In their recent book “Victory through Organization, Why the War for Talent is Failing your Company and What You Can Do About It”, Dave Ulrich and colleagues have argued forcefully that management has been too obsessed with the hunt for talent. They propose instead to focus more on organization. They develop their argument from and for an HR perspective, on the basis of empirical data from their last research on over 1,200 organizations. These data show that when compared to individual HR professionals, HR departments as a whole have three to four times the impact on business results: in other words, argue Ulrich and colleagues, departments matter more than people in predicting business and stakeholder results: hence the title of the book, and hence their argument that while securing the right talents is important, what matters more if not most is the creation and maintenance of organizational capabilities and culture.
One can only welcome this new convergence of distinguished HR professionals emphasizing the importance of organization as opposed to the individual in bringing about business and stakeholder results. Having established this finding, the authors use the remainder of the book to spell out in more detail all its implications for the needed competencies of HR professionals and departments, as well as on the manner they go about their jobs.
So it is no surprise when at the end of their book, Ulrich and colleagues extrapolate from the HR domain to organizations in general, and on this ground argue for an increased emphasis on studies of organization capabilities and an increased managerial attention to culture. The whole question is: what are organization capabilities and what culture are we talking about?
Any organization can be analyzed on three levels. Level 1 is rooted in managerial discourse (such as corporate strategy, corporate culture, corporate communication, etc.). Level 2 is represented by all the dimensions of the formal organization (organization chart, formal rules and procedures, management tools and the like). Level 3 corresponds to what is generally known as the informal structure of an organization (informal and nevertheless taken for granted patterns of behavior, informal arrangements among participants in the organization, informal coalitions and/or zones of conflict, in short the “rules of the game” that unofficially structure the transactions among members of the organization, etc.). Level three represents what has been variously described as the “clandestine management” and the “operative system” of an organization.
These three levels are of course related to, and articulated with, one another, but there is no automatic or mechanistic passage from one to the other. Each level has a life of its own and cannot be subsumed one under the other. They are also very different in nature. Level 1 and 2 result from rational analytics and voluntary design and express managerial intent. Level 3 on the other hand is largely informal, being the emergent result of the interaction of the behavior of all the participants acting autonomously within the constraints of their organizational interdependence. Level 3 is distributed by nature, meaning that it is not produced by anyone in particular, nor subject to anyone’s complete control. As it originates in, and is inseparable from, the encounter and meshing of the prescriptions of levels 1 and 2, with the contingencies underlying the patterns of the ongoing exchange and power relations through which all members of an organization accomplish their tasks, it is resilient to voluntary definition and change, and, as the saying often attributed to Peter Drucker so vividly states, capable of eating strategy for breakfast. It expresses and represents the “deep” culture of an organization as opposed to (as different from) its corporate culture.
Obviously, targeting organization capabilities and culture is targeting level 3 phenomena, i.e. a reality that cannot be directly created, but whose emergence and structuring takes time and cannot be decided, but only monitored indirectly. And Ulrich and colleagues are right in pointing out that the recruitment of talent is not the solution, even if individual competencies of organization members remain of course important. And one should add that it would be time to recognize the glorious uncertainty of any recruitment: even the most careful screening ahead of recruitment cannot guarantee that the encounter of the new talent with the preexisting networks of work relations and their underlying power-equilibria will produce the expected result. Too many examples have shown the contrary.
Management in this perspective becomes much less scientific or analytics based. It has to accept its political nature in so far as its task is to construct a constitutional order, or a mode of governance. Its role is to initiate, and then to monitor the organizational process, collective in nature, out of which the mode of governance of the organization will in the end emerge and be structured. In order to do so, it will need to be based on the understanding (decoding) of the emerging dynamics of the “operative system”, it will need the capacity to diagnose whenever necessary the emerging dynamics of the implementation processes without which level 1 and 2 plans could not be substantiated in concrete behavior at level 3. Design will be much less important than the capacity to steer the implementation of whatever new plans and organizational designs have been decided. And it is only fitting to evoke here another very challenging finding of Ulrich and colleagues. They show that Navigating Paradox is the HR competency that most impacts business performance. There is good reason to believe them: steering the implementation of organizational design is an activity which requires and presupposes the capacity to navigate paradox, in other words to act politically, meaning to manage pragmatically the many vagaries of a process which is open ended and never fully predictable by nature.
The deeper significance of bringing back the human dimension into management lies in the recognition that organization and individual cannot be separated: organization and its way of functioning (its deep culture) is the emergent result of the encounter between organizational design expressing managerial intent and all the strategic interactions taking place within an organization and between this organization and its wider context. Organization is the (contingent and therefore never fully determined) product of the motivated (collective) action of the people in it and around it.
About the Author:
Erhard Friedberg is Professor emeritus of Sociology at Sciences Po Paris. He is, with Michel Crozier, the founder of the “French School of the Sociology of Organizations”, providing a conceptual and methodological framework for the analysis of organized action and organizational transformation. Prof. Friedberg pursues his teaching and consulting activities at the Next MBA of Mazars and with the World Bank. He can be reached at e.regenhart@gmail.com.
This article is one in a series related to the 10th Global Peter Drucker Forum, with the theme management. the human dimension, taking place on November 29 & 30, 2018 in Vienna, Austria #GPDF18
This article was first published on Linkedin.