Contact: info@cleararchy.com

Introduction

Hierarchies are much maligned these days and self-management is all the rage in the digital media. However, hierarchies exist in multiple forms. Modern organizations rightly strive to not have a strict communication hierarchy. But like it or not, there is still going to be a decision making hierarchy regardless of whether the reporting hierarchy is flat or deep. The real challenge then, is to make the decision making sufficiently decentralized, transparent, and inclusive.

All big organizations, even so-called “flat” or “networked” ones, are usually quite hierarchical when it comes to decision making. Any talk of Holacracy, Teal etc. is unrealistic in these places. The underlying problem is not hierarchy itself but the opaqueness of decision making which is known to persist even in the absence of a formal hierarchy.
Cleararchy is a way to bring transparency, and thereby accountability and learnability, to decision making. This is necessary for decentralized decision making and true empowerment at lower levels of a big organization.
Traditional hierarchy is one of oversight (supervision, approvals, etc.). Cleararchy replaces it with a hierarchy of outcome-ownership. Outcome owners are held accountable for decisions and outcomes in exchange for autonomy and authority. Outcome owners have decision rights and their teams (and others) have input rights. Input rights are made meaningful through the use of decision records. The autonomy of outcome owners isn't absolute. It may be overridden by owners of higher-level outcomes. It is also kept in check through the use of devices such as alignment maps.
Cleararchy is most suitable in situations where fast moving, autonomous yet aligned, outcome-oriented organization is highly desirable. This is the case, for example, for today’s digital organizations.

Hierarchy Is Inevitable

What happens when you get rid of an hierarchy? Unofficial hierarchies inevitably arise in the absence of official ones. They are worse because they cannot be held accountable (since they don’t officially exist). That’s the insight of an influential essay about the feminist movement of the sixties. Titled as “The Tyranny of Structurelessness”, it therefore argues for formalizing hierarchies and building accountability in. Some excerpts:
A “laissez faire” group is about as realistic as a “laissez faire” society; the idea becomes a smokescreen for the strong or the lucky to establish unquestioned hegemony over others. This hegemony can be so easily established because the idea of “structurelessness” does not prevent the formation of informal structures, only formal ones.
As long as the structure of the group is informal, the rules of how decisions are made are known only to a few and awareness of power is limited to those who know the rules…For everyone to have the opportunity to be involved in a given group and to participate in its activities the structure must be explicit, not implicit.
The essay goes on to describe principles for a democratic structuring of activist groups but that is not so relevant for a business context.
Evgeny Morozov references the above essay in an article arguing why social movements shouldn’t bank too much on the internet:
…social movements will never be able to transcend hierarchies and replace them with horizontal networks. [This view] was cogently expressed by Jo Freeman in 1972 in her landmark essay “The Tyranny of Structurelessness.” Freeman argued that hierarchies are bound to emerge anyway, and that pretending that they do not exist simply lets unacknowledged leaders escape accountability.
He goes on to quote a participant in the Occupy protests:
One of the consequences of just how difficult and time consuming participating in the movement became is that key players stopped showing up. Well not exactly; they still showed up, but mostly for side conversations, informal gatherings, and the meetings that planned what would happen at the public meetings. Using social media … they formed an invisible guiding hand that simultaneously got shit done, avoided accountability, and engaged in factional battles with each other … you know what’s worse than regular same-old elites? An [sic] barely visible elite that denies it is an elite and can’t ever be called to account.
And so, in our present, collective state of evolution, we inevitably end up with decision making hierarchies one way or another. It is tied to our need for control. Large organizations made up of self-organized teams inevitably end up with hierarchical (implicit, if not explicit) decision making structures. Cleararchy accepts this reality and provides ways to make decision making rights explicit, transparent and most importantly, accountable. It is not pro-hierarchy. It is pro-dealing-with-inevitable-hierarchy.
Organization is necessary and organization implies hierarchy. At best, we can try to keep the hierarchy honest and accountable. Eliminate hierarchy and you eliminate organization and thereby the effectiveness of a group. An article in The Nation touches on this issue in a different context and quotes Robert Michels, a German social theorist on the nature of organization:
In his classic book Political Parties, he wondered why the parties of the left, so ideologically committed to democracy and participation, were as oligarchic in their functioning as the self-consciously elitist and aristocratic parties of the right. Michels’s grim conclusion was that it was impossible for any party, no matter its belief system, to bring about democracy in practice. Oligarchy was inevitable.
For any kind of institution with a democratic base to consolidate the legitimacy it needs to exist, it must have an organization that delegates tasks. The rank and file will not have the time, energy, wherewithal or inclination to participate in the many, often minute decisions necessary to keep the institution functioning. In fact, effectiveness, Michels argues convincingly, requires that these tasks be delegated to a small group of people with enough power to make decisions of consequence for the entire membership. Over time, this bureaucracy becomes a kind of permanent, full-time cadre of leadership. “Without wishing it,” Michels says, there grows up a great “gulf which divides the leaders from the masses.” The leaders now control the tools with which to manipulate the opinion of the masses and subvert the organization’s democratic process.
Cleararchy attempts to stem the natural corruption process described above with the help of clear articulation of the decision making hierarchy and with decision records.

Decision Records

Decision records are a mechanism to balance the authority of decision makers. They help sustain institutional memory of the rationale for decisions. When combined with decision retrospectives, they help an organization make better decisions by learning from previous ones.

What is it?

It is a record of key decisions along with arguments (in favor/against/alternatives etc.) along the way. It is useful for the categories of decisions that result in substantial deployment of resources and/or have proven to be controversial or painful in the recent past.

How does it help?

It helps the organization learn to make better decisions faster without too many meetings. It allows for real empowerment via autonomy for decision making and balances it with a culture of accountability.

How does it work?

We maintain a record of important decisions and hold periodic decision retrospectives to learn from hindsight and to reflect if the decisions we made were the best given the information available at the time.
First, an executive sponsor comes up with a set of decision categories that could benefit from a decision record. Examples of common categories are product strategy, funding, sourcing, build-vs-buy decisions and staffing.
Next, they establish decision owners and a circle-of-input providers for each decision category. Decision owners have the autonomy to make decisions and are held accountable for them. They are required to solicit written input from their circle-of-input but not mandated to go by the input. This gives them autonomy for decision-making.
In order to balance decision-making autonomy with accountability, we have the decision record. It dissuades decision owners them from disregarding input and helps the group retrospect and learn from previous decisions. To make this process effective, we capture along with decisions, their expected effects and expected time-frame for the effects to play out. This information is used during retrospectives.
The decision owner or anyone from the circle-of-input can table a topic as something that requires a decision. After a few days of offline deliberations, the decision owner makes a decision along with a short description of what effect the decision is expected to have by when. The decision owner may also nominate someone from the circle-of-input as decision-maker on a case by case basis.

Decision Retrospectives

This is similar in spirit to Agile retrospectives. Once a quarter, each decision group picks the decisions that haven’t been covered in retrospectives so far and whose expected effect time-frames have elapsed. For each decision, the group compares actual effects and time-frames with what was recorded as expected. The reflect if the decision was the best one under the circumstances and discuss potential learnings.

Expectations

For non-urgent decisions, decision-owners shall allow for a minimum of days (e.g. 5 days) for discussion before making a decision.
For urgent decisions, it might work better to have a meeting and record the key arguments later. The decision owner posts the summary and input providers reply with corrections, if any.
Decision owners are expected to read threads initiated by others within a certain maximum number of days (e.g. 3 days) of posting. While there is no requirement to respond, decision owners will be assumed to have taken the input into consideration in future settings.

Mechanics

A new discussion thread can be:
Initiated by decision owner
  • Soliciting input towards a decision to be made
  • Soliciting feedback for a decision that’s nearly made
  • Soliciting input for change of earlier decision
  • Soliciting feedback for a proposed change of decision
OR
Initiated by input provider
  • Propose a new topic that requires a decision
  • Suggest a change to a decision
  • Affirm a decision with new information
When a decision is made, the decision owner shall state the decision in the thread. Threads that don’t culminate in a decision may represent stalemates and a potential indicator of organizational dysfunction. If a decision goes against certain inputs, it is good practice to explain why the decision was made despite the input.

Decision-making in writing in the 21st century! Are you serious?

You bet. It may appear to be slow and cumbersome at first, but once you see the results in terms of reduced meetings, reduced challenges of synchronous communications, greater clarity of thought and the power of a record based retrospective, there will be no going back. To know more, please refer the chapters on accountability and communications in the book Agile IT Org Design.
Verbal, meeting-based, decision making sounds as natural as creating a slide deck to make a pitch. And then we see the way Amazon does it. Jeff Bezos explains why:
Well structured, narrative text is what we’re after rather than just text. If someone builds a list of bullet points in word, that would be just as bad as powerpoint.
The reason writing a 4 page memo is harder than “writing” a 20 page powerpoint is because the narrative structure of a good memo forces better thought and better understanding of what’s more important than what, and how things are related.
Powerpoint-style presentations somehow give permission to gloss over ideas, flatten out any sense of relative importance, and ignore the innerconnectedness of ideas.

Tools

Start simple with a email-list per decision group. Once it catches on, feel free to explore tools like Loomio or a StackOverflow clone.

Example of Usage

A B2B SaaS company is using decision records as described here for a number of decision categories. For example:
Shaping features: Product owners are decision owners and product marketing managers, salespeople and architects form the circle-of-input.
Team Staffing Changes: The CTO acts as the decision owner while the development managers form the circle-of-input.

Is Cleararchy pro-hierarchy?

Cleararchy isn’t pro hierarchy. But it is pro dealing-with-inevitable-hierarchy.
To paraphrase Nietzsche:
All things (even data) are subject to interpretation and the interpretation that prevails is a function of power and not truth.
This is unfortunately still true at the higher rungs of most large organizations. Cleararchy doesn’t encourage hierarchy. However, it is realistic about what generally works in the present state of human evolution. Most humans crave for control and therefore power. One may argue that this craving is not innateto human nature, that it is a side effect of the social environment, but that is beside the point here. Organizations consist of people from society as it is, not as it could be. Therefore, Cleararchy doesn’t discourage hierarchy when it comes to decision making.
Cleararchy acknowledges the craving for control and deals with it. Self-organization or self-management approaches simply don’t acknowledge current reality that is readily visible at the higher rungs of organizations and has been the subject of several books. Pretending these drives don’t exist and attempting self-organization leads to the tyranny of structurelessness.
For instance, Tom Reiger, author of the book,“Breaking the Fear Barrier: How Fear Destroys Companies From the Inside Out and What to Do About It”, calls out parochialism, territorialism and empire-building as organizational barriers to agility and innovation. Parochialism prioritizes “local needs and goals” over “broader objectives and outcomes”. Territorialism is the “hoarding or micromanaging of internal headcount, resources or decision authority in an effort to maintain control”. Empire building refers to “attempts to assert control over people, functions or resources in an effort to regain or enhance self-sufficiency”.
Just like how software accumulates technical debt unless maintained well, organizations accumulate organizational debt in the absence of counteracting organizational mechanisms.

What about collective ownership?

This is best described with an excerpt from Agile IT Org Design:
In the absence of clear assignment of accountability, we often get collective owning of authority and collective disowning of accountability. Collective ownership works better within a team, and the most common example is collective code ownership in development teams. However, there is clear accountability even in the context of collective code ownership. The question “Who broke the build?” fixes accountability unambiguously when version control and continuous integration are in use. Besides, even within Agile development teams, things aren’t so egalitarian. The tech lead has ultimate authority and accountability (ownership) for technical design decisions. The product owner has ultimate authority and accountability for what goes into a feature. Collective ownership of business outcomes across teams is an order of magnitude more difficult to achieve. Kudos to those who can pull it off. For the rest, clarifying ownership is a first step to improving organizational agility.

Why not self-management?

Organizations successfully practicing self-management are the exception, not the norm. The norm, unfortunately, is organizational dysfunction despite hierarchical management. A few examples:
Most organizations are better off but its leaders still lack the kind of integrity and maturity needed for successful self-management.
That said, Cleararchy is not incompatible with self-management. A given outcome owner may choose to use a self-management approach with their team. An organization cannot simply pursue a goal of self-management amongst all its teams — self-management has to ensue. At the same time, we cannot put desired outcomes at risk waiting for self-management to happen. Hence Cleararchy.

Cleararchy — Origins

Cleararchy originated out of a growing experiential realization that scaling agility did not necessarily mean scaling collective ownership, that unclear ownership was often the cause of organizational dysfunction. This was first described in a chapter called “Accountability” in the book, Agile IT Org Design. That chapter describes the tools needed to implement Cleararchy — accountability maps and decision records.
Enterprises Project — a joint initiative of CIO Magazine and Harvard Business Review — have listed the book as a must-read for CIOs. It was nominated to the list by John Marcante, CIO of Vanguard Inc, The book is also featured in a digital leaders reading list via nomination by Nick Williams, Managing Director, Consumer Digital at Lloyds Banking Group.