Wednesday, April 18, 2012

Principle #4. Goal-Orientation

The principle of Organization Wholeness says that the elements in a system are interdependent and collaborate with each other. But it doesn’t say how exactly they collaborate. In this post I will discuss the 4th automation principle, which states that the collaborations of elements are not chaotic, but follow a specific law--Goal-Orientation.

We already know that an organization is a goal-oriented system. It has goals with elements that collaborate in order to contribute to those goals. Detailed at the upper management levels, organizational goals are broken down into smaller and more concrete sub-goals, and are then propagated to the levels below. The same process then happens again until all goals reach an elementary level and are set to an immediate executor. After that the elementary goals are executed and produce specific results. When these elementary goals are completed, they are composed together and attributed to higher-level goals. Achievement of the higher-level goals then leads to reaching their super-goals and so on.

In this way, reaching the overall organizational goals is based on the cummulative effect of reaching elementary goals at the lowest management levels. Because of this, the biggest objective of upper management levels is to optimally break down goals into subgoals, propagate them to lower levels, track the execution process, and make necessary corrections.

In addition to goals there are many other information flows that circulate in an organization--observations, interpretations, escalations, results. But all that information doesn’t have a value on its own. It is required by the goal reaching process and has to be considered in the context of related goals.

The principle of goal-orientation, as well as the other principles, stands against the gaps in automation. Specifically, though, it targets the gaps in collaboration and alignment between elements and management levels.

Definition: “Most interactions in an organization are driven by goals. Higher-level goals are detailed, broken down into sub-goals, and propagated throughout management levels until they are executed. The outcomes are then composed together and included in the overall achievements of the organization.”

Key points of this definition:

  • Most collaborations in a management system are goal-oriented. In other words, they are targeted towards reaching specific organizational goals.
  • Upper-level goals are broken down into subgoals, and are then propagated through management levels until they become elementary and can be executed.
  • Elementary goals come to executors and are finally acted upon. The execution results are then observed by the upper management levels, composed together, and used to reach higher-level goals.

When using Goal-Orientation:

  • In order for goals to be easily propagated throughout the organization, there must be a formal management structure. Here are two main ways of pushing goals through an organization:
    • Hierarchical management - goals are propagated strictly from upper to lower management levels.
    • Network management - goals can be propagated horizontally at the same management level.
  • Not every organizational structure supports efficient goal-reaching. A specific structure must be chosen and developed to effectively address the goals of an organization.
  • Individual groups and divisions in an organization, besides working toward the overall organizational goals, sometimes have their own local goals. Typically, those local goals exist to maintain the integrity of the group (so-called “internal heat”), but they can bring about extra and unneeded work. Therefore, if a group can be replaced by one super element, which can produce the same overall results, the super element should be implemented. It will bring the effort and resources spent on local and unneeded goals to zero.
  • Substitution of a subsystem by a single “virtual” element allows to simplify system description. That approach is called “recursive decomposition” - a system is broken down into subsystems, the subsystems are broken further down into even smaller subsystems, and so forth...
  • Management that is based on implicit goals has a lot of chaos. It breaks the goal-orientation principle by having goals, actions, and information flows that are not detailed and linked to the overall organizational goals. In order to eliminate this chaos, make explicit goals that are related to the overall aim of the organization.
  • System Manageability is defined as the ability to control actions at lower management levels from higher management levels. When higher-level goals are detailed and propagated to executioners quickly and effectively--leading to desirable results--there will be less chaos in decision making and system manageability will be higher.
  • Management Transparency is defined as the ability to clearly see execution results at any upper management level and the ability to relate those results to set goals. This allows an organization to make necessary corrections and reach goals faster, better, and with less effort. With goal-orientation and open communication, it is easy to reach high levels of transparency.

By keeping an organization goal-oriented, every element of the organization will easily collaborate and communicate with each other.

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