What if people are not your most important asset?

In devoting our time to the efficient working order of the parts, we forget that all firms are just webs of relationships between people.

We use the machine metaphor to help understand how firms work. In our public and business discourse, we happily embrace it to describe the world and shape our decisions.

We are fixing, tunning, pushing, regulating, or designing the economic ‘machine’. We need to push the buttons in the correct order and pull the right levers in the right way to get the effect we want.

Yet, this mechanistic worldview can feel sterile and soulless, as though we're draining the life out of our work. Let's set aside our wrenches and oils and explore an alternative perspective: what if organisations were viewed as organic entities? This shift could spark fresh ways of thinking and acting.

This is challenging. The machine metaphor is pervasive. It breaks the organisation into its components – gears, valves, pumps, and springs. Leaders, managers, and workers dedicate their time to cataloguing, inspecting, and polishing the machine’s parts. The work is close and detailed. The objective is to improve efficiency. Rarely do we step back to witness the whole organism thriving in its environment.

In devoting our time to the efficient working order of the parts, we forget that all firms are just webs of relationships between people, and people are weirdly complex, particularly in groups. People defy efficiency in operation. They are just too messy.

The modern version of the machine metaphor is Artificial Intelligence (AI). Interestingly, AI moves us from studying parts to understanding connections, layers, and learning. It is a step closer to an organic view.

However, the machine view persists within AI. At its beating core, the mantra is ‘if we automate our processes and outsource lower-level decisions, then everything will be better—more efficient’.

As we continue down this path, profound philosophical questions arise about the nature of organisation, people, and work. The intersection of AI and art is fascinating, raising inquiries into beauty, intent, and value.

An organic view makes us think less about parts and efficiency and more about purpose and identity. This process should start with finding the right question rather than the correct method.

Organically, firms are faced with two questions, the first about purpose and the second about identity.

»    What should we make or buy?

»    What should we own that we should never trust anybody else?

The first question is essential but more straightforward; the second requires closer attention.

For example, the often-used phrase ‘people are our greatest asset’ suggests firms should always own the workforce. Yet, workforce mobility doesn't fatally disrupt performance. Do firms genuinely need to "own" people to thrive?

What remains pivotal to an organisation's identity if people aren't the central asset? Tangible intangibles surface—our actions to attract and select individuals become more critical than ownership.

Consider culture—expressed and sustained through administrative systems—as a cornerstone asset. Effective administration fosters confidence and trust, arguably more critical than market offerings or professional capabilities.

Our vital assets may not be tangible products or leadership skills but the management systems that nurture and deploy capabilities to solve client problems effectively.

This paradigm challenges conventional thinking, where investments in administrative and management systems are often overlooked. Yet, they are the lifeblood of any business, generating culture, capability, and performance.

By reframing these investments as capability generators rather than mere part replacements, we unlock potential without the furrowed brows of traditional cost analysis.

The fixation on physical parts has led us astray; the essence lies in intangible effects—culture, capability, and performance. 

Digital technology and AI are changing every conceivable aspect of business operations and public service. In responding to these changes, we must let go of outdated metaphors.

These technologies are based on characteristics that lead to a more organic organisational design. For example, digital layering transforms organisational systems through continual combination and recombination in a way impossible with physical assets. This transformation augments people's ability to conceive and generate new and valuable activities that can be quickly distributed to produce further innovation. All this activity opens up new connections, partnerships, and possibilities.

Leaders and managers are trapped inside an organisational machine metaphor. where they are comfortable and safe. Today, we are grappling with pervasive automation. In essence, we are making the existing machine go faster. Historically, the real benefits of technology have come from augmenting human-machine systems that create new capabilities.

Leadership, management, and organisational design must quickly embrace layering, augmentation, and connection as operating principles rather than replacing the existing machine parts through automation.