What are the benefits of a project-based organization?

Expiring decisions

Tomas Barazza

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All illustrations in the article are by María Medem

— What does an organization look like where there is an expiration date set for everything? An enterprise that follows these approaches is not simple or suited for everyone, but it might just be the workplace of the future.

These days, everybody is talking about agile organizations, and many are experimenting with models inspired by "agile" principles, introducing internal teams organized as "tribes" and "squads," copying businesses like Spotify. This is guided by the illusion that adopting these methodologies is enough to become fast and successful. What is often not taken into account is that the need to be fast implies giving up control of everything. Mario Andretti, the famous ‘70s Formula One race car driver, expressed the point well when he said: "If everything seems under control, you're just not going fast enough.” And when we don't have everything under control, making decisions and changing is scary.

But why are we so afraid of change? It's a trivial question, and deep inside we believe that we know what's stopping us from making decisions that involve some kind of transformation. It’s the fear of making mistakes that frightens us and makes us hesitate when we have to make a choice. It's fear of judgment that's holding us back. Is that all? Are we only afraid of losing face? Why?


In the past, when typing, making mistakes was a big hassle because you had to correct by hand or even retype the whole page. Nowadays, thanks to the undo function, we can write without thinking about it too much, and retrace our steps by simply pressing a key combination (control+Z) to delete the error and rewrite the sentence correctly. But most of the choices we are called upon to make don't have an undo function, and that makes everything more complicated. Partially or entirely irreversible choices are the most thorny ones because they raise endless doubts, and they force us to make interminable analyses and to go through lengthy decision-making processes. This situation is true for people and applies, all the more so, to organizations where people make decisions on form and structure. The difficulty of making the decision often depends on how irreversible it is. 

Assigning new responsibilities, redesigning processes, moving resources and power centers, are all decisions that profoundly create or modify an organizational structure, to the point that it is no longer easy or painless to backtrack if the choice does not work as expected. And the possibility that the choice may somehow be wrong is much more likely than we think. It is not only a matter of committing an error of judgment, but also of not reasonably predicting the developments of a situation, and expecting a solution to work forever. But in an organization, processes depend on context, and it’s unrealistic to think that the same person should always interpret and face new challenges. Context, motivation, and complexity change over time, and the right people for a certain stage may not be the best to handle the next stage.

Wouldn't it be easier if decisions had effects with time limits? If they had a “best before” date, or an expiration date, like yogurt? The result would be an organization where choices, responsibilities, assignments, and processes would be created to solve problems or seize opportunities that exist at the time we make decisions that we know could later change and require drastic adjustments. This is why everything should have a "best before" date or an expiration, upon which we could reset decisions, and benefit from re-assessing the suitability of the choices we have made, to confirm, fine-tune or radically change them. The expiry date would be an enabler of a mindset oriented towards prototyping and iterations.

But planning times to critically assess choices and decide whether to continue with them as is, or change them, does not mean that everything should end on an expiration date. Just as we do with yogurt: if we like it, we can buy it and eat it again before its expiration date; likewise we can confirm what works convincingly, and what we continue to find sensible. But still, this decision is deliberate and not inertial. The general principle is that everything must come to an end. 

But what could possibly be the shape of an organization that has an expiration date set for everything? What would a “Yogurt Organization” look like? First of all, an expiry date could have two levels: one for responsibilities, and the other for structure. Setting an expiry date on responsibilities means assigning tasks with start dates, objectives, resources, and end dates for mandates. Defining a deadline for structure involves an awareness that an organization makes sense within a given context that is continually changing. In other words, it means understanding that since processes and the distribution of responsibilities can vary over time, we must challenge them frequently. Clearly, having an expiration date for responsibilities makes it easier and smoother to adjust the organization's structure, so that it can be reassessed with each change of responsibility, and confirmed or adjusted without significant shock.

At first glance, defining a universal model for an organization’s operating system based on these principles makes no sense, since context and form continue to change. However, a real, functional implementation of a Yogurt Organization is worth examining. How would processes work and decisions be made in such a fluid organization?

Let's imagine a situation that is common at many companies: On the one hand, there is a need to explore new knowledge and technologies to seize opportunities sooner and better than others; on the other, there is a need to create a highly-attractive work environment so the best people can combine their diverse experiences, skills, interests, and passions. How can a Yogurt Organization address these challenges and with what processes and approaches?



Project-based and without an organizational chart

Within a Yogurt Organization, everything, every single task, from the smallest to the largest, is treated as a project. Of course, there can be different types of projects—internal, external, or R&D — but the logic to apply is always the same: maximum freedom for the project manager to define a budget, choose a team, assess what to do internally and externally, and negotiate independently with suppliers and customers.

Benefits of a project-based organization are that it has specific objectives and the resources to achieve them, but above all, it has a beginning and an end — a clear expiry date, on which the team and responsibilities dissolve.

Crews continually exploring boundaries within time-limited missions

In a Yogurt Organization, research and development are vital to staying up to date about the newest and most effective fields and methods. To define missions, every year a team is elected and tasked with choosing which proposals — among those that anyone can submit — deserve to be pursued by allocating adequate time and resources.

Distributed and time-limited governance

Thanks to its non-traditional structure, a Yogurt Organization attracts talent and chooses the right people without having to invent new boxes to put them in, or free some up for new arrivals.

This doesn’t mean that there is no need to manage certain areas. Areas like business development, offering, controlling, skills development, internal and external communications, knowledge management, and hiring would have one-year mandates for submitting projects, with investment and resource management plans. When the expiry date comes, employees can apply or change their fields, or hand over the baton to other colleagues who present projects that are considered more compelling. At each cycle, responsibilities and formats can be reviewed for a single manager or a small team, and the areas in which to distribute governance and define boundaries of responsibility.

Personal development left to individual’s initiative

An organization that follows these approaches is not simple or suited for everyone. In particular, two aspects are essential in a Yogurt Organization: self-motivation and the ability to be fully part of a team of people bound by trust. Not only do you have to appreciate its purpose, but you also need enthusiasm to be part of it.

This approach requires strong self-determination: to imagine a personal growth program and attempt to implement it. Without people who manage people, there are no direct discussions about these issues with one's boss, and it is, therefore, necessary to establish an alternative figure to perform this function: a sponsor. In Yogurt Organizations, people choose a sponsor with whom to focus on their growth path, and define objectives to achieve during the year, establishing suitable metrics and targets (OKR or Objectives and Key Results) every quarter. Here, time even plays on two levels: The sponsor, chosen as a figure capable of conveying inspiration and challenges, can be changed at any time, while quarterly objectives offer the possibility of quickly correcting an action. Targets and metrics don't follow the classic MBO (Management by Objectives) system: There are no rewards associated with achieving or exceeding individual objectives since Yogurt Organizations prefer team-players to soloists competing with each other in a zero-sum game. Instead, objectives provide direction, substance, and traceability to the desired path to reflect progress.



Legitimizing the assessment process

Abolishing MBOs does not imply discontinuing recognition: wage increases, bonuses, and promotions are key elements to boost commitment and quality. However, the process used to define them is different from traditional models. In Yogurt Organizations, performance is interpreted and rewarded according to the contribution that individual’s work has made to the entire team, and the compensation process is designed accordingly. It starts with the sponsor, who, at the end of the year, collects feedback about how people have worked on projects. Afterward, sponsors add their personal observations to their colleagues' opinions, and create a proposal for remuneration, bonuses, and possible promotions.

The sponsors' final proposals are sent to a small board that is responsible for evaluating and validating them. This board is elected once a year and remains in office for a month, just long enough to complete the evaluation cycle. By the end of the year, the sponsor completes the process by informing sponsees of any raises and bonuses. 

Real-time and transparent information

In an agile organization, every element has an expiration date. Problems and situations also require distributed, coordinated, and prompt decisions. This is not compatible with traditional management systems, which require lengthy analysis to provide a framework for decision-making. In a Yogurt Organization, information must be real-time, always accessible, and transparent to everyone. Team members who share a vision, who trust each other, and have access to the same data, will end up making correct and aligned decisions most of the time. In this case, transparency and accessibility become a key coordination mechanism.

But is it really so simple? And is it sufficient to make responsibilities expire and redefine them periodically to become an agile organization? Of course not. The point is not only about who does tasks but also about how those tasks are done and why an organization exists. Frequently reviewing the "who" also helps to relax the "how.”

And what about the "why"? Why does an organization exist? What's its purpose? Does that have to expire all the time, too? I don't think so. The "why," the purpose, together with trust, are the foundations of it all, and must provide direction. They are the essential elements that enable us to act even without detailed planning. The purpose gives meaning to who we are and why we exist as an organization. Trust defines the basis for operating a team that works with these approaches: namely that you trust your colleagues’ work; that you trust the ethics of your company; and that you trust others to consider you a fundamental part of the project regardless of lofty titles and resounding responsibilities. Those may no longer exist or may expire, but not purpose and trust.

WHO WROTE THIS?

Tomas Barazza
Tomas Barazza

Strategy & Innovation Culture at H-FARM and Founder of Wethod.

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