One of the keys to being an innovative organisation is culture.  The way that people within our organisation interact has a big influence on are ability to innovate.

I often hear from people that their organisation has a “risk-averse culture.” When I do, I remind them that we create culture – through our own interactions every day.  So if we want to change our culture, the first place to start is with what we do ourselves.

That is the theme that caught my attention this week.

Flat Organisations Innovate More

One of my posts at Harvard Business Review Blogs talks about how organisations with flat structures are more innovative.  That topic popped up a lot this week.

Clay Parker Jones reflects on Holacracy – one of the systems you can use to build flat structures. Clay’s firm UnderCurrent has been using holacracy for the past eight months.  He says that the approach is a bit formal and over-engineered (one of my concerns about Holacracy as a tool, too).  But he then points out that the approach makes UnderCurrent more democratic, through the use of tools like a structured decision-making process and defined task outputs.  The firm also re-organises monthly based on input from the whole team.

This increase in democracy is one of the things that improves innovation outcomes in flat organisations.  As people feel more involved with decision-making, they take more responsibility.  This helps put them in a position where they are more likely to try out new ideas themselves.

Harold Jarche then pointed out a great post by Lisa Thorrell – How Many Bossless Companies Exist Today?  Lisa finds 18 documented examples of firms that run on basically completely flat hierarchies.  The actual number that are around is probably higher, but these are ones that are well-documented, and demonstrably successful.  Check out her post for the whole list.

Here are her observations about this:

These are Not Just Small Companies

Of these, six were less than 100-person companies. Some 12 out of 18 companies were less than 1000-employee companies. One third of the companies had organizations over  1000 employees, with the largest being the Basque province’s Mondragno with 85,000 worker-members.

Not Just High Tech

While the majority (11/18) are in tech-related areas, over one-third were not, representing  industries as diverse as s automotive, aviation manufacturing, tomato processing to  a natural foods supermarket chain.

Not Just Young Startups

Some of these organizations have a long history. Mondragon has been around since 1956. France’s Favi is over 50 years old and has operated without a personnel department for over 30 years. GE Aviation’s self-managed teams began over 20 years ago.

When we talk about flat firms, the first response is “no, that’s impossible.”  Well, clearly, that’s not true.  The second response is “well, this only works in small, high-tech startups.”  Again, false.  Which means that we get into two more interesting questions: where does this approach work best? and how do make this approach more effective?

These are questions that a lot of smart people are starting to pay more attention to.  Aaron Dignan, also from UnderCurrent, outlines how they work with firms to help build these cultures and structures.  It’s a must-read article – and he uses this diagram to frame their approach:

Another person that’s thinking about this a lot is Dan Pontefract.  Dan got in touch with after I wrote that HBR post, and we had a chance to talk on Skype this week about his work, which was great fun.

Dan wrote Flat Army an excellent book on the same topic – how do we make flat organisations work better?  The page that I linked to has a description of what is in the book, links to sample chapters, and this diagram, which illustrates his approach:

CV Harquail is working on a book that talks about how generativity plays an important role in the digital economy.  She is not talking only about flat organisations, but her ideas certainly help to explain how these work.

She has written an outstanding series of posts outlining the ideas in her book.  The most recent, Generativity, in General looks at some of the benefits of the generative approach:

Because generativity is focused on growth, generativity tends to look towards the future. That future can be broadly defined; it can mean contributing to the next generation, the next step in the process, or the next business in the network. Yet even while generative behavior emphasizes creating opportunity for the future, it also creates something good right now. Whenever we act with generative concern, we ourselves feel energetic and alive. Generativity creates an active sense of expansiveness and hope, because it lets us experience ourselves as having a positive, enduring impact today and tomorrow.

The Tricky Side of Culture

We create culture through our own interactions.  This is good, because it means that we have some control over the culture in our organisations – at least in the parts that we interact with directly.  But this is bad if we don’t stop to think about the assumptions that underlie these interactions.

I’m currently reading Status Update, the new book by Alice Marwick.  It’s a though-provoking book, based on several years of ethnographic research in Silicon Valley.  Marwick does a great job of looking at some of the assumptions that lay beneath the culture of the region, and of many of the firms that originate there.

Here is part of what she has to say:

Yet the myth of equality persists, since the technology industry considers itself a meritocracy where the “good” ones — for example, talented engineers and programmers — will rise to the top regardless of nationality, background, race, or gender. When considering the dismal numbers of women (as well as African-American and Latino men) in tech, the meritocratic presumption is that these minorities aren’t good at or interested in technology; otherwise, there would be more of them.

If we admit there are structural barriers to entry, and a culture that actively discourages women and men of color from participating, then it logically follows that technology is not a meritocracy. And this threatens many dearly held beliefs of technology workers: It suggests those at the top aren’t there because they’re the best, but because of hard work and privilege. It suggests that the enormous wealth generated by tech startups and founders isn’t justified by their superior intelligence. It requires change from a culture in which male normativity is, well, the norm — to a more inclusive one where penis jokes and booth babes are no longer acceptable (and the mere suggestion to discard them isn’t met with a hailstorm of protest).

This theme was also picked up by Zeynep Tufekci, writing about the launch of Nate Silver’s new version of 538.  Tufecki uses Pierre Bourdieu and Dr Seuss (reall – go check out the post!) to illustrate some of the gender issues in technology today.  Her main point is that the people that are succeeding in technology often were misfits when they were younger, which makes it difficult for them to see the drawbacks in the current culture.

And Lauren Leader-Chivée shows that this isn’t just a tech issue either as she examines the response to Mary Barra’s response to the recall crisis at GM.

Probably my favourite post of the week was by Charlie Lloyd – he looked at another Silicon Valley phenomenon – the fascination with seasteading.  He looks at the assumptions not just of the Valley, but of everyone that lives in Western Culture – particularly those that romanticise “self-sufficient” lifestyles.

Many of you will probably disagree with the main points in all four of these posts. But I think that they are issues that we must consider.  If we want to build organisations that are more inclusive, more democratic, more rewarding to work in, and more fun, these are the type of assumptions that we need to identify and deal with.

That’s how we’ll build a more innovative culture.

One last note – yesterday I got to speak at TEDxUQ, which was both a great honour and great fun.  I’ll tell you more about it soon, and post a video of the talk as soon as it’s available.  Strangely, just before I gave the talk, some friends of mine at WPRB unearthed a picture of me from last century – so here’s me playing some punk rock a lifetime ago, and giving a talk yesterday: