Why is the Org Chart Dead?

Because it is a 2D Tool in a 3D World that allows big money to drop off your table.

An Org Chart is an old fashioned approach that does not engage employees and does not address the realities of modern organizations, leaving huge gaps where your money pours through!

 

Modern Org Chart Model

The Org Chart: A 2-D Tool in a 3-D World

By: Walt Brown: CPA, Business Owner, Employee Engagement $ Impact Expert,  Statistics Major… walt@7q7p.com  linkedin

Our “A players”, the people we want to attract and retain are continually striving for organizational clarity, in their heads they are attempting to make sense of all the Meetings, Teams, Relationship, Systems, Processes, Projects, Objectives, etc. with little more to go on than a 2-D Org Chart, a top-down, hierarchical tool that hasn’t changed in thousands of years, (remember the Terracotta Warriors buried with a Chinese emperor circa 210 B.C.). It is closely tied to its military roots, soldiers ordered by “rank and file.” Today’s Individual Contributors still hear echoes of the old MO: “Why?! Because I said so! Now, get back in line!”

Are architects and engineers still using pencils? Of course not. With the help of Computer-Aided Design, they engage in incredible 3-D modelling and produce designs that would have been impossible thirty years ago. Engineers can now build entire machines with 3-D printers, and medical diagnosis has leaped forward with MRI imaging that can distinguish types of tissue at a fine level and present their complex gradations with dazzlingly clear 3-D visualizations.

Only in business are we still relying on a 2-D, the-world-is-flat analogue tool, the old-fashioned Org Chart, to understand a complex, technologically advanced environment. It’s as if NASA or SpaceX were relying on cave drawings to run their space programs.

The resulting lack of clarity for those conscientious individual contributors, the stars who organizations should be nurturing, manifests as frustration and, ultimately, disengagement. More than two-thirds of U.S. workers are not actively engaged at work, according to Gallup’s famous engagement survey, and over years of working with organizations of all types and sizes, I have realized that the absence of Organizational Cognizance is often to blame.

Poor engagement, of course, hits the bottom-line in all sorts of ways – performance, retention, sick time… If, for example, your average retention period is 3.2 years, essentially, 30 percent of your ICs will be new every year. How long does it take to reach maximum ROI (return on investment) with these new hires? My clients tell me that before they installed an Organizational Cognizance approach and OGraph, their people would spend three to four months just getting “up to speed” – understanding what they should be doing, who to turn to with questions, where the nondairy creamer is stored. This is time when they’re not really earning or producing for the firm. In year two they reach 50 percent ROI, and at year three they get to 75 percent. It is only in year four that they can count on 100 percent capacity ROI.

Imagine if you could shorten the hemorrhaging period and get ICs up to speed in two months, to 75 percent effective in twelve months, and to 100 percent by the end of year two. Assuming your retention stays at 3.2 years, (and, by the way, it won’t with Organizational Cognizance – it will improve to four and five years) you will enjoy a permanent 15 percent gain in employee productivity. That’s FIFTEEN PERCENT straight to your EBITDA.

The obvious problem here is that ICs are moving on after year three, you are continually retraining, and the organization never sees a decent ROI. At Layline, a pre-Internet catalog business I started many years ago that became a pretty successful dot-com, during orientation we always had a second-year Coach immediately teach every new crew member how to navigate MOM (our product and order system) and DAD (our searchable tribal knowledge intranet).

When someone asked a question at Layline, we could lovingly say, “Have you checked with MOM or DAD? I think they have the answer.” With this approach and backbone in place, people got up to speed very quickly. This solid frame of self-serve reference helped them understand our Systems, Processes, Workflow, Meetings, etc. – and they learned to find the answers to most questions on their own. If MOM and DAD didn’t have an answer, we discussed what it should be, and with guidance from his or her Coach, the answer-seeker would do the update. Like the Organizational Cognizance Model, which draws heavily from this experience, it was a self-maintaining, self-improving system updated by ICs, the real-world users.

Yes, we are in essence reproducing the MOM / DAD solution, but maybe it is called a LMS, learning management system, to use fancy words.

The key point, as we’ll explore in depth later, is that my clients take the same systematic approach to keeping their Organizational Cognizance Models up-to-date. The people interfacing with the Nodes and Connections data are the ones who update it and improve it. It is a dispersed effort, owned by the ICs who are using it every day.  If you can’t buy this, then you are a dinosaur and should stop reading now, but, wait, dinosaurs don’t read, right?

Imagine how much time organizations following the Organizational Cognizance Model, with Jobs defined by Positions clearly mapped to all relevant Nodes, can save on training and on-boarding. (Yes, the Organizational Cognizance software can double as your LMS, or Learning Management System, which, in essence, is what it functions as. Whether the training material is embedded in the Skill Node as Rich Text, attachments, or videos, or you use the Skill Node to link to your existing LMS, it will be easy to navigate from one central location, tied to one’s Position, with home plate as the Person – our primary Node.) How much money and effort might be saved if you could cut in half the time it took to get a new IC to the status of Minimum Viable Employee, to 75 percent effective, or to 100 percent ROI? How might organizational performance improve if by reducing frustration and boosting engagement, the OC Model lengthened your average retention time from 3.2 years to four or five?

As bonus Material – Let’s link this directly to Employee Engagment – According to Gallup statistics, when you can engage your employees, the below returns are what you should expect.

21% Increase in profitability

10% Increase in Customer Loyalty and Engagement

17% Increase in Productivity and Sales

40% Decrease in Product Defects

70% Decrease in Safety Incidences

40% Decrease in Absenteeism

59% Decrease in turnover in high turnover environments

24% Decrease in turnover in low turnover environments

These are real numbers and they are the ROI numbers our clients see when they embrace OCOG and use OGraph.

The chart below shows how the 14 Point OGOG checklist supports Gallup’s 12 Questions of employee engagement

How the OCOG Structure model supports employee engagement and gallups Q12

 

Below is excerpt from Walt Brown’s Book: Death of the Org Chart – Rise of the Organizational Graph.

THE CASE FOR ORGANIZATIONAL COGNIZANCE®

Rumor has it that when business guru Peter Drucker was on his deathbed, someone asked him, what is the most important question in business? He supposedly replied, “Who is doing what?”

Such a simple question and yet it has never been more difficult to answer. Obviously, this query implies others. Even in Drucker’s time, it could have been expanded to: “Who is doing what, with whom, for whom, how, and why?” These days, we must also add, “…using what software, on what platforms, as part of what teams, through what communication channels, after which meetings…” ad infinitum.

Modern day business guru Dan Sullivan of Strategic Coach teaches entrepreneurs that the key to their time freedom and ultimate success is to think Who not How first.  He couples this thinking with a tool he calls his Impact Filter that gives the Who a well thought out reason that the Who can intellectually and emotionally buy in to and figure out how to do it. The Who, in our model is the Individual Contributor (IC) who is moved toward cognizance via Sullivan’s Impact Filter which basically outlines the Purpose of the Position the IC is getting ready to take on.

The old question, like the classic Organizational Chart, gets to something vital, but in a way that misses the ever more complicated reality of 21st century organizations. Not only has “Who is doing what?” turned into an incredibly complex question, “What am I doing and why?” has become a painfully difficult one for workers to answer.

Our goal here is to provide an approach and a set of tools that allow both leaders and Individual Contributors (ICs) to answer these extended Drucker questions honestly and completely. Our aim is fourfold:

  • To help people understand organizational complexity – the messy complicated reality, not the neat simplicity portrayed in Org Charts. CEOs will be able to get the answer to “Who is doing what, and why?” and individual contributors will be able to get their answers to “What am I doing, and why?”
  • To provide a clear foundation for working within this complexity by supplementing your thinking with a 21scentury Organizational Cognizance Model.
  • Introduce a software approach to augment your 2-D Org Chart with a dynamic, interactive 3-D Organizational Graph that allows one to capture and visualize the complex.
  • Finally, to provide thinking tools and facilitation examples that help organizations get buy-in, build clarity, transparency, and, ultimately, “Organizational Cognizance” into their companies.

What is Organizational Cognizance? As anyone familiar with the word “cognizance” might guess, it has lots to do with awareness and knowledge, but my use of the term also hearkens back to an earlier definition related to concepts of belonging and connectivity. In the days of knights and heraldry, a “cognizance” was a distinguishing mark or emblem worn by retainers, members of a noble house, to indicate their firm allegiance to it, a sign of their belief, a sign that they belonged, fit, and were connected.

Organizational Cognizance is about building awareness and knowledge for Individual Contributors and helping them, their fellow team members, and leaders to understand precisely how they are connected to others and to the organization at a fine level, where they fit and how they belong.

If we had to write an equation for Organizational Cognizance, it might read:

Awareness + Knowledge + Connectivity = Organizational Cognizance

Perspective: The Individual Contributor. A quick example will make the concept clear. Imagine yourself as a new employee, or Individual Contributor, starting at an organization, and you are presented with the company’s Organizational Graph, based on the Organizational Cognizance Model. The Model is built around your Job and the Positions you hold in that Job. Individual Contributors wear various hats, and most Jobs include at least several Positions, as we’ll explore in depth in Chapter 2. A Job called “Sales Associate,” for example, might include a Customer Greeter Position, a Sales Consultant Position, a Sales Invoicing Position, a Market Feedback Position, and a Business Networking Position.

On day one, the Organizational Cognizance Model provides you as an individual contributor with the answers to all of these 14 questions; the 14 Point Checklist:

  • What is the Purpose of my Job?
  • What Positions do I fill as part of my Job? What is the Purpose of each Position?
  • Who do I report to?
  • Who is my Mentor?
  • Who do I turn to for Coaching in each of my Positions?
  • What Teams am I part of?
  • What Meetings will I attend?
  • What Entities (clients, projects, contracts, etc.) will I interact with?
  • What Workflows do I participate in?
  • What Processes will I follow?
  • What Systems do I interface with and need to master?
  • What are my Objectives?
  • What are my Key Results?
  • What Skills or Competencies do I need now and in the future?

I am not suggesting that an IC can be Organizationally Cognizant an hour after filling out HR’s forms, yet, armed with all of this info, a team member can be pretty damn aware on Day One. She will understand where and how she fits in, to a degree that some employees never enjoy, even after years at an organization. She immediately has a map to reference, independently, and already is travelling down the road to feeling that she believes and belongs and understands her Accountabilities. She is starting off with the answers she needs to become Organizationally Cognizant.

I used the word “awareness” above and it’s certainly related, but I want to emphasize that the state I’m describing as Organizational Cognizance for our hypothetical team member is much deeper than mere awareness. A couple of examples will help.

Let’s say a company occupies five floors of a skyscraper. ICs show up to various departments on five contiguous levels every day from nine to five. Proximity breeds awareness for these employees – they know where Accounts Receivable is, three floors down, and that a dozen or so people work in Marketing two floors up, but they don’t have Cognizance. They don’t comprehend at a deep level what’s going on outside of their cubicle, and certainly not outside of their department. They don’t understand how their work affects other Teams and Workflows, what the Purpose of every piece of their Job is or how each tie to the Purpose or Objectives of their Team, Department, Organization. They are not Cognizant.

Humans share the same five senses. Touching, smelling, seeing, hearing, or tasting something means that you are aware of it. What’s that I smell? Smoke. Smelling smoke is awareness but comprehending that the smoke you smell is wood smoke from a cozy fireplace versus an electrical fire starting on the floor below you is Cognizance. The latter level of comprehension requires grasping a bigger picture, understanding context, getting how things are connected, what they mean, and where you fit.

Cognizance is easy when it’s just you. I often use the example of Paul’s Painting Company, a one-man business. When we list out all the things that have to be done and thought about for this tiny organization to function, the list runs into the hundreds. There are five thinking Positions (as I said, we break Jobs down into Positions in the Organizational Cognizance Model) and dozens upon dozens of doing Positions. This level of complexity exists for a tiny contractor that doesn’t even use a computer, and Paul has Cognizance because it’s just him. He occupies every Position, so he understands on a deep level how they relate and what their Purposes are as they align with the whole. Once you begin adding people, even a handful, it becomes much harder to achieve Cognizance or to answer: “Who is doing what and why?”

COGNIZANCE BREEDS ACCOUNTABILITY

Since selling my company Layline.com in 2006, I have been stacking up Malcom Gladwell’s 10,000+ hours, helping more than 200 organizations large and small, in many fields, build Organizational Cognizance by figuring out who is doing what, with whom, for whom, how, and why? This work led me to the Seven Questions and Seven Promises critical to cultivating culture and engaged team members, detailed in my book, The Patient Organization. (Engaged ICs answer “yes” to these 7 Questions: Do I belong? Do I believe? Am I Accountable? Am I measured well? Am I heard? Am I developed? Do I have balance?). The book you’re reading grew out of that earlier one as I began to focus on the tricky “hinge” question of the Seven, Am I Accountable?

True Accountability goes hand in glove with what I began to think of as “Organizational Cognizance,” a term that crystallized a lifetime of work, starting, running, and, ultimately, coaching companies. I know from experience that people generally want to do a good job. They want Accountability, but organizational life has grown so complex and opaque that they are hazy on their Positions and Purpose, how the many pieces connect, and where they fit. Most organizations don’t offer them true Accountability, and the skeletal old Org Chart doesn’t really help.

What if we could radically clarify Accountability? Imagine an organization where Individual Contributors are truly Cognizant of the Workflows and Processes they touch and the Systems they InterfaceWith. Imagine an organization where every IC fully appreciates why each Meeting he attends is important, how it relates to his Positions and Purpose. Imagine the guy who only knows he must pull Lever Y in order to collect a check, suddenly comprehending how this work impacts the work of colleagues, clients, and the organization as a whole. Imagine an organization where all systems we log into – ERP, HRIS, accounting, manufacturing, quality control, etc. – are fully mapped to Jobs, Positions and Objectives, integrated, with connections clearly spelled out.

An organization with this sort of transparency and clarity creates incredible levels of engagement and belief. What do I mean by belief? As anyone who has worked with me or read The Patient Organization knows, I firmly believe that an organization is a fiction, only given meaning and power by those who believe in it. If you have 200 people and 90 believe the organization means one thing, and 110 believe something else, you have two organizations, not one. You have already been divided and are on your way to being conquered. If some ICs don’t believe at all, the organization suffers. If enough stop believing, it disappears.

It’s tough to believe in something – Jesus, Buddha, a country, a company – if you don’t have a true sense of what it is and how you’re connected to it. Belief, at the risk of stating the obvious, demands Cognizance.

 

THE ORGANIZATIONAL COGNIZANCE MODEL AND THE ORGANIZATIONAL GRAPH

That all sounds good, we can hear some readers saying, but it’s too complicated man, especially for a new employee. Yes, if you’re relying on a traditional 2-D Org Chart, it’s far too complex, which is why we developed the Organizational Cognizance Model Graph Schema, a “3-D” visualization that makes all of the “Nodes” listed in the questions above (Job, Positions, Teams, Meetings, Workflows, Systems, etc.) and the IC’s relationship to them crystal clear (more on Nodes and Relationships / Connections / Edges later). We have also built user-friendly Organizational Graph software that allows ICs and leaders to quickly and easily build out, view, and investigate their own Organizational Cognizance Models. It is now “easy” to adjust existing Models and to gain insight with a variety of dynamic views (hierarchical, circular, symmetrical, global, orthogonal, etc.). We call this software solution an Organizational Graph, https://ograph.io.

The icons, which represent Nodes in the Organizational Graph above, and the “Edges” – those lines / arrows indicating how things connect – can be manipulated with a few mouse clicks in the Organizational Graph software, then expanded, and viewed through various lenses to build Organizational Cognizance for the IC or leadership. Details and Rich Text get built into each node, where you can upload files, embed videos, pictures, files, create links etc. for a colorful universe of information –  easily accessed, expanded, or contracted with a click.

This intuitive software is eminently helpful, I think, but certainly not a requirement for developing Organizational Cognizance. The important thing is finding a friendly, manageable way to visualize all relevant Nodes – Positions, Meetings, Processes, Workflows, etc. – and how they connect. Spreadsheets and other tools can also be enlisted. I was personally thrilled to discover the potential of Graph Database technology (think use cases like Facebook and LinkedIn, graph software like Neo4J, Amazon’s Neptune, Microsoft Graph, etc.) used in this software for two reasons: first, because it makes visualization so easy and functional, and second, because technology has played such a large role in complicating organizational life, I figured it was high time that a tech solution made our structures more navigable.

Think of the layers upon layers of complexity that have been added to organizations – and on the backs of ICs over the years – many of them a result of advancing technologies. Once upon a time, employees at Organization X worked at a central location. They reported to a single boss from a relatively static Job. Communication was spoken – face-to-face or on the phone – and each process tended to have a person attached to it (a paper invoice arrived in an envelope, and a person opened it; he put it in a box for the person who approved it; she stamped it and moved it into another box for the person who made manual journal entries into a ledger…).

The old formula was Job = Position = Person, 1:1:1. Hierarchies were rigid, and, as on sailing ships of old, thinking was done mostly at the very top – by a captain and a tiny handful of lieutenants. The handwork was done by sailors actually grabbing hold of and muscling the lines. In that paper-based world, the two-dimensional Org Chart provided an adequate birds-eye view for a top-down “command-and-control” model.

Today, there’s no more central 9-to-5 location. ICs are working remotely, from home, at co-working spaces, on trains, and in coffee shops – according to all sorts of flexible schedules. They often don’t know when reaching out if a colleague is across town or across the globe. The office is defined by cell phones, laptops, tablets, and WiFi – not a desk, landline, calculator, four walls and a window. An IC reports to various people, depending on the project, task, or team on deck, though, practically speaking, she might have no traditional “boss” or “supervisor” on a daily basis.

And we haven’t yet mentioned the number of systems, automated processes, and communication channels that even a frontline IC now encounters on a daily basis. In my work with organizations of all types and sizes, I sometimes ask leaders to take an inventory of the various systems that their ICs use to communicate. A thorough list often includes twenty or more. Add to this CRM (customer relationship management) software, vendor platforms, human resources systems, facilities apps, internal networks, and the countless other systems and processes now present at a typical organization, and it’s no mystery why “Who is doing what?” looks more like the scary lid to Pandora’s box than a simple question.

I have a client that calls their many systems their “list of Slogins,” as in, all the stuff you have to log into and slog through

These systems, apps, processes, and communication channels are usually introduced by well-meaning decision makers to improve service or efficiency, to save labor, or make life easier in some way. Many do. Many are invaluable tools, but all add a layer of complexity. Like meetings and memos, they proliferate insidiously until an Individual Contributor who wants to figure out her Positions and Purpose and how they relate to long-term Objectives might as well be delving into astrophysics. Simply trying to understand why a particular Meeting matters or who to turn to for Coaching on X or Y can be a daunting prospect. So, what does the IC do? Nothing. They adopt the attitude that it’s better to keep one’s mouth shut and appear uninformed rather than opening it and removing all doubt. Let’s break this fear cycle.

 

COMPLEXITY TESTS HUMAN LIMITS

Into this environment steps a well-meaning leader who announces, we’re going to begin using Slack – or Asana or Monday.com or some other platform designed to help the flow of work and communication – and the IC’s heart sinks. The new app or platform might be great, but, the IC thinks, it is one more system to interface with, and I haven’t even come close to understanding the existing Systems, Meetings, Processes, Reporting, Workflow, etc. or how I fit into this puzzle. It’s as if they have been captured by the Borg, aliens in Star Trek who coopt all technologies they encounter and turn individual beings into drones through a process called “assimilation.” “We are BORG (short for cyborg) you will be assimilated”

Complexity and Invisible Workflows – With the digitization and automation of so much work, the actual flow of work is hard for ICs to see or even imagine, these workflows have become hidden from view more and more as we link this system to that system. However, this does not mean the IC is excluded, and an understanding of what, when and where one participates in a Workflow is more important than ever to improve and refine an organization.

 

Without Organizational Cognizance, any new System – and I’m not knocking the random examples above – feels like a fancy to-do list, yet another box to check, another Slogin. I share the following formula and accompanying graphic with my clients to illustrate my point about creeping complexity in organizations.

The first time I saw this arrows diagram describing complexity was in 2007 when Gino Wickman drew it on a whiteboard to describe his first “Leadership Ability,” the Ability to Simplify.

Of course, my sick statistics mind goes into formula creation mode and I think: N, or the number of “Nodes” (interacting entities) squared, minus the number of Nodes equals C, or the level of Complexity.

So, for instance, if there are only two Nodes and two directions for interaction (represented by two arrow tips in the illustration above), the level of Complexity is just two (2² – 2 = 2). As you can see from our graphic, adding one Node, for a total of just three, triples the level of Complexity (from two arrow tips to six), and going from four nodes to five, raises the Complexity level from twelve to twenty.

N² – N = C

Research shows that the number of variables humans can mentally handle while trying to solve a problem – whether that’s baking a pie or closing a sale – is three. In their article “How Many Variables Can Humans Process?” published in the journal Psychological Science, Graeme S. Halford and his coauthors found that juggling four elements is very difficult for people, five nearly impossible.

So, yes, adding that new app, System, mandatory Meeting, etc., however benign the intention, is a big deal. Interestingly, the researchers behind the Psychological Science article found that the subjects in their experiments naturally tried to group like variables, to establish connections, and to break complexity down into navigable chunks. Job titles are an easy example of this – tons of complexity gets shoved into one Pandora’s Box, represented as a word or two on an Org Chart… You get the picture and why the old Org Chart, with its Pandora’s boxes, is going the way of the dinosaur. Humans crave understanding. They want to know where they fit and the ways in which their Nodes, however they’re defined for a given challenge or organization, relate. They want Organizational Cognizance.

The Organizational Cognizance® Model Graph Database Objects

Org Chart to Org Graph Objects
AJT uses Org Graphing software to capture complexity

"When I sat down, faced the reality, and modeled the cost to my company of not bringing new people up to speed using the 14 Point Checklist, I saw it was in the hundreds of thousands.”

- Clay G, CEO

“The really cool thing about using an Org Graph was to get all of our people into the game. Once our Individual Contributors saw how this was something we were doing “For Them” instead of “To Them”, they bought in and the Org Graph bloomed with amazing detail - all supplied by the people who really know what’s going on, amazing.”

- Bryan B, CEO

"Our engagement is up, our teams are more effective, people are able to go directly to the right person for an answer, when we want to change something we can SEE who it will impact and get them involved. All of this was hidden in the past behind layers of folders and files, text and outlines, never in simple diagrams and pictures, very powerful.”

- David, CEO

"The different ways to visualize the same thing really is amazing, sometimes I would look at what we created via a Hierarchical view and it was just scrambled eggs, then I clicked on Symmetrical View, and think, ah ha there it is, then we drill down with the Marquee Zoom tool and it just becomes clear, truly amazing.”

- Sara, Aqua Tots

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