Why this is important: Understanding how orgs fit together affects all groups of humans who are trying to accomplish something together. It isn’t about business, it’s about how basic human coordination works, and applies to governments, local clubs, non-profits, and yes big companies too. The way orgs fit together here is focused on those that are trying to drive towards tangible outcomes & goals. There are other sorts of orgs (like churches) which are held together by beliefs & rituals, rather than goals, and they function differently.
In the previous article too, we covered how these three elements form a value hierarchy; how each level constrains the levels below it. This post is an expansion of that idea.
The value hierarchy of vision, strategy, and tactics mimics the hierarchy we see in large orgs. We can think of each smaller org as a type of “frame”, with frames inside of frames like so.
The structure here is much like a Russian nesting doll. There’s an org at the top, and an org all the way down at the bottom.
The more you go inside this nesting doll arrangement, the higher the level of control & predictability gets. In the outermost layer (“the economy”) no one really controls or can predict that, but in a hyper-local org like a project that you are working on at work, we have a great deal of control & predictability in comparison.
When we look at this nesting doll arrangement, we can see the level above wherever you are looking has certain constraints and knowledge, and the level below has a different set of knowledge.
This means they all have their own scope of control, and in the end, their own vision, strategy, and tactics. A vision of the future can only come from what you are able to see where you stand. Strategies and tactics must come from the things that you can control. And so each “frame” will have a more localized view & control, and a correspondingly different vision, strategy, and tactics.
Simply: a strategy for a higher-level org becomes the vision for the orgs underneath. In the nested frames of any org, the linkage begins to look like this:
Let’s take a more concrete example, from business of how this can fit together. I am not privy to discussions inside of Tesla, so this is just an example from an outside observer, not a statement about how Tesla works.
- Tesla CEO:
- Vision: accelerate the world’s transition to sustainable energy.
- Strategy: enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices
- Tactics: build and hire sub-orgs to do this, (in a U-form) starting with auto manufacturing
- Automotive Division:
- Vision: (Same as CEO strategy) build a high-end electric car, and subsequently build a lower-cost consumer car at lower prices and higher volumes
- Strategy: focus on high levels of automation & driving down battery costs by increasing battery supplies
- Tactics: build gigafactories to increase battery scale.
The key here is simply that the org beneath (Automotive division) takes its vision from the strategy of the org above (Tesla CEO).
Connections Hold Us Together
When the vision, strategy, and tactics are connected in this way, you get some very nice properties:
- Everyone in the org, from big managers to the newest intern, is pulling in the same direction; they have a shared sense of purpose, and that matters, because everyone needs to feel that their efforts matter
- At each level, you can have reasonable confidence that you will progress towards your goals, because it is clear that the orgs underneath are doing what’s necessary to accomplish them
- Making changes to the org is easier, because you can actually see how things are connected, and when you need to change something, you can trace through to what else that changes
Yes, this can go wrong
The model above is more of an ideal than a reality. In the real world of orgs, personalities, politics, and all sorts of other factors come to play. I can imagine some readers groaning saying, “that’s not how it works” and indeed that’s true in many orgs. Some may look more like this:
In this setup, a department may be unclear of its vision and strategy. A very common problem is simply “people running around doing stuff”. In the absence of vision & strategy, there are always tactics – the stuff we do day to day. And so many people in orgs find themselves with a strategy of “just run around and do things”.
This is mentally draining for everyone involved and doesn’t really help the org in the end. Notice how in this picture there is zero real connection from what a person does day-to-day and what the org is actually trying to achieve. This is dangerous for everybody in the long term, and can only really persist as long as the org is wealthy enough to ignore the problem.
Another type of problem is this one: what if the overall org is without direction – but your part has very clear direction? This is the cause of “split personality disorder” in orgs. The larger org isn’t made of just one sub-org, but many. Situations can develop where the captain doesn’t know where the ship should go, but has 4 trusted lieutenants who all have very firm opinions and are executing conflicting directions at once. Unsurprisingly, this is a recipe for fights and political games as each lieutenant jockeys for influence to execute their vision & strategy.
Knitting an org together is brutally difficult work. In the end, it really does require a vision, strategy, and tactics at each level. It matters less whether it’s written or whether it’s named using those words. What matters more is that it exists, and that the people in the org know what it is.
How to use Nested Frames
With this concept, we can sketch out pictures of how different orgs work and predict where the breakdowns and problems are going to be. Once you see the nested frame concept and know what to look for – spotting inconsistency and dysfunction becomes much easier. Simply look for evidence of the three elements of vision, strategy, and tactics, and ask how they relate in this hierarchical manner. If you can find clear areas where they don’t relate, then the issues that will be created by that are fairly clear.