Creating organizational routines

organizational routines

Charles Duhigg in his book, The Power of Habit: Why we do what we do in life and business, says just like how individuals have habits, organizations have routines. These routines are crucial for achieving organizational outcomes and success. Here are some quotes from the book that emphasize this point.

He hadn’t learned how to control his emotions. He didn’t have the habits that, since then, he’s spent years practicing.
To deal with these tensions, the staff had developed informal rules—habits unique to the institution—that helped avert the most obvious conflicts. Just as choosing the right keystone habits can create amazing change, the wrong ones can create disasters. It’s not just hospitals that breed dangerous patterns, of course.
Destructive organizational habits can be found within hundreds of industries and at thousands of firms. And almost always, they are the products of thoughtlessness, of leaders who avoid thinking about the culture and so let it develop without guidance. There are no organizations without institutional habits. There are only places where they are deliberately designed, and places where they are created without forethought, so they often grow from rivalries or fear. But sometimes, even destructive habits can be transformed by leaders who know how to seize the right opportunities. Sometimes, in the heat of a crisis, the right habits emerge. “Much of firm behavior,” they wrote, is best “understood as a reflection of general habits and strategic orientations coming from the firm’s past,” rather than “the result of a detailed survey of the remote twigs of the decision tree.” Or, put in language that people use outside of theoretical economics, it may seem like most organizations make rational choices based on deliberate decision making, but that’s not really how companies operate at all. Instead, firms are guided by long-held organizational habits, patterns that often emerge from thousands of employees’ independent decisions. And these habits have more profound impacts than anyone previously understood. These organizational habits—or “routines,” as Nelson and Winter called them—are enormously important, because, without them, most companies would never get any work done. Routines provide the hundreds of unwritten rules that companies need to operate. They allow workers to experiment with new ideas without having to ask for permission at every step. They provide a kind of “organizational memory,” so that managers don’t have to reinvent the sales process every six months or panic each time a VP quits. Routines reduce uncertainty—“because, without them, policy formulation and implementation would be lost in a jungle of detail.

Of course, these organizational routines comes with their own set of benefits not only for the organization but also, for the individuals. Needless to say, there are challenges as well.
But among the most important benefits of routines is that they create truces between potentially warring groups or individuals within an organization. Companies aren’t families. They’re battlefields in a civil war. They have routines—habits—that create truces that allow everyone to set aside their rivalries long enough to get a day’s work done. Organizational habits offer a basic promise: If you follow the established patterns and abide by the truce, then rivalries won’t destroy the company, the profits will roll in, and, eventually, everyone will get rich.
Routines and truces offer a type of rough organizational justice, and because of them, Nelson and Winter wrote, conflict within companies usually “follows largely predictable paths and stays within predictable bounds that are consistent with the ongoing routine…. The usual amount of work gets done, reprimands and compliments are delivered with the usual frequency…. Nobody is trying to steer the organizational ship into a sharp turn in the hope of throwing a rival overboard.” Most of the time, routines and truces work perfectly. Rivalries still exist, of course, but because of institutional habits, they’re kept within bounds and the business thrives. However, sometimes even a truce proves insufficient.
If you could somehow diagram all your work habits—and the informal power structures, relationships, alliances, and conflicts they represent—and then overlay your diagram with diagrams prepared by your colleagues, it would create a map of your firm’s secret hierarchy, a guide to who knows how to make things happen and who never seems to get ahead of the ball.
But truces are only durable when they create real justice. If a truce is unbalanced—if the peace isn’t real—then the routines often fail when they are needed most.
Creating successful organizations isn’t just a matter of balancing authority. For an organization to work, leaders must cultivate habits that both create a real and balanced peace and, paradoxically, make it absolutely clear who’s in charge.

Leaders in organizations seize the crises as opportunities to disrupt existing behavioral patterns and create new ones for good.

Sometimes, one priority—or one department or one person or one goal—needs to overshadow everything else, though it might be unpopular or threaten the balance of power that keeps trains running on time. Sometimes, a truce can create dangers that outweigh any peace. There’s a paradox in this observation, of course. How can an organization implement habits that balance authority and, at the same time, choose a person or goal that rises above everyone else?
During the turmoil, organizational habits become malleable enough to both assign responsibility and create a more equitable balance of power. Crises are so valuable, in fact, that sometimes it’s worth stirring up a sense of looming catastrophe rather than letting it die down.
Rhode Island Hospital is not the only medical institution where such accidents happen, of course, but they were unlucky enough to become the poster child for such mistakes. But once a sense of crisis gripped Rhode Island Hospital, everyone became more open to change. These institutions have found that reform is usually possible only once a sense of crisis takes hold.
Good leaders seize crises to remake organizational habits. In fact, crises are such valuable opportunities that a wise leader often prolongs a sense of emergency on purpose. That’s exactly what occurred after the King’s Cross station fire.
The same kinds of shifts are possible at any company where institutional habits—through thoughtlessness or neglect—have created toxic truces. A company with dysfunctional habits can’t turn around simply because a leader orders it. Rather, wise executives seek out moments of crisis—or create the perception of crisis—and cultivate the sense that something must change, until everyone is finally ready to overhaul the patterns they live with each day.