HR Grapevine
HR Grapevine | Executive Grapevine International Ltd

Do you need a new organisational structure?

Surviving and thriving in the digital age is no mean feat....
Do you need a new organisational structure?
NAME

COLLAPSING
THE PYRAMID

COLLAPSING
THE PYRAMID


What structure should your organisation shift to?

 

Surviving and thriving in the digital age is no mean feat. The playing field has shifted considerably in recent years and businesses must be ready to adapt quickly if they wish to stay at the front of the pack.

Companies and HR leaders can no longer rely on the same working models, patterns and paradigms of decades gone by, at least not to the same extent. The pace of change in today’s commercial world is too great to simply sit back and say, “if it ain’t broke don’t fix it.” The order of the day is to embrace new ways of thinking around structure and culture. Many companies are gravitating away from the traditional hierarchy and exploring new organisational models in an effort to accelerate decision-making, increase agility, engage their talent and enable rapid learning. The role of HR is also evolving, with more emphasis placed on optimising organisational design than ever before.

According to Deloitte’s Global Human Capital Trends study of over 10,000 HR and business leaders, 88% of companies believe they need to redesign their organisation to succeed in the digital age; however, only 11% feel fully capable of redesigning their organisation for the future. This shows a clear gulf between modern expectations and the organisational knowledge and skillsets needed to evolve in the right direction.

It’s no longer just about navigating change management or cutting costs either; more and more businesses are now thinking proactively about the best ways to facilitate greater collaboration and performance between teams. The challenge of managing this transformation falls partly into the hands of HR – and looking at any existing structural shortcomings is always a good place to start.

The task of completely transforming an already established structure, particularly within larger organisations, may well prove impossible

The flattened-out approach
“We're definitely seeing a shift away from the traditional hierarchy to one that is much more focused on open and transparent communication and collaboration,” explains Jacob Morgan, best-selling author of The Future of Work and co-founder of the FOW Community. “This isn't a new shift but it's certainly one that I think is gaining much more attention as leaders around the world recognise that traditional ways of doing things are no longer working.

This doesn't mean we need to get rid of hierarchy entirely since some structure is indeed good. It's about making organisations “flatter”, more efficient in decision-making and doing away with levels of unnecessary bureaucracy.

Self-management in practice
The idea of adopting a ‘flatter’ structure than the traditional hierarchy is nothing new, of course; though there are also a handful of organisations out there that have made great strides by dismantling tradition altogether. We can point to companies like Gore & Associates as a prime example of doing it right. The materials science giant – famed for flagship product Gore-Tex – has become a pioneering case study for structural innovation, largely due to its long-standing approach to self-management and workforce autonomy.

Speaking in a 2010 interview, CEO Terri Kelly explained the approach taken by Gore and how it sets a strong foundation for success: “Our first defining feature is that we don’t operate in a command and control hierarchy where decisions have to make their way up and down an organisation before they are actioned. Instead, we have a latticed network in place, so that you always go to directly the person you need to make a key decision.

“Along with that, we really try to resist giving specific ranking titles to our people. We have lots of people in responsible roles within the organisation, but the whole notion of a title puts you in a position where you have assumed authority over all others. We see our people as ‘associates’ rather than employees. Each person who works at Gore self-commits to what they want to work on, rather than a boss telling you what to do.”

This self-management model has proven to be a benchmark of success for alternative business structures, and it’s no surprise that many other organisations have since arranged themselves in the same vein. Video game developer Valve and food processing company Morning Star offer two more famous examples. Yet it’s also worth stating that most successful companies operating under this style of self-management have implemented that structure from the very beginning. The task of completely transforming an already established structure, particularly within larger organisations, may well prove impossible; or, at the very least, incredibly costly in terms of time and capital.

 

 

Finding the ideal structure
Technology is now firmly at the core of modern operations, allowing teams to collaborate freely and access files at any time and from any location. Communication channels are both plentiful and instant, making it easier than ever for employees to share key information and get the green light on important decisions. All of this combines to give people more autonomy and control over their workload, and that’s something that modern businesses should look to reflect in their structure if they want to engage and retain top talent.

It’s also true that more radical approaches like self-management and title-less organisations have proven a success for a number of organisations in various industries; though this may be a transformational step too far for many established businesses. That said, smaller start-ups and companies created with this foundation in mind from the very beginning stand every chance of making it work. In fact, there’s never been a better time to challenge the status quo and ensure your employer brand stands out from the crowd.

But although the structure of work is inevitably changing, there’s no need to throw the baby out with the bathwater. The real key for today’s average company is taking inspiration from the countless innovations that other companies have already begun to implement, big and small. Staying wise to what’s possible is the ultimately best way to develop a structure that’s tailored to meet every single need of both the business and the people who keep it running.

We're definitely seeing a shift away from the traditional hierarchy to one that is much more focused on open and transparent communication and collaboration

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