku-Chaku, Capital Linearity, Labor Linearity, Change Agent, Sensei, OEE, PFEP, Progress Control Board, 7 Wastes, Waterspider; elements of TQM, Six Sigma, Theory of Constraints, DFT, BPR; Boyd’s loops, 3C, OST, RTSC, etc.

• The development of technology permits automation of production processes and the widespread use of robots .

• The world trend is shifting the weight of management from area of production to preparation of this production.

• The preparation of production has in modern enterprise the key meaning.

All actions in the Value Stream( the successive mapping, present states and the planning of the target states) should therefore focus mostly on this area.

ValueValue

Stream

FlowJust-in-Time

Pull

BoardFinances

Marketing

Administration

CLASSICAL

ARAB

VATICAN LATINAMERICAN

RUSSIAN

FEMINISTMOVEMENT

POLISH

COLONIALAFRICAN

AMERICAN

CHINESE

ITALIAN SAP AG

Service

Production

Production

Production

ProductionProduction

Production

Production

Production

Production

Engineering

Supply

Quality

Control

Legal

Services

Operational

(Combat) Fractal

Supportive Fractal

Specialist Fractal

Reconnaissance

Fractal

Superior Fractal

Sales

MaintenanceInvestment

Board of

Directors

Administration HR

Customer Marketing

Value Stream M

Fractal M1(Machining)

Fractal M2(Preassembly)

Fractal M3(Final Assembly)

Value Stream S

Fractal S1(Machining)

Fractal S2(Preassembly)

Fractal S3(Final Assembly)

Cooperation within Value Stream on the principle - „Customer – Supplier”.

Cooperation between similar Fractals in cases of the demand fluctuation.

Cooperation between Fractals within a scope of available resources

(machines, workers, applied technology etc.).

Value Stream A

Fractal A(Fractal is able to select members and resources according to its

needs including industrial engineers, supply employees etc.)

Value Stream B

Fractal B(Fractal is able to select members and resources according to its

needs including industrial engineers, supply employees etc.)

Fractal CSkills from 16 to 28

Fractal ASkills from 1 to 12

Supportive process- Material

Supportive process- Information

Supportive process- Tools

Fractal BSkills from 8 to 20

Accounts

Receivable

Company

Accounting

Purchase,

Sales and General

Ledgers

Controlling

Cost

Accounting

Accounts Payable

Rough Capacity

Planning

Production

Work Orders

Material SupplyWork Orders Control

Roll-on Production Plan

Effectiveness Measurement

Detailed Capacity

Planning.

Master Planning

Schedule

Material and Sub-

assemblies

Requirements

Planning

Roll-on Sales Plan

(Orders on hand, Forecast)

Business PlanFinancial

Management Database Database

Strategic

Management

Operational

Management

Shop Floor and

Purchase

Management

Production

Planning

Manufacturing

resources

Bills of

Material

Departments

Work

Centers

Routings

Costing Elements

Index of:

Material,

Subassemblies,

Products.

Planning data:

lead times,

Batch Sizes

etc.

Stock Records

Accounts

Receivable

Company

Accounting

Purchase,

Sales and General

Ledgers

Controlling

Cost

Accounting

Accounts Payable

Rolling Sales Plan

Strategic Business

Plan

Finance

ManagementDatabase The Board

Strategic

Management

Dispatch/

Customers

Feedback

Operational

Management

Index of:

Material, Subassemblies,

Products, Lead

times, Batch Sizes, etc.

Stock Records

Production Planning:

Manufacturing

resources, Bills of

Material, Departments, W

ork

Centers, Routings, Costin

g Elements

Final Quality Control

Effectiveness MeasurementV

alu

e S

trea

m

Customer

Rolling Production

Plan

Sa

les

Pro

du

ctio

n P

lan

nin

g

Pu

rcha

se

Qu

alit

y A

ssu

ran

ce

Service

Pro

du

ctio

n

Visual

Management

Work Orders

Work Orders Control

Desig

n

Va

lue

Stre

am

The appraisal of the needed skills

of team ( the scale from 0 to 5)

Members of the teamSkills to achieving

The difficulty of definite skill

( the scale from 1 to 5)

The possessed skills – green color