High-performing organizations operate as empowered networks coordinated through culture, information systems, and talent mobility. Yet many organizations continue to operate according to industrial era models. Which means, many legacy practices, systems and semantics must be confronted and discarded before true change can take hold.
Nearly 50% of surveyed companies by Deloitte are actively studying new models, but only 11% believe they understand how to build the organization of the future.
What is Organizational Structure?
Organizational structure determines how the roles, power and responsibilities are assigned, controlled, and coordinated, and how information flows between the different units in order to achieve organization’s purpose.
An effective organizational structure will:
- support flow of value
- enable collaboration
- ensure information is available to those who need it
- distribute power to influence as required
- evolve continuously to adapt to changing context
The Organization of the Future
The most important factor to achieve business agility is to change how organizations are structured in order to support flow of value, rapid decision-taking and transparency.
The organization of the future is an organization that is continuosly and dynamically redesigning itself in a never-ending process in order to:
- Move faster
- Adapt more quickly
- Facilitate rapid learning
- Embrace dynamic career demands of their people
Organizing for speed, agility and adaptability
In the past organizations were designed for predictability, efficiency and effectiveness which led to complicated siloed structures, bureacracy and turf wars. Business models based on predictable outcomes are not suited to an era of unpredictability and disruption.
Instead of more efficiency, successful organizations must be designed for speed, agility and adaptability. Moving from hierarchies to networks of teams.
Only 14% of executives surveyed by Deloitte believe that the traditional organizational model makes their organization highly effective.
We have to expect a huge increase in talent mobility within and between organizations. As we experience significant membership and skills volatility it is difficult to think of stable environments with long-lived teams. We need to align towards purpose, values and goals, not identity.
One key aspect of the belief system in the agile community world-wide is the concept of long-lived team. And, I think this is something we might want to reconsider. Because, if we want business agility we need to be able to form and dismantle teams quickly. We need individual agility as well as team agility.
When a long-lived and stable team comes to an end there is a lot of resistance, mourning, pains and regrets. It is like breaking up with your spouse. Do we really need this? We might need more flexible and dynamic structures.
That is what I love about Holacracy. There is no concept of team or individual, or position. It is all about circles and roles accountable within their domain and aligned towards a shared purpose.
We have to encourage teams and individuals to meet each other, share information transparently and move from team to team.
When adopting Agile many organizations aren’t comfortable with a network of self-organizing teams and nominate leaders or managers in order to have a visible head if things go awry. They are implementing the new model with the old mindset. They are looking for someone to blame.
But, empowering people and teams doesn’t mean there is no accountability anymore. The whole team is accountable for achieving results and team members are responsible for holding each other accountable. Patrick Lencioni, in his book “The Five Dysfunctions of a Team” says:
The most effective and efficient means of maintaining high standards of performance on a team is peer pressure. One of the benefits is the reduction of the need for excessive bureaucracy around performance management and corrective action. More than any policy or system, there is nothing like the fear of letting down respected teammates that motivates people to improve their performance.
In order to increase accountability without increasing bureucracy and control, you must:
- Reward team performance – the team can create a culture of accountability. This occurs because team members are unlikely to stand by quietly and fail because a peer is not doing his or her part.
- Make individual and team goals and metrics transparent and shared for everyone to see.
- Make team standards and policies public and agreed – clarify publicly exactly what the team needs to achieve, who needs to deliver what, and how everyone must behave in order to succeed. The enemy of accountability is ambiguity,
- Design a flexible organizational and governance structure, enabling anyone to raise and view issues, escalate decisions and ultimately facilitate a collaborative environment.
- Develop a culture of you coaching and learning as opposed to telling people what to do and how to do it.
- Establish mechanisms and processes that enable and support talent mobility
- Implement continuous feedback tools like OfficeVibe.
How do we achieve Organizational Agility?
- Adopt an evolutionary organizational development framework (like Holacracy or Sociocracy 3.0)
- Organize to achieve your company’s purpose
- Organize to enable flow of value not control and compliance
- Transparent goals, activities and projects
- Free flow of information and feedback
- Individuals rewarded for their skills and abilities not position or rank
- Teams rewarded for their performance
If you don’t want to change your whole organization at once, you can create a spin-off. The parent company would just be a VC for the spin-off, the rest is managed by the new organization.