Coming Down the Mountain

Good morning!

At the Uncertainty Project, we explore models and techniques for managing uncertainty, decision making, and strategy. Every week we package up our learnings and share them with the 2,000+ leaders like you that read this newsletter!

We hear it all the time:

• “Things are different here…”

• “One-size-fits-all doesn’t work…”

• “They think they’re a snowflake…”

• “It depends...”

The uniqueness of our organizations - or the uniqueness of the identities of our organizations - makes it very difficult to generalize about improvement, about solutions, and about successful ways to operate.

But our organizations don’t arrive fully formed. Their unique characteristics develop over time, through a series of choices. Some choices are explicit, and directly build the culture, while many other choices “just happen”, yet can also establish cultural norms.

Once developed, these characteristics can ossify. They can become entrenched. Culture, attitudes, and behaviors are hard to change, once they set in - especially when they’ve led to some success.

But if we reflect back, our organizational culture could have developed into something altogether different. Our organization’s cultural development charted a path across a possibility space, where different paths lead to different identities. Movement along this path was punctuated by a series of decisions - the “choices of fate” that set the mold for the organization.

This path of development, for organizational culture, is what we will explore here.

In Steve Elliott’s new book, “The Decisive Company”, he compares organizational culture to DNA:

Your Organizational DNA is your company’s identity—it defines how you compete, collaborate, and grow. 

It’s built on five essential elements:

• Structure: How teams are organized and decisions flow.

• Incentives: What motivates behavior and drives alignment.

• Knowledge Management: How information moves, is shared, and becomes actionable.

• Decision Rights: Who decides, who owns, and who acts.

• Ways of Working: The habits, processes, and systems that bring plans to life.

These essential elements are an example of what complexity scholar Alicia Juarrero calls context-independent constraints. They end up defining the company’s identity, but indirectly.

In cellular biology, the idea of constraints has helped scientists describe the development of a cell, in a field called “epigenetics”. In 1957, Conrad Waddington introduced the concept of an epigenetic landscape to represent the process of cellular “decision-making” during development.

In these Waddington Landscapes, the ball represents the cell, facing a developmental sequence. The hills and valleys are the context-independent constraints that guide the “choices of fate”, by making it easier (or harder) to take particular paths down the mountain. The valleys at the bottom of the mountain represent the different, unique identities that the cell can become, with deeper valleys suggesting a higher probability that the cell will have that identity.

The shape of the hills (aka “hillocks”) and valleys (aka “hollows”) create a probabilistic possibility space, for development. These constraints are defined by the DNA of the cell; they are the “inherited constraints of a species’ possibility space”. As Juarrero explains, “Hillocks are constraints that establish barriers to energy and information flow; hollows facilitate energy flow.”

The path taken by the ball, then, “represents the series of ‘either/or’ fate choices made by a developing cell.” [Battacharya, Zhang, Andersen, “A deterministic map of Waddington's epigenetic landscape for cell fate specification”]

The height of the hills and depth of the valleys suggest the relative probability that a “ball” (i.e. developing cell, or organization) will have a given identity. They also suggest that an initial decision can make it more or less likely to choose a particular option in a subsequent decision.

When the ball reaches the bottom, it has established its identity. For some identities, those “choices of fate” have truly sealed their fate - the valley is deep and the hills to adjacent identities are tall. But other identities might have smaller barriers to lateral movement (i.e. barriers to change to other identities). 

Let’s try taking this visual metaphor from biology, and apply it to the development of organizations, with a parallel concept of Organizational DNA:

Like the cells that Waddington studied, organizations also have a unity of type. We can build from Ron Westrum’s Typology of Organizational Cultures to propose a set of unique organizational cultural identities that could take shape in (any part of) a company: [Note: these are just representative, not intended to be a complete or definitive list. For example, check out this great typology of organizations from Henry Mintzberg.]

• Entrepreneurial culture - managed independence of decoupled, empowered teams, often somewhat unaligned

• “Founder mode” culture - hands-on management, centralized control, leadership in the details

• Power-oriented culture - characterized by large amounts of fear and threat (Westrum’s Pathological type)

• Business-oriented culture - focused on customers, sales, revenue and “making the numbers”

• Rule-oriented culture - focused around departments, often functional (Westrum’s Bureaucratic type)

• Engineering-oriented culture - focused on solutions, with emphasis on functionality and quality 

• Performance-oriented culture - focused on the global mission and achievement of goals (Westrum’s Generative type)

In a Waddington Landscape, these would be modeled as the unique identities across the bottom of the hill.

A young organization sits, like the ball, at the top of the landscape, full of potential, but not fully formed. This “potential” can also be thought of as potential energy, with the ball sitting at the peak of the hill, ready to roll from its initial conditions to its more developed self. 

The landscape presents the “either-or” choices, driven by Organizational DNA, with each choice (from each decision) presented as a valley, on the slope of the hill:

• Org Structure: Should we create a hierarchical structure, or more flat?

• Teaming: Should we form product teams? Functional teams? Use Team Topologies?

• Decision Rights: Should we fully empower the teams? Decentralize some key decisions? Occasionally delegate some decisions? Or centralize decision making?

• Incentives: How will bonuses be structured? What behaviors will be rewarded with promotions? What other rewards are offered?

• Knowledge Management: Do we make all information transparent across the organization? How do we set access rights? Do we build a central data repository?

• Ways of Working: What operational outcomes should we emphasize, when choosing the practices and models within and across our teams?

Development follows a path that seeks to conserve energy. It “knows” that climbing hills takes more energy than just rolling down through a wide valley. And the ball gains momentum: choices made near the top make some subsequent choices (at mid-mountain) either more likely or less likely.

Here’s a hypothetic example, of a trip down the mountain, for the landscape shown above:

1. A leader of a business unit decides to create a hierarchical org structure, anticipating 3 levels for the 500 people in the unit. They opt for this over a flatter structure.

2. The leader builds a staff of functional leaders, who each lead a set of teams that execute a specific function, and drives projects to improve their effectiveness. They opt for this over using a “product model”.

3. The leader recognizes that centralizing decision making will make the organization slower, but is not comfortable decentralizing decision rights to the functions, or to empowered teams. They choose to delegate some decisions, to retain influence over key decisions.

4. The leader knows from past experience that setting incentives against local performance can create local optima and inter-staff conflict, so they build an incentive plan anchored to business-wide objectives and targets instead.

5. The choice of incentives drives a need for better visibility into the business-wide objectives, so knowledge management systems are designed to flow information across the organization, with links to team-level work execution.

6. The need to understand how work contributes to objectives drives better practices around planning and goal management, with an emphasis on finding repeatable, scalable processes.

Another good example of this is how, in Westrum’s typology, some initial choices about culture will influence how information flows through the organization. Here’s more on Westrum’s three types of organizational culture and what he says about Knowledge Management in particular:

Westrum had been researching human factors in system safety, particularly in the context of accidents in technological domains that were highly complex and risky, such as aviation and healthcare. In 1988, he developed a typology of organizational cultures:

• Pathological (power-oriented) organizations are characterized by large amounts of fear and threat. People often hoard information or withhold it for political reasons, or distort it to make themselves look better.

• Bureaucratic (rule-oriented) organizations protect departments. Those in the department want to maintain their “turf,” insist on their own rules, and generally do things by the book—their book.

• Generative (performance-oriented) organizations focus on the mission. How do we accomplish our goal? Everything is subordinated to good performance, to doing what we are supposed to do.

Westrum’s further insight was that the organizational culture predicts the way information flows through an organization. Westrum provides three characteristics of good information:

1. It provides answers to the questions that the receiver needs answered.

2. It is timely.

3. It is presented in such a way that it can be effectively used by the receiver.

[Excerpt from: “Westrum’s Organization Model in Tech Orgs” - IT Revolution]

You can imagine how these “choices of fate” around organizational structure, decision rights, and incentives will shape the way information gets shared in an organization, right? (Maybe you don’t even need to imagine.)

Complexity scholars like Juarrero stress how these context-independent constraints (hills and valleys) differ from context-dependent constraints (other things encountered on the path down, possibly including other independent “balls”):

So the path down the hill moves through development from a “pluripotent state” (multiple potential outcomes) to a “committed state” (one that will require energy to move out of). It’s about visualizing the trajectories leading to the attractors, or stable steady states, which in biology are the gene networks that regulate cell fate.

The Waddington Landscape visual metaphor can also help us think about change.

The shape of the valleys at the bottom of the hill suggest how difficult it will be to change from a given committed state to an adjacent state. Think about it: Once you settle into a hollow, it’s hard to imagine being anything else. There are no low-energy/ high-information-flow paths to reach adjacent, differentiated states (identities).

Here is a visual of two different paths (B and C) that move from a committed state to another alternative identity (i.e. different location across the bottom). Note how both require significant energy to get there:

Moving up the hill, to then move back down (“Pluripotent reprogramming”) is a bit like the concept of unlearning, or going back to first principles, in order to redevelop into something different. “Direct conversion”, on the other hand, demands more energy, and does not revisit the recent choices that led to the first identity. [To me, this sounds a lot like what it feels like to drive a process change without exploring the principles that have formed the current culture: it exerts a lot of energy, but produces only superficial results.]

So a Waddington Landscape might serve as a useful visual metaphor to describe the development of an organizational culture. We can talk about how “Organizational DNA” shapes the landscape, and how leaders make “choices of fate” to come down the hill and settle into a unique identity. Once leadership burns off this potential energy, and lands at the bottom, the “ball” has a more difficult time re-inventing itself, i.e. transforming into a different kind of organization.

Those steep hills on the valleys across the bottom can help us explain the stagnation we feel, when trapped under the weight of the status quo.

And Organizational DNA is not just an origin story - it influences behaviors every day:

So when you wonder how your organization became the way it is today, remember that it is a complex system. And complexity theory can help you understand how its development was guided by specific constraints: some context-independent (choices that form organizational DNA) and some context-dependent (the policies and rituals you implement to create an effective coordination dynamic). 

A Waddington Landscape is just a visual metaphor. But the insight it brings can remind us how we got here, and what it might take to get somewhere else.