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The second stream of research that informs our emerging theory of change focuses on the modern organization. We say “modern” because it is a relatively new phenomenon. In the U.S. and most of the more economically developed world, organizational designs that we often assume have been around for millennia, if only in governments and armies, were really not created until the latter decades of the nineteenth century.

The modern organization draws upon practices and lessons from many hundreds of years of human experience but is nevertheless fundamentally different from what came before it. New technologies that began to evolve from the Industrial Revolution allowed for much less expensive production and distribution and created mass markets like never seen before. But capitalizing on these new possibilities required a scale and complexity of organization that had only begun to emerge in a few limited contexts (like textiles and railroads). This new form could accommodate not just the traditional two to ten individuals located at one site but could coordinate thousands of people disbursed geographically in ways unseen before.

To make this complex coordination work and not devolve into chaos, all sorts of new and formal systems, policies, structures, and jobs were invented. Planning was designed as a much more structured process attached to financial budgeting. Reporting relationships and jobs were written into published hierarchical organizational structures. Financial and other control systems were invented to monitor activity everywhere and to make sure results were on plan. New problem-solving techniques and communication methods emerged to make course corrections if results slipped off plan.

And a whole new set of jobs—what today we would call middle management—was created to make these more complex organizations function as they were designed. “Managers” drove “managerial processes,” which produced unprecedented efficiencies and a level of reliability that was once thought impossible with large and/or dispersed groups of people.

These new organizations were capable of change. But the default setting was filled with rules, policies, procedures, plans, and a drive toward standardization—all essential for efficiency and reliability, but all potential barriers to change. As long as the world swirled at an acceptably slower-than-today pace, all was mostly okay. Businesses and ever bigger governments struggled to adapt quickly because of the organizational barriers and because of human nature. But “quickly” by today's standards was rarely an issue—until recently.

In the past century and a half, this new form of organization has come to rule the landscape. In some contexts, it has evolved to become much more change-sophisticated. It does so with now commonly used ideas like interdepartmental task forces, less “bureaucracy,” and more cultural tolerance for new ideas. But even more so, today's organizations use new, or new versions of, strategy, digital transformation, restructuring, cultural change, M&A, Agile (the software development methodology), and more to help them adapt or capitalize on opportunities created by external changes.

These methodologies can help hugely in this new era of turbulence and uncertainty. But more often than not, even in high-tech settings where people think they have evolved way past Industrial Age organizations, our research shows the typical approaches are currently working only up to a point. Beyond that point, bodies designed for lifelong, long gone and organizations designed fundamentally for a slower-moving and more predictable world both struggle—or at least miss the big opportunities. Smart people see the need to change, and quickly. But far too often they fail to achieve their aspirations. And a feeling that you can only move at 30 or 60 miles an hour, in a context where excelling requires 100 or even 200, can be exceptionally frustrating and stressful.

But it does not have to be this way. Step 1 in changing organizations for the better is recognizing the limitations of the modern form and where those came from. Step 2 is to look at how organizations can realistically be modified to handle both the tasks of reliability and efficiency and the tasks of speed and agility, which we will discuss and demonstrate with stories throughout the book.