The Open Organization This is a rich, well-prepared, well-researched and well-developed book which will become a seminal and foundational work on the Open Organization. I appreciate the depth and breadth of thought continuity as Philip maintains a focused lens in presenting the tenants, characteristics, realities and possibilities of the Open Organization. I look forward to seeing this work become a relied upon source for those developing and studying the Open Organization. Diane M. Wiater, Regent University, USA and Editor, Journal of Practical Consulting Dr Foster’s book The Open Organization highlights the challenges many 21st century organizations face. Demographics, an aging population, a shrinking workforce, culture, technology, and a world economy are changing the way we engage human capital. In The Open Organization, Dr Foster offers solutions to these pressing challenges and challenges leaders to rethink outdated organizational models. Skip Prichard, President and CEO, OCLC, USA The Open Organization is both an in-depth look at how far we’ve moved from the closed, bureaucratic systems of the past and a manual for how to operate in a world where adaptability isn’t just a competitive advantage…it’s a requirement for survival. David Burkus, Oral Roberts University, USA and author of The Myths of Creativity The Open Organization A New Era of Leadership and Organizational Development PhiLiP A. FOsTEr Maximum Change Inc., Tennessee, USA © Philip A. Foster 2014 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher. Philip A. Foster has asserted his right under the Copyright, Designs and Patents Act, 1988, to be identified as the author of this work. Gower Applied Business Research Our programme provides leaders, practitioners, scholars and researchers with thought provoking, cutting edge books that combine conceptual insights, interdisciplinary rigour and practical relevance in key areas of business and management. Published by Gower Publishing Limited Gower Publishing Company Wey Court East 110 Cherry Street Union Road Suite 3-1 Farnham Burlington, VT 05401-3818 Surrey, GU9 7PT USA England www.gowerpublishing.com British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. ISBN: 978-1-4724-4011-2 (hbk) ISBN: 978-1-4724-4012-9 (ebk – ePDF) ISBN: 978-1-4724-4013-6 (ebk – ePUB) Library of Congress Cataloging-in-Publication Data Foster, Philip A. The open organization : a new era of leadership and organizational development / by Philip A. Foster. pages cm Includes bibliographical references and index. ISBN 978-1-4724-4011-2 (hardback : alk. paper) -- ISBN 978-1-4724-4013-6 (ebook) -- ISBN 978-1-4724-4012-9 (epub) 1. Organizational change. 2. Leadership. I. Title. HD58.8.F686 2014 658.4’06--dc23 2014015798 The Open Organization is a registered trademark of Open Organization, LLC. Open Organization LLC is a wholly owned subsidiary of Maximum Change, Inc. III Printed in the United Kingdom by Henry Ling Limited, at the Dorset Press, Dorchester, DT1 1HD Contents Foreword vii Preface ix Acknowledgments xi Part I FoundatIons oF an Open OrganizatiOn 1 The History of Leadership and Organizational Structures 3 2 The Open Organization Defined 17 3 GitHub: “Creating Awesome”—A Case Study 31 Part II ElEmEnts oF an Open OrganizatiOn 4 The Open Ecosystem 41 5 First Principles 63 6 Communication 81 7 Knowledge Commons 89 8 Leading the Open Organization 97 Part III thE twEnty-F Irst CEntury organIzatIon 9 Cultural Literacy 111 10 Embracing Open in the New Millennia 127 11 Should You Go Open? 139 12 Beyond Organization 3.0 153 References 159 Index 181 www.gowerpublishing.com/ebooks We hope you enjoy this ebook with its interactive features and the wealth of knowledge contained within it. We’d love to keep you informed of other Gower books available to you from your chosen provider. Why not join our monthly email newsletter? It features new books as they are released, links you to hints and tips from our expert authors and highlight free chapters for you to read. To see a sample copy, please go to www.gowerpublishing.com/newsletter and then simply provide your name and email address to receive a copy each month. If you wish to unsubscribe at any time we will remove you from our list swiftly. Our blog www.gowerpublishingblog.com brings to your attention the articles and tips our authors write and, of course, you are welcome to comment on anything you see in them. We also use it to let you know where our authors are speaking so, if you happen to be there too, you can arrange to meet them if you wish. Foreword What makes certain organizations more successful than others? Why should some organizations benefit from these processes of success and not others? Organizational design and its management has long been the fixation of leaders and scholars alike. Cracking the code to the perfect organizational ecosystem appears to be the dividing line between great success and mediocrity. Added to this pursuit, the twenty-first century launched with great financial volatility, rapid changes, and a level of cultural and global diversity unknown by previous generations. This volatility demands new approaches and methods for the delivery of products, services, and ideas. We no longer can afford to manage organizations with nineteenth and twentieth century models and structures. The pressures of shifting demographics, culture, and technology in this new century require new approaches to organizational leadership and structures. We begin to find that the most successful emergent organizations are agile, self- forming, and self-led. Welcome to the era of the Open Organization. The idea of an Open Organization challenges the thinking of many classically trained business school executives. These ideas are in direct conflict with years of nature and nurture within the confines of classical business hierarchies. For organizations to compete in a new world the notions of what is leadership and organizational structure will be challenged and forever changed. Globalism, technology, and a diminishing workforce are all players in the emergence of a more agile competitive structure we call the Open Organization. Philip A. Foster, DSL This page has been left blank intentionally Preface From my very first corporate job in the early 1990s I discovered that the way organizations “do” business is ineffective. In fact, I think the way we “do” business stinks! How we view and treat human capital is not sustainable nor is it any longer realistic for a twenty-first century world. The “way we’ve always done it” is no longer an excuse for perpetuating outdated and ineffective approaches to leadership and organizational design. What began with my frustration over ineffective leadership and customary hierarchical rituals spans over 20 years of fascination, study and hands-on practical leadership and organizational design; culminating in the solutions I put forth in this book. What I have learned is that solutions for the future viability of any organization must be scalable, agile, self-forming, and self-led. In this new era it is not difficult to find the organizations that are getting it right. But why should only a handful of organizations succeed when there are boundless opportunities for all organizations to embrace a new way of thinking and doing? Organizational design requires new approaches and innovative ways of thinking. The world is pressed on all sides by a diminishing full-time workforce, differing cultural, generational, political, and religious views and the organization of the twenty-first century must be more agile than the previous centuries. The twenty-first century organizational design will require an ability to share ideas, knowledge, resources, and skills across organizational, generational, and cultural boundaries within and outside of the organizational system for the purpose of achieving desired goals. This book explores the challenge to find an organizational design that will address generational, cultural, industry, and other environmental factors in which the system must operate. This book explores the impact of motivation, culture, and generational differences on the organizational system defined as an Open Organization. Philip A. Foster, DSL