Dual Operating System: Running Hierarchy and Network Side by Side

John Kotter's dual operating system adds a second, network-like system to a company's hierarchy that picks up change quickly while the hierarchy secures operations. The network consists of volunteers who join strategic initiatives alongside their regular jobs and stays connected to the hierarchy. For executives the model is a way to speed up change without redesigning the organisation.

This article describes where the model comes from, what it is for and what it is not, how the eight accelerators work and how an introduction runs in six steps. A decision table shows whether the model fits your company's situation.

What is a dual operating system?

A dual operating system is an organisational model with two systems running at the same time: the hierarchy for the running business and a network for strategic initiatives and change. John Kotter, professor emeritus at Harvard Business School, introduced it in the November 2012 issue of Harvard Business Review under the title “Accelerate” and developed it in a book of the same name in 2014. His starting observation: companies usually begin as networks in which a few people decide quickly, and they grow into hierarchies because size demands control and rules. The hierarchy is built for repetition and reliability. It is less suited when markets and technologies change faster than planning and budget cycles allow.

The network Kotter proposes does not replace the hierarchy. It consists of people from all levels and functions who volunteer, stay in their roles and work on strategic initiatives in addition. In his book Kotter gives five to ten per cent of the workforce as the order of magnitude that is enough for the network to work. The two systems are connected: the hierarchy sets strategy and framework and takes results into operations, while the network supplies ideas and speed.

The model belongs to a family of approaches that combine hierarchy and self-organisation. Structurally related are the unFIX model, which offers organisational building blocks in place of rigid structures, and Team Topologies, which cuts teams along the flow of work. The dual operating system differs in that it expressly keeps and supplements the existing structure instead of designing a new one.

How do the eight accelerators work?

The eight accelerators are Kotter's sequence of action for the network, and they run continuously and at the same time, while his eight steps of 1996 follow one another. They derive from the eight steps of change in his 1996 book “Leading Change” and are reworded for continuous operation.

The difference from project management lies in where the work originates. A project receives budget and team from the hierarchy, together with a deadline. A network arises where people see an opportunity, commit to it and receive room to act. The guiding coalition protects that room, and wins are fed back into the hierarchy so that they become standard practice there. Without this last step the network remains a sideshow that the hierarchy tolerates and does not use.

What is the dual operating system suited for, and what is it not?

The dual operating system suits companies with a strong core business that must in addition manage strategic change, and it does not suit organisations whose main problem lies in the core business itself. The following table sets out the criteria.

Working through the table shows the purpose of the model: it is a tool for companies that need speed in change and want to keep their reliability. It replaces neither an agile transformation nor a strategy. The article on restarting an agile transformation describes how a company starts again after a first attempt. The article on run and change in one team shows how operations and further development come together in one team.

How does a company introduce a dual operating system?

A company introduces a dual operating system by starting with one clearly defined opportunity, forming a guiding coalition and letting the network grow in small steps. The following six steps translate Kotter's accelerators into an order of introduction.

1. Name the opportunity: the executive team chooses a strategic opportunity that affects the whole company and cannot be solved in one department, for example the use of AI in the customer process.
2. Form the guiding coalition: five to eight leaders from different functions commit to giving time, removing barriers and spreading wins.
3. Invite volunteers: an open invitation describes the opportunity and the expected time commitment. Those who join stay in their role, and their manager agrees to the time.
4. Start initiatives: small teams from the network work on partial tasks with their own measure and a short cycle.
5. Take wins into the hierarchy: what works enters processes and roles and receives a budget. Each initiative needs a receiver in the line organisation.
6. Measure impact: the company records how many initiatives delivered results and how many of those were taken into operations.

Step five is the critical one. Networks generate activity, and impact arises only when the line takes over results. Every initiative therefore needs a named receiver from the outset, who decides whether and how the result goes into operations. This follows the logic of the delivery perspective: a solution counts as delivered only once somebody operates it. The article on Flight Levels shows how dependencies become visible in this process.

What risks does the model involve?

The model involves three risks: the network turns into a second department, volunteers receive extra load without relief, and the hierarchy does not take over results. In the first case the network becomes an innovation unit with its own budget and reporting line, and thereby another branch of the hierarchy. In the second case commitment is exploited and the best people withdraw. Remedies are clear time windows that managers release and recognition that shows in appraisal and career.

The third risk shows when initiatives have results and nothing happens. The cause is usually missing decision rights: the network can make proposals but cannot decide on budget, processes or roles. The guiding coalition must therefore name the decision rights it delegates to the network and those it retains. Because success depends on backing from the top, a company does best to start with a topic that already has priority there.

Dual operating system with Niehues Consulting

Niehues Consulting is a consultancy for AI management and organisation design from a delivery perspective, based in Düsseldorf. Founder Marin Niehues builds organisations that deliver, in projects from VC-funded scale-ups to DAX 40 groups and in more than 20 countries on six continents. In the service area of organisation design the focus is on roles and decision paths between line and network, which are exactly the points where the dual operating system gets stuck in practice.

The approach follows the Niehues Delivery Model with its three phases of Understand, Build and Introduce. Three of its test questions matter for a second system next to the hierarchy: Who decides, who delivers, who uses? Which roles, decision paths and interfaces does operation need? Who is responsible for operation from day one? The entry point is a free initial consultation of 30 minutes, which you can arrange via the contact page.