In the previous chapter we defined human work as turning intention into reality, a definition we have found to be essential to understanding and creating positive organisations. In the field of organisation and leadership, the lack of a clear definition has led to unnecessary confusion as managers and academics tried to understand the experience of people working in organisations and also to clarify the work to be accomplished in various work roles.

Similarly when we think about an organisation what do we mean by that? What actually is being organised? From our definition of work: turning intention into reality we can see that work and the purpose of an organisation are connected in that an organisation is a way of trying to bring an intention into reality. It is a social construction. Someone or some people (see Part 3) have to agree as to what sort of organisation is most likely to realise that intention. Then they must decide how work is to be categorised, distributed and what authority people will have to spend money, use resources, direct others, or be directed in order to achieve the purpose (intention) of the organisation.

One option would be just to list all the tasks that need to be done and then randomly give them to people or send them to people who work in the organisation. This might be fun for a while but it would not seem very well organised. However not all the work is the same and not all people are the same. So we can see that there are different kinds of work: teaching a class is different from running the whole school, cleaning a hospital corridor is very different from conducting a heart transplant. Nor is it simply a matter of apparent importance, all work should make a vital contribution to the overall purpose of the organisation. It is dangerous to conduct an operation in a theatre that has not been properly cleaned or with un-sterilised instruments.

However we need to be clear about the sort of work we are talking about. We have always argued the need for clarity about the difference in complexity of work (see Chapters 8, 9 and 10). What has become more evident to us in recent years, because it is of great practical help to those we work with, is to distinguish between three different domains of work. These domains help to categorise work into three critical areas and help to shed light upon crucial differences in areas that are all necessary in every organisation. No organisation can function unless all of these three domains are operating effectively. It is not a matter of determining which is more important but rather to understand the work that needs to be done in each domain and how it interacts with the other two interdependent domains. Understanding this interdependency is of critical importance.

The three fundamental domains are the Social, Technical and Commercial (see Figure 3.1).

Between them they cover all the work of an organisation. They can be used to help think about how the organisation is structured, roles designed and systems designed.

Figure 3.1 The Domains of Work

The TECHNICAL domain includes all the specialist activity. It is often associated with the core purpose of an organisation, For example, in a school it is educating, in a hospital it is curing and caring, in a civil engineering company it includes designing, engineering and constructing. It includes the specialised processes involved in manufacturing, mining, transporting – indeed all the verbs that describe the particular nature of the organisation. It includes the required, technical expertise that is needed to source, produce, sell and deliver whatever constitutes the business or purpose of the organisation. So this could be products, or services, tangible (manufacturing) or intangible (insurance). It requires knowledge, skill and training.

The COMMERCIAL domain includes an understanding and management of all costs, revenues, margins, capital and generally value for money. It includes all the systems associated with assets, cash flow, net present value, budgets, financial auditing and accounting; everything required to ensure that the organisation continues to be financially viable over time. This requires sound and accurate knowledge of what constitutes cost and revenue, sources and use of capital. This domain also includes an understanding of markets and hence price, competitors and contracts with suppliers and customers. In government it is the understanding of the politics regarding authorisations and budgets. It requires expertise in all aspects of finance including loans and interest. It requires sound expertise and knowledge in terms of bookkeeping, accountancy and banking. This applies to non-commercial organisations. All charities, NGOs and voluntary organisations have cost and revenues.

The SOCIAL (or People) domain is concerned with all the ways in which people work together to achieve the purpose of the business including the structure. This includes all the people systems: recruitment, selection, appraisal, review, promotion, discipline and so on as well as all the systems that go to answer the three questions at work: What am I meant to do? How am I doing? and What is my future? This includes Role Descriptions, Task Assignment, Succession Planning, Career Development. It includes the daily social processes: how people interact, the quality of leadership and team members’ behaviour and generally how people communicate directly and symbolically. It includes all the daily work scheduling systems such as meetings and working hours.

Any organisation needs to be effective in ALL three aspects. It is not sufficient to have a well-run and technically excellent organisation that cannot control its costs. Similarly we may have excellent technical and commercial arrangements but no one stays long or uses their capability because people are treated so poorly. We might have reasonable commercial arrangements and good people but we have no future because the technology is out of date and no longer wanted.

It is interesting to observe that when we talk about the Technical or Commercial domains we are used to being precise and clear about what is required. For example if someone applied to become a teacher she or he would be asked what qualifications they had. It would not be sufficient for the person simply to say, ‘I think I get on very well with children and they seem to like me, so please give me a job.’ Anyone would expect to be questioned about what skills and knowledge they had if they wanted to be a pilot, a nurse, a mining engineer or indeed fill any organisational role. Even so-called unskilled roles require clarity and training as to, for example, how to stack the shelves or deliver the pizza.

Similarly in the financial domain we expect precision. If you were a supplier you would expect to know how much and when you will be paid. If you were negotiating a loan you would expect a specific rate of interest to be agreed as well as a specific period of time or repayment. If you were an employee you would expect your salary to be clear and specific. If you ask: ‘how much will I be paid?’ and the reply was: ‘don’t worry, I think you will find it is enough’ that would clearly not be satisfactory.

When we move to the Social domain, however, we find much less clarity; more importantly, the need for clarity is underestimated or even denied. We use terms such as manager, or supervisor, without having clear definitions. Even more significantly we use terms such as Leadership and Culture, without necessarily being clear what we mean; and sometimes there are many different, contradictory meanings for those terms.

We talk about a need for a cultural change without clarity about what that really means or more importantly how to achieve it. We talk about appointing somebody with good leadership qualities and yet what those qualities may be poorly defined. Even what we mean by meetings or the work of the role may be very different. We argue that it is just as important, to be clear as to what we mean in the Social domain as it is to be clear about what we mean in the Technical and Commercial domains. Misunderstandings, leading to lack of clarity around expectation and meaning in the Social domain are in our view a major cause of distress, inefficiency ineffectiveness and poor quality working relationships.

Of course this does not mean that everything can be precisely or exactly defined at any one time, nor does not mean that things, especially in the Social domain do not change. In fact our constant emphasis on context and purpose is precisely because we are aware that the situation changes all the time. When we speak of precision, however, we are referring to the terminology. At any one time people should share an understanding of what the terms in the Social domain mean. If words can mean whatever we want them to mean this undermines good working relationships and we remain trapped like Alice in Wonderland. All positive cultures and productive social cohesion have a foundation in a common language.

At the same time we are very aware of the nature of ambiguity, complexity and abstraction. Indeed the entire model of Levels of Work is a model of increasing complexity and abstraction. However, if people are to work together effectively they must have some shared terminology and language just as exists in the Technical and Commercial domains. Indeed, all professional work depends upon such shared understanding.

Part of this problem of lack of shared definition (or need for definition) in the Social domain is due to the fact that we all have our own ideas and experiences as to what makes for a good organisation or a good leader or indeed most of what is contained in this domain. We would not expect to turn up to work and be asked to fly a plane with little or no training. However we see in many instances people put into roles which have significant work in the social domain; such as large leadership roles, with little or no clarity of expectation or training. So we see good technical teachers, good technical doctors put into roles such as Principal of a school or Head of Department with little preparation. After all, surely all of this is just common sense; surely we should just be able to get on with it or at least rely on our experience whatever that might be?

Our view is that this is not sufficient. We all know of examples where the great salesperson becomes the terrible manager of salespeople; the great police officer becomes the dreadful sergeant who ‘could not manage a one-car funeral,’ as one police officer described his situation.

It is not sufficient to exhort people to collaborate or innovate or empower without explaining further what these terms actually mean in practice. They sound positive but do people understand what they are meant or even authorised to do?

We recently had the experience of a Head Teacher who was reprimanded for not being ‘collaborative enough’. She asked what that meant and was told that she shouldn’t make decisions without the approval of her team. She should not only consult them but also get ‘buy in’, and if they didn’t agree she should not go ahead. The Head was left wondering how it was fair that she remain accountable for outcomes in the school but did not have the final say in decisions.

Interestingly in the same organisation others had interpreted collaboration differently: as meaning supporting the Head Teacher in decisions even if they didn’t like it, a further interpretation was simply that people should work more in teams and look for opportunities to help and support each other. These three quite different views have very different expectations. There was no written or shared definition … back to Alice!

The material in this book and the content of Systems Leadership is all about the Social domain and how, by being clear about what we mean and expect in that domain, we can significantly enhance the quality of work in the organisation and improve the chances of achieving the purpose of the organisation. We also improve the quality of life for the people who work in the organisation.

From the above discussion, however, we can see that when thinking about an organisation people can sometimes be captured by one aspect. They might over-emphasise one domain or another.

This is partly understandable because often the purpose of the organisation is to be found in the Technical domain. For example Health Services, Social Services, Educational Services and indeed all professional service organisations; lawyers, architects, engineers are there to deliver their expertise to society in the form of customers or clients. It can seem therefore that, this is clearly the most important work or even, the only work of importance. The other two aspects are either ignored or demeaned. When working at a university with a group of academics they clearly and explicitly thought their Technical work in the form of their academic specialty was all that mattered, and that the administrators were overpaid and an impediment to the real work.

When discussing the changes in finances, government grants and fees and the Vice Chancellor’s requirement that they deliver commercially viable courses one professor commented angrily – ‘This is a university not a business!’ It was as if any consideration of cost and revenue was not relevant, and even worse, it was insulting. Another comment from another academic was – ‘Changes are imposed on us, we do not get consulted’. When it was pointed out that there were meetings organised and academic representatives asked to attend and contribute, the response was ‘I haven’t got time to go to meetings!’. In this organisation it is as if the Social and especially the Commercial domains are lesser and almost unworthy topics.

In manufacturing businesses, there is often tension and conflict between the Technical and Commercial Domains. This was best expressed by Bob Lutz in his book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business (2013). Interestingly the Social domain is rarely mentioned in this exposition unless there is a derogatory reference to HR.

Despite these issues, it is very clear that all aspects are necessary. There can be no university without income or expenditure; there can be no university without administration and social organisation. With Western governments trying to reduce public expenditure and the cost of services such as police, social services, education and health; there is the call not to reduce front line services. By this they mean the Technical domain. However, increasing regulation in health and safety, accounting and governance, child protection and so on, actually increases the work in the Social domain. Sometimes administrators are cast as parasites, backroom staff living off the organisation. Now we are not arguing against any particular regulation, nor against the need for efficiency, merely that all domains must be appreciated in terms of their necessity for the sustainability of the whole organisation.

We have found many of the problems in organisations are rooted in the lack of understanding of the Social domain. The lack of clear terminology has made shared understanding difficult, if not impossible in many situations. Our work; largely developing concepts and theory in the Social area, actually does provide clear approaches to reducing the negative aspects of bureaucracy and increasing productivity but it also appreciates the necessary work in all these domains. A simplistic cost cutting approach – ‘reduce costs by 20%’ – does not improve much unless the work necessary to achieve the organisation’s purpose is clearly understood. Such approaches or short cuts are usually primarily about short-term cost issues not long-term objectives. Even worse, such across the board cuts punish the most efficient and reward those who over-staff either through inefficiency or, just in case there is a reduction in workplace.

Roles

We are emphasising the importance and interdependence of all three aspects – (STC) – but that is not to say they are always equivalent in terms of proportion or should always be equivalent at any particular time.

If we consider roles in an organisation, each role should be considered in terms of these domains and, depending upon the purpose of the role, work distributed appropriately amongst these aspects. For example, a classroom teacher or nurse should be focusing mainly on their technical expertise and social process. Most of their attention should be devoted to that. However it is useful to ask how much should they appreciate costs?

At a mine in Western Australia, a young electrician who was mending a large power supply cable for a jumbo drill was asked if he knew how much the cable cost. He replied with the exact cost per metre and said – ‘That’s why I’m being bloody careful!’ We are not suggesting he should know the cost of everything but that knowledge helped him be more productive from the organisation’s perspective.

Similarly, people in such roles should not spend a great amount of time in meetings. However, as work is a social process and an organisation a social structure, people should understand the purpose of their role, how it relates to the purpose of the organisation and other people in the organisation. One of the primary causes of failure of organisations is precisely the lack of efficient and effective social organisation. Poor social organisation, including poor leadership are major drivers of poor productivity and lead people to give up or retreat into a minimalist approach of just doing what is needed to get by and survive.

Leadership

So who is meant to integrate these Domains? We argue that this is a key part of the work of leadership. It is the work of leaders at every level to understand and be able to explain how and why a role is constructed as it is and why all three domains are important.

The design of roles is critical. If someone’s primary purpose is to be a technical expert, he or she should not be encumbered by having to run a large department and be required to carry out a large amount of Social or Commercial work. Similarly, a general manager or school principal/head teacher knows the role will require considerable amounts of leadership work (Social) and managing a budget (Commercial) and so it would not be reasonable to expect them (in the case of the school principal) to have a full teaching load.

The leader, therefore, integrates work across the social, technical and commercial domains (which in itself is work in the social aspect). The leader must be able to explain why each role has work and expectations in each of the domains and why that work is distributed as it is.

Use of the STC Model

We, and people we have worked with, have found this model has utility in several ways.

Conclusion

We find that many organisations are more conscious of how important it is to understand and manage the Technical and Commercial aspects with discipline and rigour based on sound principles and theory. There is less awareness that the Social or people aspect should be subject to similar rigour. We have developed Systems Leadership Theory to help redress the balance, not because the Social processes are the most important but because they are equally as important: successful and positive organisations need all three to be in balance.

This categorisation of aspects of work and organisational activity has some similarities with the work of Trist et al. (1990, 1993, 1997) and others from many years ago (Emery, 1969, 1981) That work and ours looks at work systems and the relationship between people and objects or the Technical processes that are used by people to achieve the purpose of the organisation. The work of Trist, Emery and others had origins at the Tavistock Institute and have the same roots as the thinking of Jaques who also worked there. We recommend the reader read these references (and compare similarities and differences).

The full appreciation of that work and discussion would take much more time and space than is possible here. Suffice it to say that our approach, like the socio-technical systems concept, pays great attention to the discretion within roles and the need to connect and enhance human decision-making rather than alienate people by reducing their choices and creativity. Also similar is our shared concern that too many levels of management, not only add bureaucracy, but also stifle creative opportunity. Both approaches look at organisations in terms of systems; from the entire organisation to parts of it and, as we explain, the Social, Technical and Commercial systems and how they interact.