It lies within

A little six year old girl was in a drawing lesson. The teacher said this little girl hardly ever paid any attention — but in this drawing lesson, she was sitting at the back, drawing. The teacher was fascinated and went over to her and said, ‘what are you drawing?’ And the little girl responded, ‘I’m drawing a picture of God’. The teacher took a step back and said, ‘but nobody knows what God looks like.’ And the little girl said, ‘they will in a minute’.
- Ken Robinson

There's (almost) nothing special abour our times

“The only thing we know about the future is that it will be different”

- Peter Drucker

Revolutionary change, or speed of evolution?

It’s been a while now, since we’ve been talking about this digital revolution. About 10-15 years ago, when technology became so ubiquitous, we started to discover new civilizational problems and find new solutions for those problems, that were unimaginable for our parents.With those problems and actions came new threats. More and more often we feel like in a S-F movie, surrounded by unbelievable machines cracking inside out fragile living. Now, in 2015, we’re actually accustomed to the feeling, that there’s simply no such thing as “impossible” for new inventions. We blame “these times” for being so special (most of the times in a negative way), that you barely catch up after the great technological revolution. When we watch it from a single point in time, we see, that  the world we live in today has nothing to do with how it was yesterday. Eventually, this whole madness comes to a single, yet tough task - keep up with the world. Learn faster, think faster, adapt faster. Or drag behind, and become excluded.

Watching how the world is from the present-day standpoint is one way to do it. Then we’re probably  in the middle of the biggest revolution the world has ever seen. But on the contrary, we can put our times in a context, in which they’re not so extraordinary at all. First of all, let’s assume we’ll measure revolution and distinct it from changes by a degree in which it influenced people’s lives. Shortly said, if it radically changes the way people live, it’s a revolution. Keeping that in mind,  let’s compare our digital revolution’s impact to some other known revolutions in history.

The ancient Greeks, especially during the Classic period, laid a cornerstone of the societies and high living we know today. Although this revolution wasn’t entirely about technology, it seems they enabled it to reign for centuries. Pythagoras, Archimedes, Hippocrates or Euclid have invented some mathematical, philosophical and scientific tools crucial for our development. Greeks invented the first alphabet available for ordinary mortals. They introduced sport and culture in a form of entertainment, something we couldn’t imagine living without today. Greeks revolutionized societies - by inventing democracy, and science - by using rules of mathematical proof for the first time. They also linked beauty and architecture, constructing buildings in respect of the golden ratio.

The Romans, on the other hand, somehow invented the cities we know today. They let the civilization emerge by creating roads (the whole modern industry is shaped by a roman roads width, which in turn was a derivate of two-horse carriage width), inventing aqueducts, sewers, or hiring first policemen and firemen. Those were the real game-changers for Roman people, not only a base for modern cities. Maybe the most influential movement in history of our culture, Christianity, also appeared in Rome and was spread by Roman Emperor Constantine the Great. Among many other inventions, Romans started to craft glass windows, use concrete, and invented glass blowing. We can imagine how those changed everyday life.

One of the greatest revolutions, often overlooked in this discussion, was age of exploration. It was relatively short, although it radically changed the world , just as seemingly exceptional digital age. We can imagine those times as an older brother of the internet revolution. The discovery of new continents opened absolutely new perspectives for international trade. In fact, almost all food we eat today comes from triangular trade (Africa, America, Europe) - potatoes, rice, peanuts, maize, etc. International trade spread goods like sugar, cotton or tobacco  all over the world. With them, it also brought diseases and slavery to America, alcohol overdose and guns to Africa, and ubiquitous genocide. However, people connected with each other for the first time, with all the pros and cons. Europeans redefined their beliefs and habits, as they could start a new life in the New World, liberated from church domination and biblical dogma, now somehow compromised by world’s diversity. Definitely, the world became a dramatically different place to live after those years of exploration.

And at last, the obvious example - the industrial revolution. In a short period of time world has made a 180 degree turn.  Steam engine, Diesel engine, airplane, telephone, telegraph, Ford’s mass car production, and many, many more. Even if you take modern criteria of revolution, and narrow the comparison to technology, world changed more in 19st century than today. Of course, that’s not all: anesthesia, food canning, air conditioning - all of those popped out during circa 100 years. Just to mention - industrial revolution was also the time when capitalism established its dominant role in the world.

All of those irremediably changed the world and the way people lived. In each case, if we compare the moment before the revolution, and a single point in time after it took place, those were completely different realities. What’s worth pointing out, time interval between each following pair of  those equally significant revolutions is shorter than former. It’s quite obvious for us when we look at history, that long time ago time tend to past slowly. In middle ages, for example wars lasted over hundred years (XIV - XV centuries), and were full of military conflicts. Biggest war of our times, the World War II lasted for 6 years. Modern wars, predominantly, are much shorter.

Irrespectively of discipline - economics, military, legislature - things tend to go faster. I do believe it’s strongly connected with technology development. In fact, Daniel Smihula shows this law in numbers in his work[1] about technological innovations waves. He lists 6 big technological revolutions with a timespan of innovations wave, that is, a time that this revolution took to revolutionize the world. And so, after Smihula, for financial-agricultural (17st-18st century), industrial (18st-19st century), technical (1880-1920), scientific-technical (1940-1970), information and telecommunications (1985-2000) and our ongoing digital revolution, the wave of innovation length lasted, respectively, almost two centuries, a century, 60 years, 45 years, 30 years, and about 20 years.

Despite length of those periods, it’s  important to remember here, that these revolutions were all equally “revolutionizing”, that is, they’ve changed people lives to the same extent. It seems like we’re talking about long-lasting periods and still call them revolutions. So aren’t we in fact talking about an ongoing process of evolution, that’s simply speeding up a little bit lately? Therefore, what’s so special about our times anyway?

What happened to the knowledge worker?

Thoughts about evolution of surrounding world are crucial to find an answer for how to manage oneself today. But even more important is a question about “oneself” in this context. Peter Drucker introduced the “knowledge worker” term in 1959[2]. In a world that changes so fast, it should be examined, whether this over 75 years old term still fits our age.

Drucker called the knowledge worker a most valuable asset of 21st century institution, and defined him as a person who uses his knowledge (that is, ex termini,  information and skills) to be more productive, and by that to contribute to creating goods or services. The rise of the knowledge worker was an obvious consequence of a technical revolution at the turn of centuries. Former most valuable asset, physical worker, was easily replaceable by machines that worked longer, harder and gradually became more reliable. When our physical capabilities became obsolete, we found a way to generate growth, by redefining “work to do” from doing to thinking. Skills and information replaced strength and craft.

Today, information and knowledge are being devalued very quickly. It’s faster to google something out, than to recall it from memories. We don’t need to know dates and historical facts any more, and it’s unnecessary to quote our company’s sales volume on the go, as we can access it right away everywhere we are, ie. from our smartphone. Actually, we’re living in a world, where everything happens now, as D. Rushkoff brilliantly points out in his book “Present Shock”[3]. One of the consequences, that author didn’t mention, is that we don’t have time to use our knowledge any more. The information is outdated too quickly. A message tweeted an hour ago is old, a basketball game retransmitted 10h after it had been played is boring. Same about business - experienced manager in a mobile applications IT company knows almost nothing about how to conduct a high value service in a modern SaaS dominated startup reality. 5 years, and we have to learn everything from the scratch. Big international corporations hire and pay people straight from the college without any knowledge or skills needed to do their new job. They know it’s better to have people close and teach them what they need to know, rather than buy their knowledge directly.

If so, what’s really valuable today? I think we can find the answer in a weird way that huge companies like Google form a relationship with society. It looks like it doesn’t really matter no more if one works for them, uses their products, or spent money they’ve invested. Now, it’s all about people’s engagement and bond with the company. To succeed it’s not crucial to acquire greatest skills any more (they’ll be deprecated quickly, anyway). Now, it’s important to acquire the biggest devotion and passion, that will let people stay competent and contribute in some way. It’s also simply cheaper to teach someone eager a new skill, than to buy it on the employee market.

I think we need a new term. A person who gives his heart in a cause, someone who believes in a values that lasts irrespective of technology revolution or trends shifts. Someone, who believe he’s contributing to a greater good, whether he’s being on an 8h shift, or during his free time.

Dov Seidman, author of the Era of Behavior concept, calls our reality “human economy”. He defines it by confrontation with knowledge economy, where we hired brains and industrial economy, where we hired hands. Seidman concludes, that in a modern world we hire hearts. Going further, we’re talking about a new kind of worker - contributing not with hands, nor with his skills. Maybe it’s time to introduce an emotions worker - someone, who create growth by his heart and devotion.

Asking the right questions

To answer the question of managing oneself in our age (called digital), we’ve started from a sketch of how we could perceive the nature of our times (ongoing evolution), and a definition of oneself in this context (emotions worker). On top of those conclusions, it’s reasonable to clarify our understanding of “managing oneself”. How managing an individual resonates with emotions worker in continuously evolving and rapidly changing reality?

The problem we are facing today is a lack of clear indicators of success, adaptation, or whatever that concerns measuring a value, therefore an object of management. You can always assess a behaviour by a predefined set of criteria. But that way it’s almost sure our assessment will be inadequate, due to speed of change. On the other hand, we can evaluate a person afterwards, but that’s definitely not the way to plan or manage. This issue is maybe one of the reasons why so many modern philosophers and scientists rediscovered the eternal question to answer: “ what’s the right question to ask about human and its nature?”. The speed of change reminds us, that what we “should” do with our lives isn’t necessary a matter of what’s sufficient to survive and gain profits. This digging in human’s nature was popular in 20st century - just to mention few, completely different in style of asking the question: Aldous Huxley, Carl G. Jung, Alan Watts, or the whole wave of eastern gurus, like Juddi Krishnamurti or Bhaktivedanta Swami Prabhupada. If we look closer at the set of questions Peter Drucker asked in his widely appreciated article “Managing Oneself”[4], those also touch this subtle topic of finding the right questions, instead of answering specific schema. Drucker’s questions, like “Where do I belong?”, “How should i contribute?”, “Who am I?”, “What are my values?”, all have a twist of philosophical searching for meaning. It’s not my intention to delve into this important matter here, only to point out, that “managing oneself” isn’t about doing right or wrong stuff, or fulfilling some expectations and indicators. It’s about finding the right questions to build our self consciousness.

What’s special about our times?

By now I’ve argued, that there’s actually nothing new in the world we’re living in. The evolution is on, as it has always been, human is finding new ways to create value by shifting from hands work to brain work to dedication and devotion, and the big questions are resounding as they’ve always been. But there’s actually something special in our times - hence “(almost)” in topic of this paper.

Peter Drucker wrote about the issue of “the second part of life”. He pointed out, that first time in history, people will outlive organizations, therefore we will face a new challenge: What to do with the second half of one’s life? Drucker explained, that people will have to find their way, when their employer is gone. He raised this issue because of one big change people will have to manage in their professional life. And I’m completely sure, P. Drucker knew, that years later, people will have to face this kind of drastic change multiple time in their lives.

That’s what’s special in our times - for the first time in world history, the speed of change is so high, we can experience those technological and social revolutions more than once in our lifetime. Although nothing changed as a rule, our small perspective shaped by length of life has been shifted dramatically. It changes how we educate kids: there’s no point in teaching them practical skills, as they will be obsolete by the time they’ll go to high school. It also changes employment market: you can’t catch up after technologies replacements, so your staff fluctuates a lot, or you build a clan that is all about learning new things. Some research tells, that most of freshman students will work in professions that don’t even exists now (who’ve imagined a “drone pilot” 3 years ago?). Nowadays, we can’t even plan our retirement reliably - we have simply no idea how the world will look like 40 years from now.

So they’re not special because of specific technology, nor because of new possibilities or “the rise of robots”. The clue is acceleration of change, that we’re not familiar with yet.

Conclusion

We, as a humankind, have been through a lot of revolutions throughout the history. Each and every time, it made us stronger and opened new possibilities. The old questions we’ve been asking, about our identity and the nature of creation, always helped us find our way. Now, when everything is happening so fast, it’s even more important to look back and make use of what we’ve learned.

I don’t think we should be afraid of machines, robots, or technology. Neither do I feel there’s some special path we should follow in our times. The solution for us is to stick with fundamentals, just like those questions Peter Drucker asked for 21st century managers. The one thing we should definitely consider, is to keep in mind, that our ideas about future are probably false as much as they could be. Therefore, the solution for an emotions worker in an ongoing evolution is to abstract from what’s new and what we think will meet us along our way. Ask those questions, but drop the concept of exceptional circumstances.

The only thing we know about future, is that it will be different, so just stick to what’s natural and authentic, and everything will be just fine.

[1]  “Long waves of technological innovations” - D.Smihula, Studia Politica Slovaca 2/2011
[2]  “The landmarks of tomorrow” - P. Drucker, Harper and Row (1959)
[3]  “Present Shock - When everything happens now” - D. Rushkoff, Penguin group (2013)
[4]  “Management challenges for the 21st century” - P. Drucker, HarperCollins (1999)

IT organizational culture evolution in times of accelerating change

Long term sustenance of a profitable IT business is a big achievement, especially in current change momentum in technology development. Even bigger challenge is to achieve it with sustaining a high quality organization, ie. efficient, elastic, coherent and ready for forthcoming development - weather caused by growth or pivoting. This article highlights the starting point of modern IT organizations, from which they begin the process of evolution to this mature, high quality form. It also describes steps in most common transformation process, and suggests characteristic of an optimal target organization culture. The purpose here is to deal with the issue of forming IT organizations with mature, consistent cultures, the ones that in the same time succeeded economically. How to make a stable enterprise with all of its employees still being capabile to catch up after this accelerating change ongoing process? How to influence teams to not become passive and stagnant in the realm of grounded, comfortable organization culture, but rather to use it for boosting efficiency and building a sense of belonging ?  

The beginning of a change in modern IT organization

The accelerating change leaves a significant imprint not only on a daily lives of individuals, where it reveal itself with easier access to big data, longer life, alienation in cyber world or new issues on field of social coexistence or privacy in internet. Similar as with individuals, some pros and cons of the uncontrolled change of our world can be pointed out in the organizations reality. We can see those in particular in organizations vulnerable to effects of technological evolution per se - that is in IT, ecosystem which probably evolves faster than any other, and certainly in a most noticeable way.

The IT market was influenced lately mostly by the startup trend. By startups we mean small organizations built from the scratch, focused on creating a product, a products family or rarely on services or service chain. We can search for the roots of this trend at the end of century, precisely after 1997 [1], when famous C.Christensen’s book “The innovator’s dilemma” came up. It’s this book that popularized the concept of disruptive innovation as a key to generating growth and added value in modern economy. Especilaly in IT world, the concept fitted at sight because of two main characteristics of information technology:

• Fast technology advancement creates lots of opportunities to explore, but at the same time it’s very risky. Therefore, it was way easier for big companies to invest in external businesses, more independent and free of corporate ballast, ergo less expensive.
• The technology became closer to the human being in terms of ease of use. Moreover, it became ubiquitous, as we’ve started to use it everywhere and anytime. Those circumstances favored fresh brands with sharp and bright vision, that could have been identified with their products easily. And, behind those brands, there always had been some charismatic passionates fully devoted to the cause (=brand). This kind of sacrifice wasn’t possible for irregular IT giants.

After a few years IT market was strongly diagonalised between two groups: powerful companies reinvesting their cash in startups, and small startups trying to find their way to create return from investment. The landscape we can see today is the aftermath of this initial diagonalisation, and the biggest brands we know, ie. Instagram, Netflix or Uber lately, all  originates from those times. “Making a startup” became common and quite obvious way of doing business in IT (although we should mention that this term as itself is misused nowadays). However, it’s obvious that most of the times, new technological windows are becoming a triggers for new business, because those enables us to innovate by satisfying existing needs more effectively,  or create new markets (therefore explore new needs) with disruptive innovation. In most cases the second scenario (disruptive innovation) is manifesting itself on a field of B2C products, and during last couple of years it was dominated by a mobile revolution. However in both innovation types the startups were leading the way.

The evolution of a startup from it’s temporal initial form is almost always inevitable. From the organization perspective almost everything will change. Two main causes of startups’ organization transformation are:

1. The product/service delivered by a startup succeeds, so it’s natural to scale up the added value to reach more consumers, increase quality or grow in any other known way. Hence the expansion is natural, and it entails  new mechanisms of operation, as well as passing on some good old organizational habits. New rules, as well as quitting the old ones will definitely impact organizational culture.
2. Despite success, startup have to care about the added value it creates, that is evolve to meet their customers’ needs. Even in case of organizations that makes business straight from innovation as itself (That means those who focus on creating new markets, as it’s hard to find a lot of companies of this kind that consistently makes profit in Poland.), it’s inevitable to redefine some of their assumptions.  

We have to point out, that this evolution isn’t actually a 100% must. There are some rare examples of firms build upon the disruptive innovation concept, ie. those that create profit from design services, managing innovation initiatives or conducting commercialization of innovative products/services as their core business. But yet, those are negligible percentage, especially in Poland. Even though the world has identified creating growth by disruptive innovation as a best way of doing it, the economy of first decades of XXI century still consists on cash flow, which, according to Christensen, stands in opposition to disruption.

Organization culture description model

Organization culture change, as pointed earlier, is inevitable for startups, but it’s rarely a subject of coordinated, conscious process inside of organization. Even in cases of conscious raise of organizational culture topic, its creation and evolvement is spontaneous, though of course leaders dispose some powerful culture creation tools. Maybe because of spontaneity of this process and some kind of economic dynamics, the startup’s evolution to mature organization usually tends to follow a similar schema.

To describe this schema, to deliberate and conclude about organization culture, it’s crucial to adopt a conventional organizational culture description model. One of the most common out there and very efficient in the context discussed here is the organization archetypes model described on top of Competing Values Framework suggested by Cameron & Quinn in their work in 1999 [2]. The CVF model is applicable especially because it focuses rather on organization behavior and its outer surroundings, than on inner values,  communication or relations-based gradation. Shortly speaking, this model is adequate to talk about the organization in relation to its environment.

Pic1. Organizational culture archetypes matrix

This model consists of four quadrants splitting continuous 2-dimensional space in four. The x axis represents organization focus (inner - outer), the y axis: control factor (stability - flexibility). Each organization can be projected by a point in this space, and due to its continuity, it can be placed everywhere between some boundary values for x i y coordinates.

And so, the adhocracy culture (very flexible, with low level of formalisation) is highly oriented on external factors, which in this case means a product or service with its market position, and is also characterised by a low level of control (ie. high instability). Startups should definitely be classificated as adhocracy organizations. The other type that also focus on its external context is called the market type. In contrast to adhocracy, market cultures are highly controlled, because its necessary to have precise tools when you want to plan and verify goals, mostly economic. The best example (given by Cameron&Quinn) of those organizations are capital market and banking. The hierarchical culture on the other hand, is also characterized by high level of control, although the focus shifts from external to internal, hence the control here is about how well the company is operating and how it’s achieving its goals. We can find this kind of organizations among large international corporations, like IBM or HP. They have to care about the structures and commanding chain, because the size of organization is too big to take over manual control at any level in any moment. The last culture type, clan, is highly internally focused, but at the same time stays flexible and builds its identity and stays cohesive because of interpersonal relationships and values everyone believes.

First step in organizational culture evolution

Undoubtedly, organizational culture evolves, just as culture as itself does. What’s somehow cynic, it doesn’t matter which factors we’ll pick to describe it - shared values, atmosphere, management methods, employees mindset, symbolics and hidden meanings - all of those will be strongly influenced by economic circumstances and financial status of the company. As long as we consider organizations as profit-oriented companies, the company valuation and the efficiency of the way it earns money will be crucial, also for the process of culture forming. If we then accept the thesis that “each and every startup has to evolve because of the market maturation and hence new customers expectations”, it’s obvious to conclude that organization culture of startup also have to evolve. Shortly said, the world change, the people and their expectations change, and a company still has to earn money. Therefore, it changes too, also on the deep level of culture.

The economic factors, such as company valuation, its profitability and gain are crucial in organizational culture formation process, because they constitute an objective evaluation method for how good CEO’s are performing. The second biggest culture influence factor are the CEO’s, or more broadly, the organization leaders. It’s their doings that are directly pushing the organization towards (or backwards), however in most cases - what’s natural - mentioned economic factors dictates what they do. On the other hand, how they do it is a completely different topic. This how and what leaders do is a fundament of organizational culture. To put it in one sentence,  organizational culture depends on behavior and ambitions of leaders, who above all try to develop companies in changing markets conditions. At the end of the day it’s people who form organizations, and they don’t always act optimal in terms of profits (and it isn’t a bad thing), therefore the organization development path isn’t predestinated and obvious.

The case we are discussing here - the startups ie. adhocracy organizations can also evolve in many different ways. If we narrow those possibilities to three discrete directions resulting from CVF archetypes partitioning, we have three distinct possibilities:

1. Startups falls in love with itself - The Clan.

In reality this scenario is unlikely. Clan is a place where relationships and the way it operates are deeply grounded and efficient, so that focusing on “we” isn’t a threat of economic catastrophe. They just don’t spend much time on this inner stuff, it’s just happening naturally.  The team-oriented leaders, that believe that the best way to succeed is to gather a “dream team” of devoted people tend to create a culture of clan from the first day on - consciously or not. Moreover, a kind of brotherhood and the feel of power that comes after first victories can be misidentified with stable clan culture. What really happens is temporal, as to harden the steel it’s not only about putting whatever hot you have into cold water. It’s a process, mainly process of failures and raises. Following the early-clan pattern often causes big problems in prosaic matter, ie. work organization or managing crisis. To use a metaphor once again, early clan is like a monk-neophyte - struggling with regular everyday duties can quickly extinguish the fire of religious exaltation.

2. Building an empire - Hierarchy.

The combination of internal focus and the need of full control is a mixture that can be found among many IT founders with professional experience in large companies. The often grew up as a professionals working on big, complex and highly formalised projects, due to large and distributed teams, formal requirements ie. in public sector, or long duration. Leaders with this background tend to focus on structures and mechanisms, as they are afraid of chaos, which they experienced in they career. The well designed, flexible startup organization is starting to swell, there’s more and more to remember and coordinate, so things are starting to slip out of hands. The disorganization emerges as a serious threat. But the organizations dominated by rules and restrictions are quickly starting to suffocate - they operate inefficiently, because formal responsibilities takes more time than the actual work to do.

Especially during the first months or years of the company, even insignificant reduction of efficiency (that is, in this case, effectiveness of work time utilization) can be crucial in maintaining profitability and consequently the existence of organization. In practice, the startup-hierarchy transition is often quickly verified by the ruthless reality - the over-controlled surface begins to crack: excepting guidelines are more frequent that following them, and sometimes leaders’ heroic charges are the only way out of troubles, despite they break all the rules. What happens next is often a disaster - a company shifts to a handicapped kind of clan, in which the people “know better how to do their jobs”, or to a cynical kind of market culture, where people don’t believe in any higher values at all. They know they just have to “get the f..n job done”.

Pic2.  A job offer, translation: “You’re interested in software development? You’d like to begin coding?... you have to know one thing: The time of patterns, interfaces and weird objective philosophies is dead and gone! NOW IT’S TIME TO WORK YOUR ASS OFF! (very vulgar) ...Do’t waste your time for multiyear education and purely theoretical patterns, which you can use only in books. In real work there’s no rules, patterns, objects and no time for stupid tests. DEVELOPMENT IS SHOCK, SURPRISES AND FUCKED UP CODE! Come to us and see for yourself, how development really looks like. DON’T WAIT! SEND US YOUR CV

3. Aggressive penetration - The Market.

The market direction seems to be most reasonable (especially when it comes to profits), but it’s also most difficult for the team. The focus on product and innovation was something that brought all of them here, it was exciting, romantic and had been bonding the team together. The inevitable changes, such as product maturation, market grow and change, devaluation of added value delivered by the team in form of a product are often internally perceived as pejorative, and tend to decrease morale and team spirit. In such cases thoughts about the way the company works and how it operates is quite natural, and comes in form of unspoken concern:  “What will happen to us now?”. Then, to build a hierarchy or speak about relations and family-like clan is nothing more than turning head from the real issue. Frankly speaking, to form a market culture is a matter of sincerity of the leaders and the whole team - they have to realize, that they’re here because of the client, and their goal is to create a product they can sell and make money. They have to build a mindset of a final goal, which is not a piece of cake, and they all have to fight for it.

As we mentioned earlier, each of those scenarios is possible, as the culture transformation process depends mostly on leaders’ goals and ambitions. On the other hand, two of those paths are almost impossible to follow in modern economy, especially if we narrow our discussion to extreme forms of archetypical cultures (that means max values of both coordinates in each case).

The evolution path

Assuming - what we already did - that startups depends on mechanics of modern economy, dynamics of IT market and technology development, and that the business model of a startup doesn’t stand upon continuous innovation, we can draw an optimal path of evolution, which complies the outer conditions (enables organization to survive and grow), and on the other hand leads to organization maturity.

Pic3. Organizational culture evolution

The adhocracy (startup) evolution path begins with shift to market-oriented culture, that is from focusing on tidying up everything around product or service, and its market position. Subsequently organization tries to fix itself, as it could been hurt a little bit because of market strive and somehow brutal pursuance, that has been necessary in previous step.  After that, when the organization knows how to make money and its interior seems to be ordered, it can develop to a clan, in which some actions comes naturally, without overmuch control. At this point organization become able to innovate continuously, that is, to become product-oriented again.

Step 1 - Economical stability.

As mentioned above, for startup to evolve into market-oriented culture is the best scenario. Primary challenges to meet for a young company are liquidity, building efficient sales team and channels and gaining detailed knowledge about target markets. Those are most unstable and rough times in IT organization lifetime, and it’s the time when most of companies fail to survive. Therefore it’s crucial to focus on results - conducting working solutions on time and penetrating markets.

It can last a while to tame the market and stabilize the way the company makes money, but at this point it’s all about staying alive. However, if it lasts too long, the organization could lose key employees, and therefore loose competences key to generate growth or else, become a zombie without much perspectives for development. The fluctuation process is a serious threat - some creative, hence valuable workers don’t find themselves fitting well in market-oriented organizations, that aims for objectives hard to identify with.  Especially for engineers from IT world  company’s position on the market or generated profits aren’t sufficient as a motivators.

The key role of a leader here is to maintain a team spirit by carefully listening to what is going on inside of the company. Morale can collapse and enthusiasm can go away when people start to feel more like a piece of excel formula rather than individuals. While the company puts money making as a top priority, it’s a leader who should nurture organization’s tissue.

Step 2 - Operational stability.

Escape from market culture phase comes naturally with economic stability, that is at the moment when the company has it all going at least okin the matter of finances. The market-hierarchy shift process is of course evolutionary, not rapid. As it progress gradually, it’s hard to pinpoint the exact moment when the organization passes the virtual line between internal and external focus. It’s possible, however, to point the causes and first symptoms of forthcoming change.

Second step is most intuitive among the whole evolution process. Moreover, this organization shift is somehow inevitable and reveals itself spontaneously. If the leaders are accustomed to speak with their teams about their impressions, the need of “clean some mess up”, “fix some procedures” or “organize the way we work” will start to emerge. The reason for this will be organization tiredness due to intense strive for external success, that, as mentioned earlier, often doesn’t correspond with situation inside the company. For example, people had to work overtime, or do things quick & dirty, etc. Specially the latter can be dangerous in case of IT companies, as it decreases morale and put people in kind of gloominess, the feeling that “it’s not how I thought it will look like”. Neglecting this moment can have serious economic consequences - market-oriented organization starts to burn out, employee fluctuation increases and personnel costs raises.

Despite the fact, that Step 2 of organizational evolution is almost spontaneous, hence seems to be easy for organization, the work that leader have to do is probably hardest in whole process. As the need of order will be authentic and likely easily articulated by people, they won’t appreciate the “cleaning process” when it start to propagate. Rules, policies, structure and new mechanisms, that will eventually make employees living easier, will also entail some temporal difficulties, and will mean death to nonformal deals and unspoken rules that help people machete their way through the jungle. Therefore, a person or a team responsible for transformation process (let’s call he/them change agent) has to be ready for complications, and at some point an open reluctance. Team members can express disapproval or even boycott agent’s ideas and using their internal authority among co-workers, try to tidy up things around them. It in turns is a first step into chaos and conflicts. To succeed the leaders have to stay careful and react to organizational “mood swings” ably. The best support on this stage can be found in J. Kotter’s great book [3], that seems to fit well to a perspective we’re using here.

Step 3 - operational stability

Organizations, and among them IT companies,  just like most of living creatures, pursue to achieve optimal level of energy utilization, that is, to be stable and comfortable. That’s because changes which leads an organization to well composed, harmonically organized group of people will eventually be accepted and will last. This kind of comfortable organization unfortunately raises threat of stagnation. Company, where everything is predictable, safe and calm actually isn’t the best  place to develop for a individual. As they say, development begins outside of our comfort zone. Comfortable organizations is getting harder to change itself - it no longer focus on market (they already know how to make money), there’s also no need to risk anything. Stagnation, invisible at first sight, will eventually effect in lack of ownership among employees, and afterwards lost of identifying with the company. Stable, predictable company becomes boring and stiff, but occasional development opportunities are hard to exploit - sometimes its better to leave well alone.

Hierarchy culture is often the one that stays for a long time. Actually there’s a lot companies that never go further from that point. The biggest challenge for leaders at this stage is to deeply understand that this comfortable situation also have to evolve, and then to realize when the moment come to push the organization into the process. To do this, leaders should decrease predictability level and let off with controlling in favor of unmeasurable interpersonal relations, engagement and taking care of people individually. It should lead organization to a clan culture, a bunch of people knowing themselves extremely well, aware of what they’re capable of and what’s their purpose. Eventually, the organization become a place where detailed policies are perceived unnecessary, and at the end of the day even disturbing on the path of self-improvement.

Even though bring the organization to clan culture doesn’t require much operational work, it’s the toughest step to do through the process. Primarily, because to initialize and stimulate it requires making hard and smart decisions without having a clear answer what is right or wrong. It’s a matter of feeling. Secondly, to build a clan one have to actually resign from some of the rules he set by himself earlier, and were designed to simplify the decision making process. Hence, to put them away means to raise everyday risk of choices people will have to make. To become a real clan, is for leaders to honestly say “i check you” to their organization. It will be a moment of truth, a reality check that will say everything about strength of bonds among people and their common identity. It’s also a moment of ultimate verification of value that employees bring to the table - when rigid structure vanishes, what’s left is bare meat of organization, formed by a group of individuals.

We can imagine this moment as similar to removing a cast from broken leg - as the cast bearer had used to wear it and he’s highly concerned whether he will manage to walk on his own, leaving the cast for too long may hold off recovery and fill mobility.

Clan as an optimal organization culture for IT companies

The model of organizational culture description suggested by Cameron & Quinn doesn’t entail every aspect of it and we also didn’t digg deeper than quite sketchy distinction to four quadrants. Sticking to this generalization, clan seems to be the best culture archetype there is for IT organizations. That’s because of two main reasons: an genuine strive to develop and evolve, and external circumstances dictated by modern economy. Moreover, clan consequences with some virtues that organization can have, that are most valuable for IT in given conditions and time:

• The risk of spectacular and unexpected failures drops significantly. Highly experienced and coherent teams can quickly and intuitively react, they know their strengths and weaknesses, and therefore foresee most of potential threats.
• True clan means that company’s value, defined as a holistic perception of stability, risk, efficiency, market value etc., is moving close to the sole value of the team. That means that the staff is gradually increasing its share in this value. In the era of technological transformation, rapid market and needs change, the model build upon human resource investment is promoted by bigest authorities of management and leadership.
• To build a clan, leader has to first somehow refine the true value of his organization. To bring it to full coherence it’s necessary to get rid of some pieces of the puzzle that don’t resonate with what’s the organization about - hence the expression “raffinate” in the meaning of purification. Refined organization is strong and consistent one.
• Employees devotion and their ownership of the organization comes exactly from identifying with the place they work in and with people with who they spend their time.

If we change the scale of organizations we consider here, basic assumptions we made can be not adequate, just as we can apply classical physics to the quantum scale. In big scale the clan culture doesn’t have to the best way. Big organizations has their own big problems, predominantly completely different than those from discussed market (that is small and medium IT companies formed due to evolutionary process of startup grow). Except those big corporations, clan seems to fit perfectly. However, it’s wise not to forget about very crucial factor - leaders (CEOs) intuition and desires. To build an organization is a hard work to do 24 h a day, not only between 9 and 17. Satisfaction and pleasure it brings, and a sense of purpose are not less important than economic success. Despite we’ve focused on the market context (ie. capitalism), we can’t skip the fact, that people do business also because they love it. Without satisfaction of founders/leaders no organizations can last for long. Clan culture gives the leaders closeness to the people, they can directly feel how their work impacts lives of their team members. The organization becomes something more than just a work place. For a true leaders the biggest reward is to lead a group of people, who fully realize their individual full potentials, at the same time strongly contributing to a common success.

There are also some risks associated with a mature clan culture. The biggest one is a phenomena that we can call organizational aging. It’s not inevitable for a clan organization to become “old”, and moreover, it’d be a mistake to compare company elderness with human senility. They have much in common in sense of symptoms, but in contrast to people, old organizations don’t have to die shortly. The symbolic meaning of human advanced age also doesn’t apply to companies.

The primary problem of clan as mentioned earlier is a sense of peace and excessive calmness brought to the organization by a confidence and harmony. That’s because they lead to sloth, which in turn causes quality and effectiveness drop for easier tasks that don’t seem to look like adventures any more.

On the other hand, difficult tasks can become more uncomfortable, especially if they are far from what people of the company got used to do. That’s because mature clans tends to fossilize, ie. reduce its flexibility. The strength awareness changes organization’s optics of new challenges: from excitation and increased motivation, a kind of adventure, they become obstacles on the way of “being ourselves” (if they’re not what the team would like to do just now).

This strength awareness, just mentioned as a cause of typical clan problems, often contributes to the process of organization hermetization. The group starts to isolate from external factors, especially from new trends, foreign authorities or new ideas. At some point, clan can overestimate it’s own value so much, that it’s impossible to move it even a little bit, unless it does it by itself, from within. Then, new ideas and new team members has to go a long way to fit in and be accepted. We can use an analogy to japanese family businesses or italian crime families: they have a flat hierarchy, a huge cohesion and extremely close relationships in the group. New members adopt slowly,  new ideas and methods has to be formerly organically accepted.

This forcing of changes - though actually not popular - is sometimes a must. In clan culture it can sometimes become impossible. Strong bonds in clan don’t favor blindly following orders, and clan mentality don’t favor acting without belief either. We can image lots of examples where walking the same path isn’t the best way, even when people feel it is. Sometimes organization simply doesn’t have any choice but to break things a little bit. To use the crime family analogy one more time, authority can click from time to time only if mobsters totally rely on the boss and his absolute power.

Self confidence and laziness, if accompanied by relative peace and known future of the company, usually leads to impoverishment of technological skills in organization. The story of success and employees proficiency in using known tools and frameworks aren’t doing good for learning and discovering new possibilities. People can be convinced they will do just fine, and those new toys are good for script kiddies. This syndrome refers particularly to engineers (ie. software) having problems with letting their main technology, which they grew up from, in the rearview mirror. Many companies are getting touched by this issue from time to time, many not even close to clan cultures. In clan however this phenomena can potentially be hardest to overcome. What is worse, problem grows gradually, and doesn't tend to disappear without intervention.

What to do where we’re already there?

Predictability, effectiveness, employees devotion, satisfaction and fulfillment. The clan culture is definitely a best candidate to be called the best organization culture for small and medium IT companies we can imagine. Going further through organization’s lifetime, we may ask a question - how to nurse well-formed, mature clan culture?

The key manipulation to use right from the starting point, the one that should strongly influence the culture, constitute teams and become a part of everyday living for employees is to make them feel a bit insecure. It’s about a mixture of restlessness and excitement that should define how people in organization look to the future. Despite how close people are to each other, how well the company is doing and how spectacular are its victories, people should always stay restless. Unfortunately, we can’t force it with words, nor shall it work imposed too late - then this urgency will hit the wall of ignorance, negligence and cynicism.

Most subtle, hence difficult task is to apply appropriate level of this urgency to the organization.  When too low, it won't solve the mature clan issues that were previously discussed. When too high it can at some point paralyze inner relationships and can raise new problems of dysfunctional organizations (unhealthy rivalry, egoistic individualism, teamwork issues). It’s almost impossible to name and describe the optimal level of uncertainty, as it’s influenced by so many factors. It’s possible however to describe actions, that when made consequently, will contribute to build flexible and change accepting clan. Those two actions are continuously challenging and the cult of failure.

 Failures, not to be confused with losses, are absolutely crucial to grow and become better. The lack of failures means that someone (or something, ie. organization) haven’t even try to push the limits, that is, he don’t actually know what he’s capable of, how he performs in new surroundings and where he should improve. For every conscious leader, that’s something absolutely unacceptable. It’s good to fail, as long as we learn on our mistakes. You don’t fail, if you dont try. If you don’t try, you’re not engaged. In mature organization, there’s no place for lack of engagement. Although, it’s not enough to simply expect people to fail. It’s important to build a climate for failing, a culture where spectacular mistake is associated with a huge lesson learned, which in turn is the basic expectation from employees - “There’s no place for laggers among us, so become better constantly. I expect that from you, and expect that from me.”. Of Course, it’d be nice not to ruin everything just because we want people to fail. They should fail when there’s time for lessons, and win big when it’s a test time.

To fail productively, that is by not devastating organization’s ongoing commercial projects is possible only if team members face big challenges on a regular basis. Some of them like to struggle, but others tend to seek tranquility, which will come easier in clan organization. So, again, is the leader who should care about challenging people not to become stiff and to push them through their personal limits. It’s desirable to see employees ask their boss for more ambitious tasks, as those already allocated don’t let him learn new things. It’s a good sign, a sign of thirst for challenge. Those emotional stories told next to coffee express about “spectaluar crash”, “epic fuckup” etc, in which the culprit appears as a strange kind of hero are, on the other hand, a sign, that to fail is something valuable. This “failure stories” and thirst of challenge are what should make us feel proud about our clan culture.

Epilogue. From Clan to… Adhocracy ?

Picture 2 shows a red dotted arrow representing adhocracy derived from a clan. We named “innovation” as a reason to traverse from left to right along the focus axis. After all those deliberations, it’s a good idea to interpret this notation.

We eventually have to ask ourselves a question: is a clan sustained with help of continuous challenge and failure cult still a clan? Maybe this readiness to change and willing to evolve still meets Cameron&Quinn’s definition of a clan ? Going further, where does the organization go from clan, when it’s fulfilling those “mature clan” guidelines? That’s what the arrow points to - a “mature clan” is in some way adhocracy.

I allow myself to suggest, that in realm of accelerating change, what mature clan really needs is flexibility and dynamism to cope with new challenges and create innovation from within the organization. The ability to react to unknown and passionate engagement makes clan somehow similar to adhocracy, just as on Picture2. The arrow is dotted, as clan will never really make this step fully; to quote the age comparison one more time, grown up man won't become a child again. He can, however, learn to maintain his “mind of a child”, cuteness, sharpness, freshness and hunger for a new.

[1] “The innovator’s dilemma”, C.Christensen 1997

[2] “Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework”, K.Cameron, C.Quinn, Wiley (1999)

[3] “Leading change” - J. Kotter, Harvard Business School Press (1996)