Virtual Enterprise Design: the doughnut principle

Charles Handy is one of the true pioneers of virtual working: promoting the concept of the virtual organisation long before todays enabling technologies appeared.

Handy describes his doughnut theory of management:

"The doughnut is a bagel, the sort with a hole in the middle. But this doughnut is an inverted doughnut, the hole in the centre is filled in while the doughy bit is empty. If you draw it you will see something like a fried egg, a small solid centre surrounded by a white space bounded by a roughly circular line.

In the doughnut management theory the solid core in the middle represents the essential requirements of the job, the things that have to be done no matter what. But the responsibilities don't end there. The white space is the opportunity for initiative and creativity, for going beyond the manual, for adding extra value, for getting more out of less. There is, however, a boundary, an official limit to discretion, the line beyond which one should not go.

In old-fashioned organisations there was little room for discretion in most jobs. The core filled most of the doughnut. That, however, was how most organisations used to work in the past. Everything, as far as possible, was tightly prescribed and controlled. Organisations were designed like railway timetables, with all activities neatly dovetailed together.

Then, in an ideal world, you pressed a button and it all worked like clockwork. In such an organisation you did not want the train driver to use his imagination or to try out a quicker route. Creativity was the enemy of efficiency in these organisations, or, to put it the other way round, their emphasis on efficiency became the enemy of creativity. It still is. Tidy and tight organisations stifle initiative. Imagination can seem disruptive, even to hint at insubordination."

A full essay by Handy on this topic which includes some of his other visionary thinking on organisational design is available at Turning Dooughnuts Inside Out

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