How to Upgrade the Industrial Organization to the Age of Ideas?

Do you suffer from corporate obedience? Are you wealthier but not healthier and happier than your parents? Does your employer demand your “all” without guaranteeing a continuity of employment in return? Are you stressed, anxious, disengaged or frustrated?
Fair chance that you are trapped in an old-style steam-engine organization, custom-built to suppress collaborating, problem-solving, innovating and socializing. Perfect for repetitive tasks, standardization, and efficiency. Disastrous for inspiration, purpose, trust, innovation and making a difference to the greater good. So, what can you do to upgrade your industrial organization?

Mark Powell and Jonathan Gifford wrote the book “My Steam Engine is Broken – taking the organization from the industrial era to the age of ideas.” It aligns with Gary Hamel’s work and Frederic Laloux’s Reinventing Organizations. More and more people are waking up to the poignant fact that our workplaces are so old-fashioned that they don’t serve their purpose anymore. Modern organizations need to be innovative and agile, but many are not.

But where do you start to change? The organization as a whole is a daunting job to change. Powell and Gifford propose to transform the steam engine bit by bit by tackling the ten paradoxes that steam-engine organizations do that actively prevent them from achieving their goals while they think they do a good job.

Let go of control

control and hierarchyFirst, we must learn to let go because control is killing the organization. Moreover, control is an illusion. Most of us crave control to acquire a sense of safety: “The world is normal, people are predictable, and there are rules to obey.” But the reality is complex and complete control does not exist. Trying to control people is based on a lack of trust: basically, there’s doubt that they are knowing, willing and able to do the right thing. Control diminishes motivation almost immediately. That’s why Ricardo Semler tore up a “phonebook” of procedures when he took over Semco. He argued that “rules and regulations divert attention from a company’s objectives, provide a false sense of security for executives and create work for bean-counters.” (Quote from his book: Maverick).
The efficiency of bean-counters will not change the world, but our brilliant ideas might. Innovation is the driving force of successful organizations.

But even though there seems to be a consensus that hierarchical control is not the best way to run an organization anymore, not many organizations are letting go of control. It is not easy to copy the agile start-ups that use the network organization concept and expect employees to be self-motivated, working in projects and managing themselves.

At Valve Corporation, there is no management Click To Tweet

One interesting example is the video game developer Valve Corporation. At Valve, there is no management, and no one gets fired for making a mistake. The handbook helps new recruits with “A fearless adventure in knowing what to do when no one’s there telling you what to do”.

As Gifford and Powell say: “Leaders need to identify the very few things that really matter – the things that will allow the organization fulfill its fundamental purpose. They need to ensure that the organization is aligned with these goals. And they need to let go.”

“The future is unknown. Which means that the best route to the organization’s desired future is also unknown. This optimal route can only be discovered by the organization as a whole, through experimentation and debate.”

That is a crucial truth that many people seem to overlook: the illusion that the strategic plan can be implemented step by step as it was written down. Welcome to reality. This is not science. You can’t completely control, calculate and plan and blind-test alternatives. This is an art. You try something in reality, you get a response, you hope you’ve identified the factors that made the difference (in that response), and you try to adjust or continue your approach. It is not a paper exercise. It is interacting with reality. It is “real”.

Measure what matters

Measure what mattersHence Gifford’s and Powell’s second recommendation: beware of what you measure. What gets measured is what gets done – but do we measure the right things? They observe an obsession with short-term metrics that may be useful, but that also can be manipulated or stand in the way of the long-term goals and vision. Ex-management consultant Karen Phelan tells the authors: “Businesses love measurement because they mistakenly believe that numbers are real data. It’s like confusing a map with the terrain. Instead of watching where you’re going and what you’re stepping on, you’ve got your face in the map. It is a representation of what is, and the map can’t give you the fuller picture of the terrain you’re in.”
So, let’s go back to our senses – away from our spreadsheets. The most important things are intangible. What matters is “the pulse of the project”. Try to work with a lofty, long-term, intangible goal and assess your progress towards it.

Let’s go back to our senses - away from our spreadsheets Click To Tweet

Then there’s efficiency. It’s important, but short-term efficiencies can destroy long-term potential – and quite often may damage human energy and motivation and stifle opportunities. Keep in mind: the cheapest solution is not necessarily the best, and people are not resources. They are the organization…

The Innovation Committee

Do you know the Innovation committee? Innovation is inherently risky and different. It is the opposite of control, measurement and efficiency. Nevertheless, organizations try to facilitate and control it through the innovation committee. But innovation cannot be managed. Real innovation comes from Mavericks, geniuses, weirdoes and normal people who have space to think different and experiment. People who dare to dissent and dare to disrupt. So, how do we stir up innovation? Or change, or even “only” improvement? Not by installing a committee. But by encouraging diversity of ideas, taking away restraints, encouraging dissent, experiment, mistakes, creativity, and debate. Build small teams with trust and a shared purpose and above all, improvise, play and rehearse.

Innovation comes from Mavericks, and normal people with space to think Click To Tweet

Communication may be a corny topic – but crucial. We are linked by technology 24/7 but communicate less meaningfully than before. Steam-engine organizations love email for its efficiency (simply copy everyone on your message) and tedious meetings, but these platforms don’t enhance real dialog. Real communication happens within communities. So, focus on teams instead and let them interact as much as they want and need. Gossip and chat matter, too! Last but not least, communicate with the organization’s unconscious. Yes, you read that correctly. You can do a “constellation” or use other techniques with large and small groups that help reveal what is unconsciously known about the system but did not surface to date.

The office as a prison

prison organizationI personally was hesitant to sign my job contract, back in 1990. The huge commitment scared me. I obliged to be in that gray concrete building from 8.30 to 5.30, five days a week. It felt like going to prison and giving up my freedom. I worked at a steam-engine organization. Attendance at the workplace was compulsory for the duration of every working day. We sat in separate offices. Socialization was only acceptable during the breaks. We were sometimes required to take work back home, but we could not bring home matters to work. Simple as that.

Is attendance at your workplace compulsory during the working day? Click To Tweet

But even in 2015, exploration, reflection, purposeful social interaction, down-time, initiative, or the development of group intelligence is not encouraged at work. Organizations may explore home-working, virtual meetings, and digital forums, but they still want a place to call home. The workplace where you must be seen during working hours.
According to Gifford and Powell, buildings should encourage human energy, chance encounters, social interaction, spontaneous gatherings, happy accidents and the constant flow of ideas. I couldn’t agree more.

Try Anarchy – not Democracy

Many business thinkers have suggested that organizations need democracy. What they mean is: we should try to involve everyone more in the decision-making process. Gifford and Powell see this as a cosmetic exercise for steam-engines. “The risk that democracy becomes merely the dictatorship of the majority is very real in organizations.” That is because we lack the mitigating effect of the media, independent citizens, and so on. Is democracy the best way to innovation and agile organizations where we like to work?
What we need is anarchy, not democracy. Anarchy means the absence of government. It does not mean chaos (a common misconception). In the absence of governing power, self-organization emerges, and it can work very well (also see Frederic Laloux in issue 13). What you need is autonomous people who are confident and skilled, and who know how to engage in dialog to reach some consensus.

In the absence of governing power, self-organization emerges Click To Tweet

The book shares the example of General Electrics Aviation that has been successfully experimenting with self-organization for over 30 years. They call it “teaming.” The results in terms of productivity, quality, reduced cost, employee satisfaction, and flexibility were so remarkable that GE decided to roll out “teaming” across all plants in 2010.
There is great evidence to counter objections such as “This only works in small start-ups that provide services or technological gadgets, but not with manufacturing and serious business.” Even the possible disadvantage of no longer ordering resources in bulk can be outweighed by the flexibility of smaller, responsive units that keep less inventory (as Ricardo Semler found out).

Gifford and Powell explain: “With self-organization, there is no such divisive moment (when you vote one solution wins the vote, and the others are disappointed). A solution is tried out, and if it doesn’t work, we regroup. No decision has been made that now must be unmade by a show of hands. We try a different route, a new set of leaders emerge. We fail or succeed. If we fail again, we try something else.”

Emergent, shared, leadership

jazz leadershipWhich brings them to consider leadership. Leaders must give the organization purpose and set the tone. Leaders create the space in which others can contribute to the shared purpose and develop leadership as well. Modern leadership is shared, collective leadership that starts with the leadership of self (autonomy, self-organization) and includes leading others when needed, preferably by example. This is emergent leadership.
In new organizations, there’s nothing wrong with creating an organization full of leaders. In the old-fashioned hierarchy leadership is scarce, now it is abundant. You can lead in your own area, and follow others in a different role, and so on.

Jazz Leadership: take on different roles at different times Click To Tweet

Mark Powell calls it jazz leadership. “Different people take on different roles at different times, like a jazz ensemble. A jazz group does not have a conductor, unlike an orchestra. Leadership moves around. The singer may be in charge, and then the saxophonist, next the drummer, and so on. The group moves people around. They have to have amazing trust in each other. Their egos must be big enough to be good enough at what they do but in check. They must take great pleasure in enabling others to shine as well. They share the power of leadership.”

New leaders are emotionally intelligent and need to be authentic. Jonathan Stebbings tells the authors: “When I have permission to be a human being as a leader, I don’t have to be perfect which means I don’t have to wear this front, which means I can connect with people more deeply. A lot of (my work) is shedding the armor.”
The strong hero leader is dead. Long live the emergent, role-sharing leader.


Next, Powell and Gifford suggest organizing like a network. That is the true nature of organizations when you look behind the official organizational chart. Networks are organic, dynamic and systemic. People are the nodes that connect and organizations must enhance networking instead of limiting it (by excluding people, isolating them in separate offices, separate meetings, cascading information down the pyramid, etc.). All employees must learn the rules of networking (also see Adam Grant’s Givers and Takers in issue 7).
Bring something to the party. Make yourself available. Access the network and keep a positive balance of trade. And, remember: new ideas tend to come from the periphery of a network, or, the “weak ties”. That’s why organizations need to open up and embrace: diversity of ideas.

As change accelerates, diversity is not luxury: it’s survival – Gary Hamel Click To Tweet


Evolution (of ideas) needs diversity. Monocultures can be dangerous for survival. What can help you survive? Adaptation. That’s why you need different people, chance encounters, and serendipity. The organization is a network and a complex ecosystem. Modern organizations thrive on increasing variation: that stirs innovations and agility. Like Gary Hamel said: “As change accelerates, investing in diversity is not a luxury: it’s a survival strategy.” Organizations must open the gene-pool of ideas and managers should “not marry their cousins.” That can be a challenge because we tend to like (and hire) people who are like us. This is also why a strong company culture often hinders when it is necessary to change. People copy each other and thus stay stuck. A “loose culture” that is less outspoken can be easier to adapt. A strong culture that fosters dissent, debate, critical thinking, innovation, and change, on the other hand, can be a great asset in my experience.

So, how do we upgrade the steam-engine organization to the 21st century? Take one idea at a time and play with it. Each of those ten topics can be your first step to traveling towards the age of ideas.

  • Which is your first step? Control is at the heart of the steam-engine.
  • Can you do something about measurement, efficiency, innovation, communication, physicality, democracy, leadership, networking or diversity? You will find ideas and practical examples in the book!

By the way, how “steam-engined” is your workplace? Take the survey.

Check out: My Steam Engine is Broken – taking the organization from the industrial era to the age of ideas, by Mark Powell and Jonathan Gifford

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Marcella Bremer is an author and culture & change consultant. She co-founded this blog and

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