Six simple rules for a more fluid organization Premium

To read the article in full, become Privileged Subscriber or log in

In the face of ever-increasing levels of complexity, leaders are creating organizational mazes that inhibit innovation and demotivate teams. How can you put a stop to this downward spiral? Business Digest presents the “six simple rules” conceived by BCG’s Yves Morieux and Peter Tollman to overcome this problem by supporting individual autonomy while simultaneously promoting collaboration.

Rule No. 1: Understand what people do
The performance of an organization is nothing more than the combination of individual behaviors, decisions, actions, and interactions. The first rule is to undertake a concrete analysis of the goals that employees are trying to achieve, or problems they have to solve, and their resources and constraints.

Rule No. 2: Strengthen the role of “integrators”
Although you do not have to be a manager to be an integrator, the role should lie at the heart of the managerial function. The task for leaders is to reinforce the integration role of managers by giving managers greater autonomy and urging them to rely on sound judgment rather than indicators.

Rule No. 3: Increase the total amount of power
Developing employee autonomy means strengthening their power, defined as the ability to influence the results of others. This power enables people to interpret rules and use their discernment and intelligence rather than simply following processes. The more power employees have, the more they can make the right decisions and the more the company gains in agility.

Rule No. 4: Increase reciprocity
Reciprocity means that individuals or teams acknowledge that they have a mutual interest in cooperating, and that the success of one depends on the success of all. How can you encourage reciprocity? By raising the profile of interdependence so that everyone recognizes that he or she needs collaboration.

Rule No. 5: Visualize the future
This rule consists of boosting the causal link between the present and future. In organizations that have become complicated and blurred, employees no longer feel connected to the consequences of their actions.

Rule No. 6: Reward those who cooperate
Sometimes the nature of work means that feedback can only be given indirectly through processes of evaluation. When this is the case, the authors suggest reframing the issue by looking beyond the usual criteria and focusing on the attitude of corporation. “Leaders should not penalize failure itself,” they argue, “but the failure to help or seek help.”

The example of LEGO
LEGO, the famous Danish toymaker, stood on the verge of bankruptcy in the early 2000s, with the company experiencing losses of over $300,000 a day in 2003 and 2004. The shortfall was caused by a proliferation of activities that resulted in the group losing control of its processes and costs. But a new tone was set when Jorgen Vig Knudstorp took over as CEO in 2004, and LEGO went back to the basics. A decade later, the company has overtaken Mattel as the world’s leading game manufacturer.

Based on Six Simple Rules: How to Manage Complexity without Getting Complicated by Yves Morieux and Peter Tollman (Harvard Business Press, March 2014) and “Ambidexterity: The Art of Thriving in Complex Environments” by Martin Reeves, Knut Haanæs, James Hollingsworth, and Filippo L. Scognamiglio Pasini (BCG Perspectives, February 2013) and the Interview with Martin Georg Jorgensen, product design manager at LEGO (Denmark), August 2014.

Watch the video:

BCG’s Yves Morieux on reducing organization complexity.

The co-author of Six Simple Rules clarifies the concept of simplicity.