Why Value Is King & ‘Departments’ Should Die

Posted by on Feb 28, 2011 in Leadership | 8 Comments

As we amble our way into the new economy, we find more and more that everyone is (rightly) obsessed with value.

Value, after all, is what work is about, right?

We work because it is valuable to us (it uses our gifts/strengths) and because it’s valuable to society (makes the world better).

Wait… you say that’s not what most work is about?

You’re probably right, but that’s not because the idea’s not true. No, it appears that we’ve been told a lie.

We’ve been taught that the purpose of work is to strive for money, which confuses the whole idea of value. But money on its own isn’t valuable at all. Money is only a middleman, an imaginary construct that helps us trade for the things we truly value. (Most of our financial system is set up to encourage confusion around this, which also doesn’t help.)

This problem in the way we view work spills over into the way we design our organizations. We see it very clearly in the way certain jobs are valued more than others. Some of this makes sense,* but the inequity has blown WAY out of proportion.

To help combat this alarming trend, organizations should re-think the way “departments” are done. Right now, our companies are built around function — a department exists because all the people in it “do” similar things. But as more work becomes more about knowledge, the value of a job is found less in its function, and even less in a “job description.” (The world is reorienting too quickly for the static conceptual dinosaur we call a “job description” to survive. Even now, they’re just a formality that gets stuffed in a drawer and ignored.)

Instead, companies must re-organize into what I call “value groups.”

There are really only five different ways that an individual can create value in the organization they work with. These are the 5 C’s of Value Creation:

CREATIVE

The Creative group creates value by creating a remarkable product that is efficiently and sustainably produced. These people are found in the former departments of design, manufacturing, engineering, and research & development. They love turning ideas into reality.

These people make stuff.

COMMUNITY

The Community group creates value by building a tribe of brand ambassadors around the company’s products or services. They build relationships. These people used to be referred to as “sales.” But to really work in the new economy, they will need to become more about WOW’ing customers and fostering an ongoing conversation than anything else.

These people connect customers to something that makes their lives better.

CULTURE

The Culture group creates value by ensuring the organization has a healthy and vibrant culture which appreciates and develops its people. This group will be an entirely new construct in tomorrow’s economy. (Some will say this should be what HR evolves into, but most HR departments aren’t positioned to evolve to the extent needed — although many of the people who work there will fit well here.) There are already flickers of life happening in this area, but we have a long way to go.**

These people cultivate and grow a healthy work environment — they’re like a mashup of curator, farmer, and storyteller.

CURRENCY

The Currency group creates value by managing the flow of money to the internal team (employees) and the external constituents (vendors). Everyone from the CFO to all accountants and payroll people fit here. They help find and provide the resources to fund great projects.

These people are numbers and data people (they love them).

CONDUCTOR

This person was formerly known as the CEO. They used to sit at the “top” of the pyramid and look down upon loyal (or not-so-loyal) subjects. No longer — the power has shifted. Now they look up into the organization. Primary job is talent liberation, enabling every individual to realize their potential. Creates value by overseeing that the other 4 C’s work “in concert.”

This is the “big cheese” who realizes he or she is now leading from the bottom of the pit, like an orchestra conductor.

By reorganizing in this way, it is ensured that every individual in the company is provided a very clear structure for how they create value for the organization.

This model will not only help people think differently about how their individual talents and strengths contribute to creating value in their work, but also provide a clear framework for how a company can be physically reorganized.

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P.S. Let me know in the comments if you think I’m missing any ways people create value in a company. Seriously, I’d love the help — I need to know if I’m missing anything here!

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*It does seem fair for payment to be commensurate with the pressures of a specific job. For example, it’s probably safe to say a Starbucks executive carries more organizational pressure than a barista does, and therefore should earn more to compensate. But how much more? That’s a very important question that we’ve been utterly failing to answer appropriately. UPDATE 3/11/11: Seth Godin just made some great additional comments on this idea here. It’s not just about additional pressure but also scarcity of certain knowledge/skills/experience.

**Also check out Zappos’ Kan-Du team.

UPDATE 3/3/11: Check out this page of charts on income inequality. It’s mind-blowing.

ADDITIONAL RECOMMENDED READING: “Why Work?” by Dorothy Sayers

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If you liked that post, then try these…

Sir Ken Robinson On Thinking Differently by Josh Allan Dykstra on March 12th, 2012

When Tech Is No Longer Tech by Josh Allan Dykstra on April 23rd, 2012

How To Create A Passionate Organization by Josh Allan Dykstra on November 21st, 2011

8 Comments

  1. Megan
    February 28, 2011

    Josh – I loved this reorganization suggestion. As I read through it, I kind of matched up the different roles in my organization to each category and I did notice a small gap. I would name it “The Cogs” – to go along with your C theme. This group would consist of support roles – not necessarily working with customers, numbers, product/service development, or culture… but rather the administrative staff that keeps the machine operating. I don’t know what we’d do without our coordinators in our organization – data entry, event coordination, information dissemination, etc.

    Reply
  2. Josh Allan Dykstra
    February 28, 2011

    Hey Megan,

    I see the people you describe as being an essential part of the Culture group. The best example I can give is at Zappos.com — there they have a group of people they call the Kan-Du team. These people exist to do whatever needs doing. They’re like a combination of concierge and all around “helpers.” (Read a bit more about them, and Zappos, here.)

    I think the trick is to ask: “Who is benefiting from this service?” — whatever it may be. In the example of the coordinators we’re talking about, the beneficiaries are primarily the employees. Having people around who make everyone’s lives easier injects the culture with an infectiously positive and helpful spirit. It also gives the people in those “Kan-Du” roles a far greater sense of purpose in their work — they may be cogs, but only in the sense that things wouldn’t work without them!

    Does that make sense or did I miss your point?

    Reply
  3. Megan
    February 28, 2011

    Josh,

    That makes a huge deal of sense. The Zappos example was perfect. I didn’t see it from quite that angle but now that it’s laid out in that way, I couldn’t agree more.

    Cheers!

    Reply
  4. Jamie Farrell
    March 1, 2011

    First, I think the way you laid this out is brilliant. Simple to remember; and still makes perfect sense. I’m guessing the “ops” roles would be divided by each dept? Have you launched this / tested it with any companies? What a phenomenal test case study this could be. Second, I’m learning about this in one of my grad. management classes. We’re talking about how a “learning” organization is better than the traditional functional organization. Interesting to see someone grasp it and write so eloquently about it. Nice work!

    Reply
  5. Josh Allan Dykstra
    March 2, 2011

    Thanks Jamie!

    Not sure what you mean by “ops” — give me a bit more context and I’ll be happy to give you my opinion.

    I’m currently working with one of our clients to try to pilot this idea in their org, but I’m not sure it’s going to happen there to be honest. Would LOVE to find a company where we could try it out. Got any ideas? Be fun to work on it together.

    I really like the work around learning orgs! The challenge we find is that trying to turn an organization built on yesterday’s “departmental” model into a learning org doesn’t work so well. The old structures aren’t built around creating real value or appreciating the strengths of their people and therefore are almost set up to kill any learning that might happen. If we can replace the architecture, we’ve got a much better chance of creating an org that can truly keep growing.

    Reply
  6. Scott Asai
    March 26, 2011

    Can I be a chief?!

    Reply
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    August 31, 2011

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