Platt Perspective on Business and Technology

Innovation, disruptive innovation and market volatility 26: innovative development at the business-to-marketplace collaboration level 4

Posted in macroeconomics by Timothy Platt on July 28, 2016

This is my 26th posting to a series on the economics of innovation, and on how change and innovation can be defined and analyzed in economic and related risk management terms (see Macroeconomics and Business, posting 173 and loosely following for Parts 1-5 and Macroeconomics and Business 2, posting 203 and loosely following for Parts 6-25.)

I began in Part 25, to offer an alternative to the perhaps visually appealing but functionally less useful traditional approach to modeling a business for its overall organizational structure: the standard table of organization tree model. And in the course of that, I at least briefly touched upon a set of increasingly common and important supervision and management contexts in which a simple tree model: any simple table of organization that takes on a tree model form breaks down for capturing the actual day-to-day business in place and how it is operationally and strategically structured.

• When businesses are simple and linear in structure, with single A to B to C linear chains of top-down oversight and management, and simple single flow-pattern branching that exhibit similar manager to direct-report subordinate relationships, a simple tree model can and does work – and is preferable for its overall simplicity and clarity and for its capacity to graphically depict the overall organization in a single outline-level image.
• But when that simplicity breaks down with for example, the crossing lines of management and supervisory responsibility and oversight that arise in matrix management systems, any attempt at tree model representation becomes bewilderingly complex – and certainly if significant dual management and supervisory relationships of this type are routinely supported and followed throughout large functional portions of a business.
• This simple business model, I add, also breaks down when businesses support and even actively encourage multi-functional teams to in effect self-assemble in order to tackle employee imagined, but business supported special projects, as for example is done at Google; there are in fact a lot of situations and contexts where a simple tree representation would mislead more than clarify in understanding the business it seeks to represent, and their range and their level of acceptance and use are only growing.
• And looking past the individual business per se, if the interconnections that arise between collaborating businesses have to be mapped out, as for example in modeling supply chain systems and their impact on participating member enterprises, simple tree model representations essentially automatically break down. That higher organizational level type of business modeling would of necessity have to include several or even many distinct “trees” (several or even many individual collaborating business), and certainly all of the functionally significant lines of connection between them through which all business-to-business collaboration processes per se, take place – all of the between-business processes that collectively operationally define these supply chain systems as functioning, value creating systems.

My primary goal for this posting is to at least begin to flesh out in basic outline, an alternative modeling approach to the traditional tree model table of organization as grounded in individual businesses, that would address more complex supervisory and management arrangements and that could be scaled up to effectively represent business-to-business collaborations and their emergent properties too. And to be clear here as to why I am including this line of discussion in this series – if you want to innovatively advance and develop your business and its processes and systems, you need to as effectively as possible, be able to map out and understand where your business actually is now and how it is actually day-to-day run and operated. And you need to be able to address its supply chain and related activity too and in similar depth and detail, and certainly where that higher level of overall organization and its activity defines any significant portion of the overall competitive success of its member businesses.

But before delving into how innovation and change fits into this, it is important to at least consider the Why of the type of business modeling reframing and reformulation, that I am proposing here. What specifically would, or at least should this effort at re-envisioning yield as a return on investment for even attempting it? And I begin addressing that question by offering a threshold of need criterion that would have to be reached at minimum for any such new alternative to make sense and for it to offer sufficient value as to make it worthwhile as an exercise and as an analytical tool.

• Any new alternative to the basic, traditional tree model representation would have to offer levels of actionable insight – value creating insight that outweigh the learning curve and other costs that would be incurred from implementing and maintaining such a resource.
• And ultimately, this means both more readily and clearly mapping out new types of organizational relationships that would be lost for their complexity when depicted in the old modeling format, while continuing to effectively model and represent relationships and systems that the older approach could address.
• And it would also mean the new business modeling approach offering insight into where possible gaps are and for both communications flow and supervisory or oversight authority, and for helping to identify possible single points of failure too and where they might arise.
• And as just indicated above, this new approach would have to be scalable: useful in modeling and analyzing an individual business and its functional subsystems, and how that organization as a whole fits into larger value creating systems too.

So my goal here is to at least begin to map out a new organizational modeling process, with these threshold needs requirements in mind. And I offer this line of discussion with those and I add related return on investment considerations firmly in mind – and with a recommendation that others apply these and similar considerations too when reading and thinking about this too. And with that in place, I begin to develop this new organizational modeling approach.

The basic approach that I would offer here, is based upon a closely related modeling approach that I have been developing in recent installments to a concurrently running series: causal linkage maps ( see: Intentional Management, as can be found at Business Strategy and Operations – 3 and its Page 4 continuation page, as Postings 472 and loosely following.) And see in particular, its Part 30 and following.

• I have been writing there of causal linkage maps, and how operational processes and practices are carried out in an organization,
• And at both specific nodes in the organization: in the hands of specific employees and teams of them,
• And in functionally connected areas of the overall table of organization – that might or might not mean following a standard table of organization tree model in place. (Consider, as a non-tree-ready example, a business that deploys in-house consultants who work for in-house clients who hold positions in areas of the organization scattered throughout its overall structure. And they work on a task-by-task basis under what amounts to a more matrix management system, reporting as situationally required both to their own formally specified “home office” supervisor, and to the managers of the various teams who they work with as their in-house clients – and who as just stated might fit in the standard table of organization business model, essentially anywhere in the overall organization.)

The moment that I began posting about causal maps in this blog, I began raising need for this type of organizational mapping reconsideration – and in fact the first time that I wrote here about matrix management and related organizational alternatives, and about supply chain and related systems, I did too. Yes, I have also posted about more traditional tables of organization too, and about developing better organizational models that might fit that basic pattern in this blog. See, for example, my early series: Best Practices for Building a Better Table of Organization (as can be found at HR and Personnel, postings 65 and loosely following for its Parts 1-5.) Here and at this point in my writing, I overtly note a need to move past that single approach to at least consider more functionally flexible alternatives – so the table of organization per se, in whatever form it is presented in, does not just end up a dusty wall decoration that no one ever really looks at.

I am going to continue this line of discussion in a next series installment where I will delve more fully into causal linkage mapping and its application to this context. And my goal there is to offer an approach that would flexibly address the scalability and the business model complexity issues that I raise here as being overly challenging, to a more traditional tree model business representation. Meanwhile, you can find this and related postings at Macroeconomics and Business and its Page 2 continuation.

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