BUS603: Managing People

Organizational structure is the actual arrangement of domains and their connections. It reflects where power to influence is located, and the channels through which information and influence flow.

Continuously evolve your organization's structure to:

• support the continuous flow of value
• enable effective collaboration around dependencies
• ensure information is available to those who need it
• distribute power to influence as required
  

The basic building blocks for organizational structure are interdependent, connected domains.

Domains can be linked to form a hierarchy or a heterarchy (a.k.a. complex adaptive system, or network, where multiple functional structures can co-exist).

Sociocracy 3.0 describes a variety of structural patterns to grow organizational structure.

• S3's structural patterns apply to different layers of abstraction
• different structural patterns serve different drivers
• structural patterns can be adapted and combined as needed
• more patterns are out there and will be discovered
  
  

Delegate Circle

Delegate making governance decisions affecting multiple domains to representatives selected by those domains.

To make governance decisions on their behalf, stakeholders send representatives to form a delegate circle.

Governance decisions made in a delegate circle are acted upon in the various domains it serves.

Delegate circles provide a way of steering organizations in alignment with the flow of value, and bring a diversity of perspectives to governance decision making.

A delegate circle may bring in other people (e.g. external experts) to help with specific decisions, or even as a member of the circle.

Service Circle

Outsource services required by two or more domains.

A service circle can be populated by members of the domains it serves, and/or by other people too.

Peach Organization

Deliver value in complex and competitive environments through decentralization (of resources and influence) and direct interaction between those creating value and the customers they serve.

Teams in the periphery:

• deliver value in direct exchange with the outside world (customers, partners, communities, municipalities etc.)
• steward the monetary resources and steer the organization
  

The center provides internal services to support the organization.

Domains are linked as required to flow information and influence, and to support collaboration around dependencies.

Double-Linked Hierarchy

Delegate all authority for making governance decisions to self-governing circles, double-linked across all levels of the hierarchy, to transition from an traditional hierarchy towards a structure more suitable for tapping collective intelligence, ensuring equivalence and building engagement.

1. Shift governance decision making from individuals to teams by forming self-governing circles on all levels of your organization.
2. Each circle's members select one of their group to represent their interests and participate in the governance decision making of the next higher circle, and vice versa.
   

A double-linked hierarchy:

• brings equivalence to governance
• maintains the potential for a functional hierarchy (if it enables the flow of value).

Service Organization

Multi-stakeholder collaboration and alignment towards a shared driver (or objective).

• improves potential for equivalence between various entities
• increases cross-departmental/organizational alignment
• supports multi-agency collaboration between departments or organizations with different primary motives, or that are in conflict
• suitable for one-off projects, or ongoing collaboration
  

Note: a service organization is sometimes referred to as a backbone organization.

Fractal Organization

Multiple constituents (organizations or projects) with a common (or similar) primary driver and structure can share learning across functional domains, align action and make high level governance decisions (e.g. overall strategy).
Creating a fractal organization can enable a large network to rapidly respond to changing contexts.

If necessary, the pattern can be repeated to connect multiple fractal organizations into one.

Prerequisites

A fractal organization can be formed either by multiple in(ter-)dependent organizations which share a common (primary) driver, or by multiple branches, departments, or projects within a larger organization.

These constituents (i.e. organizations, branches, departments or projects) need to share at least some - and typically most - functional domains (e.g. accounting, product management, or development).

Tiers

A fractal organization has at least three tiers:

• first tier: the constituents (i.e. organizations, branches, departments or projects)
• second tier: function-specific delegate circles to share learning and to make and evolve agreements on behalf of function-specific domains
• third tier: a cross-functional delegate circle to make and evolve agreements in response to drivers affecting the overall body of constituents

Forming a Fractal Organization

1. Forming the second tier: In each constituent, the members of each common (and significant) functional domain, decide who of them will represent them in a function-specific delegate circle, where they share knowledge and learning, and contribute toward making and evolving agreements. Representatives are selected for a limited term (after which a new selection is made).
2. Forming the third tier: second-tier delegate circles each select a delegate to form the cross-functional delegate circle.

Impact on the organization(s)

Each constituent:

• gains access to a wide array of experience, wisdom and skills to increase effectiveness and innovation.
• can share resources, infrastructure and experience with other constituents according to capacity and need
  

The second and third tier:

• can test decisions simultaneously across multiple instances of a function-specific domain, providing extensive feedback and rapid learning
• organize, align and steer the whole system while preserving autonomy and agency of the individual constituents