Organizational Misfit.

The Future Does Not Fit in the Containers of the Past. Edition 217.

The future organization does not fit in the containers or the mindsets of the past.

Until around January 2020, most companies operated under the following five assumptions or beliefs:

1. The organization gives structure and directs work.

2. Tenure and experience are critical to advancement.

3. Most of the work is done inside an organization.

4. Fairness requires a common set of rules and ways of work­ing that apply to all.

5. Most people are full-time employees of the company.

Here are beliefs that have already begun to replace current beliefs and will by the end of this decade completely supplant these traditional ones:

1. The organization enables talent to create structure and direct work.

2. Expertise and constant learning in a changing world are more highly valued than tenure/experience.

3. Most of the work is done outside an organization by sup­pliers and by accessing talent as needed.

4. Fairness means customizing programs for each talent and giving everyone equal access to those programs.

5. Most staff are either contract workers, freelancers, or fractionalized employees.

Because of these new beliefs and assumptions, organizations must rethink how they design everything, from compensation systems to decision-making processes.

Dump the charts!

To create a redesign that is effective now and for years to come, we need to think about structure more broadly than is typical. Most people think of business structures from an organizational-chart perspective. They envision boxes and connecting lines that indicate who reports to whom or the flow of goods and services from the company to various markets. That’s why when people talk about restructuring, they focus on things like flattening the organization and eliminating some of the lines or streamlining the supply chain.

While all of this is important, it’s just part of what needs to be redesigned. An organizational chart is a two-dimensional view—I’m advocating a three-dimensional redesign.

For years, we’ve fooled ourselves into believing that the orga­nizational chart represents how the organization works. That was okay in less complex, less volatile times, but it’s no longer accept­able. Consider that organizational charts and maps indicate how leaders want the company to operate, but the reality often is quite different.

For instance, the maps and charts document zones of control rather than zones of influence. A title represents a position that may be vested with authority but not necessarily the authority to determine how work is done. These charts also impose clarity where there often is none. Business is messy, and operations often shape-shift based on circumstance, ignoring the flowchart. The official organizational structures are also limited in scope, failing to account for all the external partners, freelancers, and other outside groups that have become necessities.

Consider the static nature of organizational design, driven by internal factors (that is, areas of expertise) and client/customer categories. In an increasingly globalized world filled with new marketplaces and transformed by technology, this design must be more organic, adapting to external stimuli.

Tenets of organizational design.

On the most basic level, it means they must design structures from the outside in rather than the inside out. In a fast-changing world, companies must create their processes and procedures based on marketplace realities (that is, emerging competitors and chang­ing talent mindsets) rather than relying on “the way things have always been done around here.”

They should also embrace multiple models of working rather that a single model. Given the multiplicities in workplaces today, models need to differ based on country, competition for talent, and whether the focus is on current business or innovations.

And finally, it means outcomes and goals take precedence over process and control.

Financial results, customer satisfaction, and talent attraction/retention should take priority over following strict procedures or maintaining tight control about how work is done.

Design discussed as a singular object is a mistake. Plural de­signs make a lot more sense.

For this reason, redesigning the structures must take the follow­ing factors into consideration:

Customer benefit. This may seem obvious, but company design often reflects internal requirements first and customers second. Given the increasing diversity and changing needs of customers, organizations should consider creating different designs for different customers. This might mean co-locat­ing with a customer or integrating with customer suppliers

Talent advantage. In the past, points of differentiation in­cluded price, service, innovation, and so on. Today, the main differentiator is talent. Companies must organize in ways to ensure that their talent is satisfied and growing. Considering that talent often is spread across different locations, possesses different work-style preferences, and represents a wide de­mographic range, one organizational model doesn’t fit all. Instead, the model should accommodate the full range of talent.

Change adaption. The previous two points allude to this one: organizational design must be flexible, able to shift as changes occur. Competitors change. Laws change. Markets change. The design, therefore, must anticipate that these shifts will occur and be created in such a way that adapting a policy or revamping a process isn’t a big deal. This is an or­ganic, evolving approach to design (versus an artificial, static one). To deliver on strategy, one needs to update the design continuously.

Permeability. Traditional designs are closed systems. Today, they need to be open. They must be capable of connecting and fusing with other companies in an increasingly con- nected, fast-moving world. A company and its deliverables grow by combining capabilities and products from different external firms or being part of those other firms’ deliveries.

Trust a key to Organizational Re-design.

To commit to this type of redesign requires trust—management must trust talent and teams to determine the best ways to drive financial results, customer satisfaction, and talent attraction and retention. By restructuring roles, talent takes the initiative while management guides and coaches.

This trust extends to empowering teams to solve problems and capitalize on opportunities in ways that make sense for their markets (rather than everyone follow­ing the mandate from headquarters). Management’s restructured role involves setting parameters—they grant their people freedom within a framework. They know where the guardrails should be erected to prevent teams from getting in legal difficulties or taking unreasonable risks.

Is your organization biased toward yesterday or tomorrow?

While many organizations have taken steps in this direction, most are not there yet. To assess redesign progress, the following questions might help:

Does your company possess agile systems and processes? Is it flexible when it comes to how and where work is done and how partnerships are initiated?

Can you deliver customized products and services? Does your organizational structure support personalization or is one particular system or process mandated?

Are the policies and protocols of your organization designed to facilitate trust among teams and customers?

This is a an extract from 2 pages of a chapter called Redesign the Structures from Rethinking Work which has been called “that rare book that simultaneously helps you look at the world, your work, and your life in new ways.”

CEO’s, Deans of Schools, Heads of Talent who have had access to the book believe it is the most comprehensive, yet distilled, highly realistic and yet future forward take to every aspect of work from strategy to talent to technology to financials. Available for pre-order. Turbocharge your career, unleash your teams and reinvent your company’s tomorrow! Learn more here.

Rishad Tobaccowala has spent four decades rethinking and reinventing and now works across the globe helping leaders, teams and companies thrive in transformational times. More here: https://rishadtobaccowala.com/