Aesthetics and insights in an organization chart from the past

Mckinsey Quarterly published an article by history professor Caitlin Rosenthal about the first modern organization chart, and included visuals of the authentic drawings made by Daniel C. McCallum in 1845. McCallum was in charge of the operations in the New York and Erie Railroad, one of the world’s longest rail systems.

While increasing use of the telegraph gave the organization enormous amounts of data, it also added complexity and information overload to the railroad’s operation. There was a need to improve the processes for organizing the newly available operational information, and for acting on it in a timely manner. McCallum crafted a new design for the organization’s structure that reflected his approach to how operations should function. This is considered one of the first data driven organizations, and the beautiful graphics that documents his organizational plan is considered one of the first modern organization charts.

A few things that caught my eye in the article and McCallum’s work(I do recommend reading the full article):

The drawing was inspired by nature, and shaped in the form of a tree: The roots represented the board of directors and the trunk represented McCallum and his chief officers. The five railroad tracks and the personnel operating them were the tree’s branches and leaves. As the author points out, this illustration is very different than today’s static hierarchical pyramids that we are all familiar with. The tree metaphor might lend the chart an artistic and archaic look, however the actual principals it depicts are actually pretty familiar in modern, data driven organizations.

McCallum’s depiction of the organizational pyramid is inverted from what we see in most organization charts: Rather than being a top-down illustration, it is a bottom-up depiction. This is not just for aesthetics - it also means something about the responsibility given to the branches and their personnel. Authority was given to the people who worked at the lines themselves - they possessed the knowledge which was critical to the operations and could use information in real time. Decisions didn’t have to go all the way up to top-leadership (or down, to the trunk and roots, if we go with McCallum’s take). Loops could be closed fast, giving the right people down the line “ownership” of their domain - which is a also modern management approach. The article refers to McCallums approach as a reversal of hierarchy, an interesting concept to consider in modern organizations as well.

In the tree-like organization chart the trunk and roots of the chief officers and the board still matter greatly, as they do in a real tree. They give a foundation and stability with their experience, strategy, and direction - but they do not need to approve the time-critical operational decisions. Together with the decentralization of decision making, McCallum insisted that targeted metrics will be reported to the board of directors. This allowed the board, with its finite capacity, to receive relevant and actionable data. This was supported graphically as information flew through the branches to the bark and reached the roots.

In the case of the New York and Erie Railroad, the novel information technology (the telegraph) allowed for new capabilities and opportunities of increasing the scale of the organization in ways which were not possible before. However, in order to effectively seize this opportunity, the organization itself had to change. And not just that organization, all organizations would have to eventually change in order to effectively deal with the paradigm shift that information technology brought forth.

Nowadays there seem to be numerous changes in the way we work and communicate. There is a great boom of technological innovation, which in turn leads to change in culture, work habits, legislation, as well as in individual and organizational behavior. Like the introduction of the telegraph, some of these changes represent revolutions that could, and possibly should, foundationally change the ways that organizations are structured and how information flows within them. Examining some of these and the reasons why they might lead to paradigm shifts in organizations will be the topic of my next post.

Watching out for toxic leadership in your organization

“A toxic leader is a person who has responsibility over a group of people or an organization, and who abuses the leader–follower relationship by leaving the group or organization in a worse-off condition than when s/he first found them.“ (Source: Wikipedia)

A recent NPR segment focused on the topic of toxic leadership in the US army. The story described research done by David Matsuda, an anthropology professor who tried to understand the high rate of suicide among US soldiers while he was researching local cultures. There were several interesting aspects to this story:

1. The military is an organization where an extreme hierarchical structure and the uncompromising result-oriented goals (to be achieved at any price) may result in life & death consequences. We can think of it as an extreme indicator of behaviors in other organizations that are not as strict, in which toxic leadership might be harder to spot.
2. The complete effect of toxic leaders on their subordinates and teams is not always fully recognized. It is not always as high profile as suicide, but a continuous degradation in individual and team performance. As mentioned in the story by a lieutenant general at the joint forces - wherever there were toxic leaders, no one would take prudent risk, be innovative, or act creatively.
3. The fact that it took an outsider (an anthropology professor, not a soldier) to ask the right questions that would get to the root-cause and reveal a large scale phenomena, one in which toxic commanders abused soldiers who ended up committing suicide

As suggested in the piece, toxic leadership exists in other organizations as well: “The problem of toxic leadership is not confined to the military. It will be a cancer in any social organization that lacks the mechanisms for controlling it.“

In most cases of toxic leadership found in civilian and corporate organizations, it “only” causes people to be miserable, abused, or to simply leave their job and find a new company to work for. Toxic leadership may be challenging to trace or distinguish from other issues, but has a tremendous effect on how teams and whole companies operate, as well as how challenges are faced and goals achieved. It can lead to undesired attrition of good people while the bad apples remain in place and continue spoiling the bunch.

Why is it so tricky to identify toxic leaders?

Today’s fast paced challenges call for super-performance. As a result, people tend to focus on the results and deliverables, and not pay enough attention to the method or the way things get done. Additionally, in the corporate world, the effects of a toxic leader are harder to detect, and symptoms might be attributed to other issues or go unnoticed. Companies should invest in establishing processes that first identify, and then keep toxic leaders at bay.

• Assessments: One of the solutions to identify toxic leaders in the army was to add subordinate evaluations when deciding whether to promote a commander or not. Toxic leaders can behave in a certain way to their commanders and in a different way to their subordinates. In order to assess behavior in a complete manner, the organization should consider all aspects of the work the person is doing as well the feedback of the people who manage, report to, and interact with the individual. This is already a part of many if not most companies’ assessment processes (usually called 360-degree assessments). If your organization is still not not doing this, here’s another reason to start.
  

• Another issue that could lead to toxic leaders going undetected arises when top-leadership that is disconnected from the day-to-day operations. Wise senior leaders understand the importance of staying connected to the people who work at their organizations, and not just to their direct reports. They make an effort to “show their face” around the company, and create opportunities for any employee to interact with them. Employees would hopefully get the message that they can access top leaders whenever is needed.
  
• Finally, not all organization pay attention to creating and promoting a culture with open communication channels all around. Companies need to nurture a culture where any member is able, even expected, to express their opinions and raise concerns across multiple forums and channels. These can include traditional approaches like town-halls, surveys, or discussion forums.

It is important to keep the concept of toxic leadership in mind as we set out to observe and analyze an organization and the social dynamics within it. Thankfully, many of the activities that are important for recognizing the presence of toxic leaders are also good practices in the organization for other reasons as well.