Six Models of Organization

(An excerpt from Imaginization: The Art of Creative Management )

"The Gulf" is very common in what I call "Model 3" organizations. These are organizations
that, like Stereotype (a case study discussed in Imaginization: The Art of Creative
Management), get stuck in their attempts to change because they are caught by the old
bureaucratic forces they are attempting to shake off. I have developed the "Model 3" concept
as one of six models of organization designed to characterize organizational forms suited to
different degrees of environmental change, and illustrate the difficulties that can be
encountered in trying to shift from one form of organization to another.
The six templates provide rough models against which people can identify the characteristics
of their own organizations or organizational subunits and understand the generic nature of
their particular difficulties in managing organizational change. As in the case of "The Gulf,"
the realization that the problems being faced are "not just ours" can have a liberating effect,
depersonalizing the immediate context of the problem to create an opportunity for new
dialogue, understanding, and action.
Model 1 is the classical bureaucracy, carefully blueprinted into
functional departments, run from the top by the chief executive
through various structures, rules, regulations, job descriptions and
controls. It is designed to work like a machine, and operates very
efficiently - so long as nothing changes!
Bureaucracies, like machines, operate well when there are stable
functions to be performed, especially when they can be broken down into a series of separate
operations coordinated from the top. But when an organization's tasks keep changing, it's a
different story. The changes create a host of problems that no one is mandated to solve.
The problems thus work their way up the hierarchy, and eventually fall on the chiefexecutive's desk. He or she soon gets overloaded, and initiates a shift to Model 2 by
appointing a top management team. Collectively, they now deal with the problems, leaving
the bureaucratic machine below (ie. the functional departments) to continue with the routine
work.
Model 2 works reasonably well for dealing with moderate amounts of
change. But if the pace heats up, the top team gets overloaded, with a
host of operational and strategic decisions demanding attention at team
meetings. Gradually, or as a result of a specific organizational
redesign, Model 2 thus gets pushed towards Model 3.
Interdepartmental committees or project-teams are established within
the body of the organization itself. The idea is that routine work will
still be conducted through departmental hierarchies, with special problems or projects being
delegated to the project-teams for investigation and the development of appropriate action
plans.
This initiative, often heralded as a move to a "project organization," makes life bearable at the
top again, since a lot of work can now be delegated. But because the teams are set within the

context of a bureaucratic structure, they often fail to take off. There are a lot of projects and a
lot of meetings. But there are also a lot of spinning wheels. The team meetings, as in
Stereotype, become ritualistic. Team members are usually representatives of their
departments. As such, they have dual loyalties - to their departmental bosses, and to their
team. But since real power over day-to-day activities and career progress rests with the
departmental heads, the teams themselves do not develop any real clout. Members usually "sit
in" on team department's point of view. If problems arise in the meeting, decisions are usually
delayed until representatives have had a chance to "report back" and test departmental
reactions. If the issue is truly controversial, it ends up getting passed to the top team, so that
departmental heads can resolve it for themselves.
Model 3 is thus an organization characterized by pseudo teams that
are only capable of dealing with relatively minor issues. In effect,
Model 2 still rules.
All three of these models are evident in Stereotype, which, in effect
has shifted through Models 1, 2 and 3. It has many of the problems
described above. The powerlessness and cynical culture that has
developed in the project teams is generic - shared by countless other organizations caught in
the same bureaucratic trap. The structure of the organization has changed, but the culture and
politics are still firmly set in the old mould.
Organizations can often make successful transitions from Models 1 or 2, to Model 3. But
Model 3 is only effective when the issues delegated to the teams are small in number, require
consultation rather than action, and allow generous time-frames for producing results. We are
back to the contingency view of organization and management discussed in relation to
Stereotype. To be effective, organizations need to structure themselves through models that
are appropriate for dealing with the external challenges being faced. If the quest, as in
Stereotype, is to create an organizational structure that is driven and enlivened from the
middle by flexible, aggressive, innovative teams, the results of Model 3 are almost always
disappointing.
In my research I encounter frustrated "Model 3" organizations time and again. Like
Stereotype, they think or hope that they're unleashing the potential of a dynamic team-based
approach to work, but in effect, they are usually just involving middle managers in timeconsuming processes of interdepartmental consultation. Dynamism and team-based energy in
the middle is only created against the odds, by groups of managers who are so committed to
their team's overall goals that they take great personal risks to advance their cause.
To achieve the flexible, innovative, committed organization that is needed to deal with the
turbulence and change found in the modern environment, organizations have to get beyond
Model 3. This is where Models 4, 5 and 6, come in, especially Models 5 and 6.
Model 4, the matrix organization, is a hybrid bureaucratic form. It's
special character rests in the fact that it has decided to give more or
less equal priority to functional departments such as finance,
administration, marketing, sales, production, and R & D, (the columns
of the matrix) and to various business or product areas (the rows).
Thus people working in various product or business teams within the
organization have a dual focus. They must work with two perspectives

in mind, combining functional skills and resources with an orientation driven by the key tasks
they have been assigned. The dual orientation means that bureaucratic power typical of
Models 1, 2 and 3 is diluted, since the heads of major projects, or groups of projects can be as
important and as powerful as heads of traditional functional departments. In this way,
members of project-teams are not necessarily pulled back into the traditional lines of
responsibility. Since project heads may have a large influence on rewards and future career
paths, real team commitment can develop. In successful examples of Model 4, the projectteams become the driving force behind innovation, providing an ability for the organization to
change and adapt along with challenges emerging from the environment.
The same is true of Model 5. This model, typical of small and
medium-sized organizations that are highly innovative, is built around
teams. The influence of functional departments is minimized. People
are appointed to work on specific projects. One or two projects may
command most of a person's energy at a particular time, but he or she
may also be contributing to others. As the work on one project-team
winds down, commitments on other teams increase. Career progress in
this type of organization rests in moving from one project to another.
This kind of organization is ideally suited for dealing with the challenges of rapid change.
Unlike the matrix of Model 4, it does not have a heavy functional structure to carry along. It's
focus is teamwork, innovation, and successful initiatives, completed in a profitable, timely
fashion. Functional departments, insofar as they exist, are support departments, committed to
enhancing the work of the teams, who are their clients. The whole operation is controlled by
the management team at the centre. It focuses on strategic thrust, defining operational
parameters, marshalling and channelling resources, monitoring results, and facilitating the
general management of the system as a whole. The teams may be managed through "umbilical
cords" characteristic of the spider plant model discussed in Chapter 2.
The organization is much more like a fluid network of interaction than a bureaucratic
structure. The teams are powerful, exciting and dynamic entities. There is frequent crossfertilization of ideas, and a regular exchange of information, especially between team leaders
and the senior management group. Much effort is devoted to creating shared appreciations
and understandings of the nature of the organization and its mission, but always within a
context that encourages an open, evolving, learning-oriented approach to business. The
organization is constantly trying to find and create the new initiatives, ideas, systems and
processes that will contribute to its success. It is a kind of adhocracy, finding and developing
its form as it goes along.
This is the kind of organization that Stereotype, at least in part, may need to become to meet
the challenge of its local environment. Unfortunately, it is stuck inappropriately in Model 3.
Model 6 provides another example of an organizational style ideal for
conditions requiring flexibility, innovation and change. In a way it's a
non-organization in the sense that it does not exist as a physical entity.
It's a subcontracting network where the team at the centre steers the
whole enterprise.
Take the fashion industry, where Model 6 networks flourish as ideal
means of dealing with the rapid pace of change. The team at the centre of the network has

come together to exploit a market niche. Rather than build "an organization," it decides to
subcontract almost everything: detailed design, manufacturing, marketing, distribution,
communications. The "satellites" are the subcontracting firms. They are linked to the centre
through specific contracts which come and go. Membership of the network is in constant flux.
The team at the centre is the only point of continuity. It directs strategy, tactics, and resource
flows, keeping lean, minimizing overhead, operating with maximum flexibility. No planning
department. No MIS. No HRD department. Everything contracted out, even routine finance!
It often operates on "spider plant principles," discussed in Chapter 2.
These six templates, which I have presented as simplified models of a total organization, often
exist in mixed forms. They provide an evocative means of helping members of an
organization see which model or models they are currently employing, and can help them
judge what's possible or ideal in terms of organizing for flexibility and innovation.

To illustrate, consider their application to Stereotype. The models provide a powerful way of
helping Stereotype's Management Team understand why the project-teams in its Model 3
organization are not "cutting loose" and being truly innovative. They can help them to
understand "The Gulf" that often arises between the top and middle levels of an organization
from a new perspective, and to see that if they truly want to create a more flexible, innovative
organization perhaps they should be thinking about Models 4, 5, and 6 rather than just
pushing for more team training within a Model 3 structure. For example, they could find a
way of shifting closer to Model 4 by elevating the priority of key projects, and changing the
composition and orientation of the Management Team to reflect this. Or they could choose to
launch Model 5 or Model 6 initiatives in special areas of the organization, or for special
projects, as illustrated above. In doing so, they may be able to introduce a new potential for
entrepreneurship and innovation in specific pockets of the organization, while still meeting
the constraints set by HQ. An awareness of the six models, and an ability to see and name
precisely what is wrong with the current situation, could provide a powerful lever for change.
Used and interpreted flexibly, I find that these rough and ready templates can have a powerful
effect. They can provide the all-important "mirror" that allows people to see where their
organization is, and where it could be.
Some Related Resources:

Images of Organization, 2nd Edition

Imaginization book excerpt: "Deerhunting"

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