Octopus Organization: Decentralized Decision-Making for Customer Centricity

Key Quotes

"My co author Phil LeBrun and I found working in large organizations helping to advance and transform them and now working with a lot of large companies in our day jobs currently that they essentially still are factories they're based on the models of Frederick Taylor and co a bit of a rusting construct built on standardization specialization control individual performance focus compliance essentially predictable outcomes and the idea of creating efficiency was a way to operate but these models no longer work they're built on a foundation of permission permission to innovate to speak up and they're designed to de risk and be efficient."

Jana Werner argues that traditional organizational models, rooted in 20th-century factory principles, are no longer effective for modern business environments. These models, focused on standardization and control, inherently limit innovation and employee initiative by requiring permission for new ideas and actions. Werner suggests this foundation is too rigid for today's fast-paced world.

"The idea for us is to say you need to move a bit away from command and control because you can't command and control your way to exceptional outcomes through learning new ways of operating and new technology so it's about creating connection about creating agency more than this permission setting culture we currently have and then designing companies that can thrive in the current complexity so a bit from the metal tin man suit to a living organism and the octopus was one that came to mind for many reasons."

Werner explains that the "octopus organization" metaphor signifies a shift from rigid, hierarchical "command and control" structures to a more adaptable, organism-like model. This new approach emphasizes fostering connection and empowering employees with agency, moving away from a culture that requires constant permission. The octopus serves as a visual representation of an organization designed to navigate complexity and achieve exceptional outcomes through learning and adaptation.

"The idea is more about how can you push decisions into the organization to people who are close to the customer who are close to the problem it's about all these amazing people that we hire and then actually tell them what to do instead of tapping into their knowledge and their experience how can you switch them all on so they all come every day to work to say what are the problems we're solving how can i solve them in ever better ways and how can i help advance and adapt my organization so it stays lean."

Werner highlights the importance of decentralizing decision-making to frontline employees who have direct contact with customers and problems. This approach aims to leverage the full knowledge and experience of the workforce, rather than dictating tasks. The goal is to activate employees to proactively solve problems and contribute to the organization's adaptability and efficiency.

"The idea of how do you balance autonomy with alignment the idea is to think about leaders providing the clarity the context of what the challenges are what are the problems worth solving what are the few things that are important to enable people to then go and solve for those things and that creates a mix of having context having clarity of what the few priorities are and giving people the freedom and the space to experiment in that space."

Werner addresses the challenge of balancing employee autonomy with organizational alignment. She proposes that leaders should provide clear context and define the key challenges and priorities. This clarity enables employees to have the freedom and space to experiment and solve problems within defined boundaries, fostering both independent action and collective direction.

"We call this invent and simplify at amazon we have a principle have i consistently looked at how i can do things leaner how i can take out this bureaucracy if i want to start a new project have the mindset of making it smaller because people tend to take up the time and the resource with bigger spaces you make a project longer it will take the time it will require more resources so having a mindset of giving people less time less resource is a way to reduce bureaucracy growing frugality is a way of bureaucracy growing less and giving people the opportunity to cut that down themselves."

Werner explains Amazon's "invent and simplify" principle as a method to combat bureaucracy and encourage efficiency. This involves adopting a mindset of making projects smaller and more focused, thereby reducing the time and resources they consume. Werner suggests that intentionally limiting time and resources for new projects can be a strategy to curb the natural growth of bureaucracy.

"The pig and the chicken walked down the road and the chicken says to the pig shall we open a restaurant together and the pig says yeah sure and what shall we serve and the chicken says well ham and eggs of course and suddenly the pig stops in its tracks and goes you realize i have to be much more committed to that than you and sometimes it takes the audience in the middle of why that is but basically the point we're trying to make there's a difference between those that contribute and those that are really committed and accountable and often in organizations we have lots of chickens who lay their eggs they come to meetings they have opinions they want to be involved they give part sign offs of something but it's really really difficult to find someone who truly owns something end to end and delivering an actual outcome something meaningful and making the necessary decisions to achieve it."

Werner uses the pig and chicken analogy to illustrate the difference between contribution and true commitment and accountability within organizations. She explains that while many employees (chickens) offer opinions and partial support, it is rare to find individuals (pigs) who take full end-to-end ownership of outcomes and make the necessary decisions to achieve them. This highlights a common organizational challenge in finding deeply committed individuals.