Joy-Driven Development (Part 2)

This week’s newsletter brings the key highlights from the 12th episode of the Cyb3rSyn Labs Podcast, featuring Martin Chesbrough. In Part 1 of our conversation, Martin discussed his professional trajectory and set the stage for Open Systems Theory. (OST).

Most executives seek solutions instead of seeking understanding. Hiring “management consulting” firms is basically outsourcing of thinking. Executives developing a new worldview/lens about what organizations are, by changing their mind, is such a rare occurrence.

Martin is one such rare executive, who is now spreading awareness about an important lens - a “open socio-technical systems thinking” view of the organization.

In part 2, we go for a deeper exploration of OST. Read on…

As someone focused on helping senior leaders and founders achieve effectiveness in whatever they do, I found this conversation incredibly insightful. Martin shared his deep knowledge, practical experience, and some fascinating stories that shed light on how OST can offer a different, more effective perspective on organizational design and human motivation.

Martin explained that Open Systems Theory is rooted in systems thinking and is perhaps more accurately known as "open socio-technical systems thinking". At its core, it builds upon the idea of socio-technical systems, which views people and technology as an integrated whole within an organization. What OST adds, critically, is the recognition that this internal system doesn't exist in a vacuum; it's constantly interacting with its broader environment.

A key concept in OST is the environment, which is considered on two levels. The first is the immediate, or micro, environment. This includes the stakeholders and entities the organization interacts with directly, such as customers, suppliers, competitors, and partners. Recognizing this relationship with the outside world is a critical part of OST. The second level is the macro environment. This encompasses broader external factors and disruptions that affect everything like tariffs. An organization, viewed as a socio-technical system, must adapt to both its micro and macro environments to ensure its existence and evolution. We can choose where to draw the system boundary, defining what's inside and what's outside as part of this two-stage environment.

Beyond the system-environment relationship, Martin highlighted the importance of human motivation within OST, drawing on Emery's paper on the six intrinsic motivators. He emphasized the distinction between intrinsic and extrinsic motivation, which many executives completely miss as they blindly follow the organizational “process”.

While extrinsic motivation (like bonuses, promotions or hierarchical control) is often simpler for managers to control, intrinsic motivation is crucial and requires managers to truly connect with the people in their organization. Martin also pointed out that the six motivators correlate strongly with Daniel Pink's works, which is based on self-determination theory.

OST isn't just theory; it provides practical vehicles for application in organizations. Martin described three main vehicles:

Martin introduced two contrasting design principles: DP1 and DP2.

DP1: Represents hierarchy or bureaucracy, the standard in most companies where the boss tells you what to do.

DP2: Represents a generative organization with self-managing teams that set their own objectives and work together to accomplish them.

He highlighted a significant challenge for organizations adopting agile methodologies: they are often structured on DP1 principles but introduce DP2 thinking at the team level. This hybrid structure, mixing predictive, bureaucratic management with self-managing teams, can be a "recipe for disaster". The ideal, though challenging, approach is to convert the entire organization to DP2.

In a DP2 organization, the role of executive teams shifts from micromanagement to focusing on strategy, enabling the organization's direction, synthesizing feedback from lower levels, and environment scouting.

Martin also shared a personal story from his time managing the merger of Nokia and Siemens in Indonesia. This involved massive civil engineering projects to build network infrastructure. He contrasted Siemens' very hierarchical process for rolling out networks across the country with Nokia's more empowered project approach.

In Nokia, project managers were given jobs and resources to be successful rather than being micromanaged remotely. This empowerment allowed Nokia teams to be better at adapting to complex local scenarios, such as getting diesel fuel to generators in remote locations like Borneo. Over time, the Nokia approach proved to have different dynamics, costs, and eventually a lower overall cost, serving as an endorsement of the self-management approach.

It was a truly valuable conversation, highlighting how understanding the system, its environment, the dynamics of interaction, and human motivation can fundamentally shift how we lead and design organizations. I want to thank Martin for his time and incredibly insightful sharing!

Members of the Cyb3rSyn Community can watch/discuss the podcast episode on the www.cyb3rsynlabs.com portal or the mobile app (iOS and Android).

The podcast episode is also available here:

For all premium-tier subscribers, here is a quick list of links to all the books mentioned/referenced in the conversation…