Find a company which reflects Morning Star and St Luke’s image of a Complex Adaptive System (CAS) and reflect in your blog what the implications are for you and your present organization (or any organization you are familiar with). Identify what you believe are appropriate actions to move your organization forward.
Watch this Martin-Reeves Video and discuss the implications of strategy on your organization. Why strategy, why now, and how could this discussion positively impact your organization?
Business today is evolving. In fact, change seems to be essential to surviving today’s environment. Just like the dinosaurs who were unable to survive a change to their environment, companies that fail to adapt are sure to become extinct. The traditional hierarchical structure of functional departments is in the death throes. Many organizations today are structured as cross-functional matrices in which “there are usually two chains of command, one along functional lines and the other along project, product, or client lines” (Stuckenbruck, 1979). As organizations continue to evolve due to environmental demands the complex adaptive system begins to emerge.
Obolensky (2016) described organizations that function as complex adaptive systems. Complex adaptive systems have the following characteristics: “clear people processes and policies, sound and flexible information and communication technology systems, and transparent, inclusive and flexible strategy development processes” (Obolensky, 2016). In addition, complex adaptive systems have a very informal hierarchy, and “the formal hierarchy is rather flat” and “there is great emphasis on personal responsibility” (Obolensky, 2016). Two organizations that have found success as complex adaptive systems are the Morning Star Company, and St. Luke’s.
The Morning Star Company was founded as a tomato trucking company in 1970 by Chris Rufer. At the time the company consisted of a one truck owner operator that hauled tomatoes to area canneries for processing. The company has grown to include three tomato processing plants. “Today, Morning Star accounts for over 25% of the California processing tomato production, supplying 40% of the U.S. ingredient tomato paste and diced tomato markets, with industrial sales of approximately $350 million” (Morning Star Company, n.d.). What makes the Morning Star Company especially unique is the lack of traditional hierarchy; nobody has a boss!. Hamel (2011) suggested a few keys to the Morningstar Company’s success as a complex adaptive system; the company has made the mission the boss, let employees forge agreements, empowered everyone, not forced people into boxes, and encouraged competition for impact. The company’s vision is “For Morning Star colleagues to be self-managing professionals, initiating communications and the coordination of their activities with fellow colleagues, customers, suppliers and fellow industry participants, absent directives from others” (Morning Star Company, n.d.).
St. Luke’s broke away from the U.S. ad agency Chiat/Day in 1995. It quickly became one of the most talked about ad agencies in the United Kingdom. St. Luke’s has won numerous awards, including being named second in Campaign’s Best Places to Work 2018 (St. Luke’s, n.d.). The agency has the goal “to revolutionize the way business is done” (Coutu, 2000). This goal is pursued by carefully managing a paradox; “it pushes its people to take enormous risks, but has built a working environment that feels. . . safe to it employees” (Coutu, 2000). The organization has no traditional hierarchy, no bosses, and is owned by its employees (Coutu, 2000). Co-founder, Andy Law said “We’re fundamentally convinced that there is a connection between co-ownership, creativity, collaboration, and competitive advantage” (Coutu, 2000). The feeling of empowerment that St. Luke’s has developed in its employees by making them co-owners and collaborators has nudged the organization into the realm of complex adaptive systems.
Another company that has successfully functioned as a complex adaptive system is Reaktor. Reaktor was originally founded in Helsinki in 2000, and has expanded to five locations worldwide, including one in New York City. Reaktor offers consultancy and agency services and creates products and services which help clients “navigate the complex landscape of modern business” (Reaktor, n.d.). Kristiansson (n.d) explained that the company has no hierarchy, and that “Small and autonomous teams take on projects, work closely with clients, communicate, and make decisions on their own.” These autonomous teams provide an environment where individuals can grow, develop mutual respect, and distribute responsibility among team members (Kristiansson, n.d.). An additional benefit of small self-managing teams is the ability to make decisions quickly without approval of the organizational hierarchy. “A structure that enables quick decision-making is great for outstanding processes and results” (Kristiansson, n.d.) CEO of the New York office, Joonas Makkonen said “You can’t ask me to decide for you. You can talk to me and hopefully I can offer guidance, but in the end it’s you and your team calling the shots” (as cited in Kristiansson, n.d.). Obolensky (2016) indicated that “The term CAS [Complex Adaptive System] is meant to reflect a dynamic organisation where teams are formed, perform and then disappear as the need arises.”
In order for the company that I work for to move forward and progress toward becoming a complex adaptive system, the concept of functional silos and departments would need to be completely abandoned. Over the last few years there has been a change, and the different departments seem to be interacting better now than ever before. However, it feels like we are stuck in the early stages of the transition with traditional hierarchies over each department. Means need to be identified which would encourage the different departments to interact more to accomplish the common goal of providing safe and reliable helicopter transportation to offshore oil production facilities in the Gulf of Mexico. Employees need to be empowered to perform their job functions without so much oversight and direction. Actually making the transition and adopting a cross-functional matrix structure would continue the progression of the company toward becoming a complex adaptive system.
An additional path to becoming a complex adaptive system is by doing what Martin Reeves (2014) described when he indicated that all large organizations operate in numerous different contexts. This fact suggests that leaders need to understand that there is no one size fits all when it comes to strategy. Organizations need to adjust the strategy based on the demands of the current environment. “Strategy is more important than ever, but we need to adopt the right approach, in the right situation. We need to apply the whole pallet of human ingenuity to the science of winning” (Reeves, 2014). Organizational leaders need to understand that they cannot control or change the environment in which they operate, but they can change their strategy as the environment changes. The offshore helicopter industry is directly influenced by the price of oil; the higher the oil price, the more oil production, the greater the demand for helicopter transportation. Leaders at my organization would benefit from modifying the business strategy as the business environment changes. This is the path to prevent extinction.
References
Coutu, D. L. (2000). Creating the most frightening company on earth. Harvard Business Review, 78(5), 142-150.
Kristiansson, N. (n.d.). No hierarchy! An outsider’s view to one of the world’s coolest companies. Retrieved from https://www.reaktor.com/blog/no-hierarchy-outsiders-view-one-worlds-coolest-companies/
Morning Star Company (n.d.). Company history. Retrieved from http://morningstarco.com/index.cgi?Page=About Us
Obolensky, N. (2016). Complex adaptive leadership: Embracing paradox and uncertainty (2nd ed.) New York, NY: Taylor & Francis
Reaktor (n.d.). About. Retrieved from https://www.reaktor.com/about/
Reeves, M. (2014, December 22). Martin Reeves: Your strategy needs a strategy [video file]. Retrieved from https://youtu.be/YE_ETgaFVo8
St. Luke’s (n.d). St. Luke’s. Retrieved from http://stlukes.co.uk/
Stuckenbruck, L. C. (1979). The matrix organization. Project Management Quarterly, 10(3), 21–33.
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