John Chambers’ recognition that Cisco “was designed for the industrial age of the past century when capital was the scarce resource, interaction costs were high and hierarchal authority and vertically integrated structures were the keys to efficient operations” (Bryan et. al. 12) probably lead to his desire to transform the company into its current “councils” and “boards” format which replicates the advantages of a matrix organization without its limitations (e.g. the diverse priorities associated with dotted and multiple reporting lines, figuring out the “unwritten” rules of the organization etc).
One major learning objective I took away Jim Fisher’s course in Organizational Design at the Rotman School of Management was that complexity exponentially increases with the number of employees assigned to different functions. This complexity lessens the “perfect” design of the organization largely because the communication between the different functions (e.g. design, procurement etc), and therefore the optimal decision-making ability in the actions associated with each function (e.g. whether to procure available materials instead of required materials would be based on design, quality control, sales etc). In a nutshell: optimal communication between different functions, and optimal decision-making at the relevant point (decision rights). This is precisely what Chambers is attempting to do through his culture of collaboration, replicable processes, and eating of one’s own dogfood.
While I applaud Chambers’ intentions, I have some concern about his implementation methodologies (30% of managers’ bonuses depend on their team interactions, their 5-year strategy, their 2-year vision and their 10-point execution plan) largely because they utilize external motivators, encourage homogeneity in communications processes, and may inadvertently encourage managers to develop expertise in their 5-year strategy, 2-year vision and 10-point execution plans over actually perfecting the art of decision making. Furthermore, despite the optimism of Bryan et. al. that digital technology will “promote efficient, effective and large-scale collaboration” as well as being able to “measure each person’s ‘assists,’” I do not believe (as they conclude) that such measures will “motivate employees to collaborate in ways that were not possible in the past” (16) to the expected or desired extent.
Abraham Maslov’s famous “Hierarchy of Needs” posits self actualization at the top of the human pyramid of needs, and I believe that as long as there are people working in these organizations, organizational design will have to consider these human factors affecting motivation. While Chambers’ revised matrix organization improves the process (as does Bryan’s digital technology), one needs to consider that the people’s strongest motivations are often internal rather than external: witness the advent of open sourcing and wikis as a 21st century example of people collaborating because of individual self-actualization. Thus I would see Drucker’s aspiration of “liberation and mobilization of human energies” as a timely reminder to Chambers’ objectives, with a strong emphasis on the human. This is not to imply that we somehow relativize all processes under the umbrella of recognizing the “human” component, but instead that we rigorously study how human behavior impacts their ability and motivation to engage in profitable activity. The weakest assumption of the industrial age was in assuming that humans were homogenous, programmable robots, well exemplified in the metaphoric connotations of the expression “command and control.” As we know from personal experience (e.g. managing families, friendships, politics etc) humans are infinitely more complex than that. In organizational design, we need to consider if we are going to unleash that fecund potential or tame it to a less complex, more-mechanized output.