Draw me an organization
There are two approaches to understanding an organization. The first one is instrumental (what is the purpose of an organization), the second one is analytical (what constitutes an organization). Our POP model addresses both while combining them.
1// An organization is the connection between a purpose and people.
The purpose is comprised of a vision (the “why”), which leads to a mission (the “what”), which translates to a strategy (the “how”).
For instance, let’s look at Coinbase, the unicorn that pioneered cryptocurrencies, from whom we’ve shamelessly poached the triptych:
- Vision: “Digital currency will bring about more innovation, efficiency, and equality of opportunity in the world by creating an open financial system”.
- Mission: “to create an open financial system for the world”.
- Strategy: “1. Be the easiest place to buy and sell digital currency” and “2. Help the industry grow by building killer app prototypes”.
People refer to the stakeholders, and can involve varying categories that are more or less accounted for depending on the company: shareholders, employees, founders, clients, civil society, etc.
The connection works both ways, allowing the various categories of people to shape the purpose, and in turn, the purpose attracts and serves the various categories of people.
2// An organization serves as such a connection thanks to the interaction between (and not the sum of) 3 pillars:
- Culture: language, values, beliefs, mindset, behavioral norms, whether explicit or implicit, shared by the team.
- Routines: the processes (formal perspective) and habits (informal perspective) that regulate procedures, information transmission, decision-making, resource allocation, and coordination of the various stakeholders.
- Structures: the arrangement tasks and skills into roles, teams, divisions, etc., their scopes and articulation, particularly through hierarchical links. Both formal and informal.
Once again, let’s take an example, this time of a made-up a large company (any resemblance to actual organizations is purely coincidental):
- Explicit aspect: charter of values
- Implicit aspect: never contradict any superior above your immediate boss in a meeting
- In between: professional jargon (not considered as pejorative use, we all have our own jargons!)
- 1 set of tasks = 1 role = 1 person who remains for a long period
- Matrix linkages: for instance, the HR Director France is attached to the Global HR Director and the CEO France
- Information is communicated upwards seamlessly (reporting) and downwards imperfectly (information retention at middle management level)
- Decisions are generally made by one person (the higher-up), the most important ones are endorsed by a committee
- Work in the production chain is standardized
An organization uses assets (built for long-term use) and uses resources (for short-term consumption) to implement tasks that meet the purpose.
Why the POP model is useful
You might be surprised, or even, who knows, disappointed by the apparent simplicity of this model. Apart from the fact that the willingness to clarify and define terms is hardly the least of virtues affecting the jungle that is organizational literature, here are 5 good reasons to leverage the POP model:
It serves to narrate the history of companies
The emergence of the modern company, about 2 centuries ago, involved implementing this model on a large scale, in order to coordinate the various resources and talents to achieve a given goal. Before, coordination was done locally through the market, and the various categories of people were considered as a whole (traders were employees/shareholders for instance), the purpose was not well-developed – no epic vision like we encounter today when all you’re interested in is providing for your family.
The emergence of the modern company coincided with the invention of pyramidal structures, capable of operating on a large scale based on task segmentation.
It serves to describe the limitations of one’s organization – and to envision solutions
Among the breakdowns that can be envisioned, let’s cite reducing the stakeholders to the sole shareholders or reducing the purpose to mere strategy. If a company has been around for 1 or 2 centuries and the founders are long gone, meaning is obscured by the organization’s pure survival instinct.
And at the core of the 3 pillars previously described, it’s the contradictions between various elements of the organization that pose a problem. Much like the risk-taking and innovation rhetoric ramming into incentive schemes that state the exact opposite – carry on with the same and don’t make waves!
It provides an understanding of the new organizational models
The models that are the liberated company, squad, Teal organizations, DDO and consorts (don’t worry, we’ll present them in upcoming episodes) have a vastly different impact on the components of the POP model.
As such, the now (in)famous holacracy impacts routines and structures immensely, while a DDO (Deliberately Developmental Organization) focuses on culture and routines, and considers people and purpose as blended.
It allows us to discuss the public sector
Naturally, when conducting our research we were mainly concerned with companies, but the model can absolutely apply to public services – with a greater weight for citizens as the people, and a different purpose than the private sector.
It transcends scales
Our entire work focuses on organizations from a macro perspective, but the POP model is quite implementable in a fractal manner, at BU and team level. In this case, people andpurpose must also refer to the articulation of the level viewed through greater scales.
BONUS: It makes for a superb acronym
People, Organization, Purpose on the one hand, Assets, Resources and Tasks on the other, results in… POP ART! Cross our hearts, it wasn’t intentional, so why turn down such a great memory aid?
Conclusion: an organization is a system
Based on all of these components and the multiple, more or less felicitous modes in which they can be combined, an organization thus forms a system – a set of interdependent elements. Hence the difficulty of transforming an organization: changing just one element often implies taking the risk, at best, to not change anything through interaction with the other elements, and at worst, an adverse impact.
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