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Do you work for a machine or a living company?

Søren Pommer
Last updated on 20/03/2024

Whether top management views the company as a machine or a living organism – a living company – can explain a lot about how they manage and organize. This impacts how business processes are managed in practice.

(editor’s note – this post has been updated from a post from 2012)

Back in 1997 Arie de Geus wrote “The Living Company”. In its foreword, Peter Senge makes a distinction of viewing a company as a machine for making money or a living being. A living company.

Now let’s look at your company in relation to the criteria that Aie de Geus set for the living company. Below I have listed the factors that characterize each dominant view. The primary view guides your top management’s decisions and actions and shapes your culture.

Your company is a machine

If you can recognize most of the following:

  • It has been conceived by its builders to make as much money as possible.
  • Fully controllable by its operators.
  • Created by someone outside of it.
  • Fine-tuned by mechanics (consultants) if it is not running well.
  • Acting as reactions to goals and decisions made by. management.
  • An entity that changes only if somebody changes it.

You work for a living company

If you can recognize most of the following:

  • Something that creates its own purpose
  • Only possible to influence like a teenager, not control like a dog
  • Creating its own ways of working and business processes
  • Setting its own goals and actions
  • Evolving and adapting over time

Which is the dominant view?

Peter Senge believes that almost all of us automatically adopt the machine view. I think this point makes sense to some extent. Many of us have been to a business school where we have learned strategic theories that originate from military thinking. This view is then reinforced via organisational structures, formal reward systems and our official management jargon. We send the signal that we’re fully in control of the management process and being the trustworthy managers that we are.

However, what if the formal and official story of our organisation is that of the machine, whereas reality mostly resembles the company as a living organism? Should we then select and deploy our strategies and our management process to influence the company with the first view in mind or the second?

Living companies are more adaptable

Personally, I think many managers would be more effective and influential if they acknowledged and embraced the living organism perspective. This does not have to imply giving up control completely. It’s just that…

Living companies last longer

Furthermore, empirical research initiated by Shell has proven that Fortune 500 companies “run as machines” historically have had lifespans of 40-50 years. The selection of companies that lived for hundreds of years is more similar to organisms in the sense that they allowed their employees to change ways of working in response to changes in the environment. They were tolerant, open and adaptable. In other words, profit was a symptom of good company health. Not a predictor of it… What is your fundamental belief?

If you need help to embrace the living organism perspective, a quality management tool might be helpful to enhance involvement and change.

Where business processes fit in

Business process management as a discipline originates from scientific management. It is therefore part of the machine as a starting point. Top management designing how everyone should work.

However, if you…

see business processes as as a common language for how you work together in the company.

Gluu’s approach to business processes

Then they have to be owned by the people that know best, close to the frontline and change frequently to reflect learning. With this approach, you are adding some needed structure to the living organism. Common, shared and living business processes can help everyone to run in the same direction. The company becomes too much of an unmanageable organism if everyone works their own way entirely. 

Interested in learning more? Watch me explain why the collaborative management of processes and improvements require a platform such as Gluu’s:

How to Setup Process Improvement for Your Business

Frequently Asked Questions

How exactly can a company shift from being a “machine organization” to a “living company”?

A company can transition from being a “machine organization” to a “living company” by first recognizing that change is vital and necessary. It begins with adopting a new vision, mission, and set of principles that embody the concept of a living company. Emphasizing learning and maturing becomes essential, with the creation of a knowledge-sharing culture where employees are encouraged to enhance their skills constantly. Additionally, company leaders need to demonstrate empathy, fostering a work environment where individuals feel valued, heard, and engaged. In a living company, the focus shifts from maximum production to sustainable development & survival, and that may require redefining profit mechanisms.

What are some practical examples of “living companies” that have adopted these principles successfully?

Some notable examples of living companies that have adopted these principles successfully include Google, Apple, and Amazon. Google focuses on learning and creativity, promoting a workspace fostering innovation and supporting personal growth of its employees. Apple, known for its distinct design approach, emphasizes the importance of culture and constant learning. Amazon practices a customer-centric philosophy, which means they adapt, evolve, and make decisions primarily based on customer needs, a key characteristic of a living company.

How does emphasizes on learning, maturing and survival over profit affect employees’ job satisfaction and overall morale within a living company?

Emphasizing learning, maturing, and survival over profit has a profound impact on employees’ job satisfaction and overall morale in a living company. It promotes a culture of personal growth and development, where employees feel valued beyond their immediate functional roles. Employees feel inspired to learn and grow, increasing their competency levels, job satisfaction, and loyalty towards the organization. When a company values survival, it implies job security and stability, enhancing the overall morale of the workforce. Furthermore, such a focus creates a safe environment where employees are not afraid to take risks, innovate and voice their opinions. This sense of value and respect drives motivation, productivity, and nurtures a happier work environment.

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