Form should follow function...ality

Reflecting on some experiences with organizational design, I am revising the design principle that form should follow function to focus on what works in the short term rather than the ideal outcome.

Photo by Anders Jildén on Unsplash

A friend recently reminded me that anniversaries are eddies in time, moments to let our memories linger on significant events and revisit them with curiosity and compassion. I had been remarking that there seemed to be more going on with my restless sleep than just jet lag, and reflected on a couple of incidents related to the long tail of something that happened about a year ago. She invited me to sit with this disquiet, as a way to look back and listen to what I was feeling and sensing with the benefit of temporal distance. And here is where I landed:

A year ago an organization I co-founded went through a governance crisis when then management and a faction of board members proposed dissolving it. They went about it in a way that was technically permitted within the organization’s governing documents, but flew in the face of what the organization is about. By April of last year, those of us who were not ready to let it die were prevailing, and the organization has been resetting after accepting the resignations of management and the activist board members. It is alive and well now.

Reflecting on this experience, what I have come to realize is that no amount of care in drafting the governance documents could have anticipated the sequence of events that transpired. Governance documents serve as a fallback for the people working inside an organization, and outline the rules of the road for resolving conflicts, making decisions, and setting the overarching parameters of how an organization functions. They cannot and should not cover every eventuality, and so the organization has to learn to function on a daily, pragmatic basis that creates a shared understanding and culture of its why, what and how.

There is sooooooo much that can go wrong inside even the most well-intentioned organizations!

Karla Monterroso

who I very much admire speaks eloquently about the disconnect that can happen between the hierarchical core and the social core of an organization, or the founders and a team of people that work together towards a shared vision.

As I have learned the hard way, that co-creation and co-learning in a new organization can be hindered by a form that is oriented to the ideal, eventual functioning of what is envisioned.

We designed the organization as a hybrid—combining a for-profit multi-stakeholder cooperative to create value for its members with a non-profit org that serves as a mission anchor and holds a golden share in the co-op to safeguard its mission and vision. Just in writing this out you can see that this is not likely to be a familiar form for most people. 🙃

And yet, that form is ultimately the perfect expression of what we wanted the organization be able to do—create value, including financial value, for its members while protecting it from hostile takeovers through a golden share that would be stewarded by an aligned non-profit. And coincidentally, that aligned non-profit also allowed us to attract grant funding for some key programs, since nothing about raising capital for new cooperatives is easy. It was a beautiful design, but one that befuddled the group of people that came together to lead and operate the organization in its early days.

Those of you who know me know which organization I am talking about, but that’s not what matters. What matters is that a design oriented to the ultimate functioning rather than the immediate functionality creates a potentially fatal risk to the organization.

I have seen this a number of times over the course of my professional life, that an elegant organizational design created an operational challenge that has led to confusion, anxiety, strife, and / or abandonment of some key elements that made the design successful. In one notable example, the organization let go of the major money earning subsidiary in its complex hybrid design because people became wrapped around the axle about what it meant to have a profit making entity inside a non-profit structure. It meant earned income and unrestricted assets, but successive generations of workers in this organization saw market activities as ideologically incompatible with the mission. 🤷‍♀️

In another example I have seen people create tech enabled newfangled governance structures like Distributed Autonomous Organizations (DAOs) that require such a degree of tech literacy that a great idea like collectively owned music streaming becomes off putting to the regular folks who just want to listen to music online.

In one of my favorite recent calls with a successful entrepreneur who wanted to start her next great thing, just my outlining some of the complexities of doing it all participatory from the start led her to just go back and create a simple LLC to just get going! 🤣 I essentially talked myself out of a lucrative contract to help her with that more complex design, and that was absolutely the right thing to do!

What are some examples of organizational over-design you have seen or experienced?

Behind the paywall I share my recipe for avoiding these disasters, and as always, my brain is available for rent if you need help with the structure and strategy for you vision. 🧠