Post #3528681

2026-06-18 06:01 UTC

Organisational Dysfunction of the Day Budgets are bureaucracy Context: The organisation has restructured into product teams. They have autonomy over their work, their roadmap, and how they collaborate. Then comes budget season. Each team is asked to forecast its needs twelve to eighteen months ahead, justify them against business cases, and compete with other teams for a finite pool of money. The forecasts get approved or revised by people who are not part of the teams. Mid-year, priorities shift. Some budgets get cut. Others get reallocated through a process that the teams do not control. The autonomy on paper meets the finance department in practice. Everyone knows which one wins. The team owns the product, but not the resources that decide what the product can actually become. OST explains: Whoever controls the allocation of money controls the structure, regardless of what the org chart says. A DP2 design with DP1 budgeting is not a DP2 organisation. It is a DP1 organisation with self-managing teams operating in the spaces that money has decided in advance. DP2 requires that groups control the resources for their own work. That is what it means to own the whole task. What OST does not do is prescribe how this should look in a given organisation, because OST is a conceptual framework, not a recipe. A preset model handed down would itself be a DP1 move — exactly the kind of imposed design the theory argues against. The methods OST provides, Search Conference and Participative Design Workshop, exist to help an organisation work out its own answer, not to deliver one. Beyond Budgeting, developed in part by Norwegian practitioner Bjarte Bogsnes, is one practical attempt to separate the decisions about goals, resources, and evaluation that the annual budget collapses into one. It moves in the right direction. But the answer to how money should flow in a self-managing organisation is one that each organisation must design for itself, using its own people. The structure of money is the structure of the organisation. Both have to be designed together, by the people who will live with the result. #OpenSystemsTheory #SocioTechnical #OrgDesign #leadership

Replies (1)

@trondhjort@hachyderm.io 2026-06-19 06:13

Organisational Dysfunction of the Day Career paths Context: A good developer joins the organisation. They are technically excellent, collaborative, and genuinely invested in the work. Two years in, they get a nudge from their manager: it might be time to think about a senior role, maybe a tech lead position. The path is clear. Individual contributor, senior IC, tech lead, engineering manager, director. Each step means more responsibility, more pay, and more status. Each step also means moving further from the work they loved and closer to the coordination and control functions that DP1 requires. Many take the path not because they want to manage people but because it is the only path available. Others refuse it and hit a ceiling. A few leave for organisations that offer something different. OST explains: The bureaucratic career ladder is one of the primary mechanisms that keeps DP1 in place psychologically. It converts the organisation's need for coordination and control into an individual incentive structure: accept constraints on your autonomy today in exchange for advancement tomorrow. Over time, this produces a management layer of people who were excellent at the work below but whose promotion removed them from it, and a technical workforce that either climbs reluctantly or opts out and stagnates. In DP2, the ladder largely disappears because management functions are distributed into the self-managing groups. This is liberating but genuinely disorienting for people whose professional identity is structured around it, and organisations that move toward self-management without addressing career expectations tend to lose precisely those most invested in the old structure. The transition requires a different answer to "where do I go from here?" — one built around depth of skill and breadth of contribution rather than ascent through a hierarchy DP2 does not have. #OpenSystemsTheory #SocioTechnical #OrgDesign #leadership

Open ##3528680