In order to win more in our respective marketplaces, and to engage employees so they contribute their best, it may be time to rethink structures. A recent article in The Economist makes a compelling case that there are significant opportunities to improve organizational results by working more as teams, instead of the traditional technical silos.
Many organizations continue to ponder how to organize and manage in ways that optimize the best in their employees. Research by Deloitte cited in this article indicates that there is an emerging trend that may change the way businesses organize. In their survey of 7,000 executives in over 130 countries, almost half of those surveyed said their companies were either in the middle of restructuring or about to embark on it; and for the most part, restructuring meant putting more emphasis on teams.
Companies have dabbled with this for decades, recognizing that they need to get outside the typical structure in order to tackle new problems in new ways. The previous responses included ad hoc approaches like the formation of committees and task forces. But companies have been slow to structurally move away from functional and technical structures. This report suggests that this may begin to change.
It seems the value derived from keeping technical functions together is outweighed by the cost of moving the bureaucracy. As a result, many companies are forming cross-disciplinary teams that can integrate technical skills into more cohesive structures that focus on problem solving. The old way of organizing does not enable the agility required to focus effectively on new products, complex problems or groups of customers. The old structures are too rigid and not gratifying for employees. This is particularly true for Millennials who have been conditioned through technology to virtually solve problems with others they may not know – adopting an “open-architecture” mindset.
“Team structures” sounds like a progressive solution, but is fraught with challenges due to its intricacies. It is difficult to determine how many teams are needed, how long they should stay intact, what the best compositions are, and how to effectively manage and lead them. Most organizations have not developed sufficient management skills for their traditional structures; team-structures requires even greater management and leadership skills. An extreme example of lurching from the old to the new is Zappos “holocracy,” where teams are self-organizing and ostensibly manage themselves. Some traditionalists have described this as anarchy or chaos. The jury is still out on whether or not Zappos is onto something that will work for everyone or even for itself. But it speaks to Jeff Bezos’ recognition that the concept of team is still evolving and needs further refinement.
One thing is clear from this research and emerging trends. The structure that worked well for our industrial era will not be effective for the technological era we are in today. New approaches and experimentation are necessary. Another truth is that our management skills were not adequate in the old structures so there will be an even greater need for leadership and management capabilities as structures becomes more decentralized.
Many companies are beginning to embrace that leadership and management are enterprise capabilities - not levels in organizations. Therefore, they are building these skills across their organizations as opposed to focusing on just the upper echelons. As an example, organizations are developing leadership skills starting with new hires, recognizing that these employees need to lead themselves and potentially projects. Over time, they will be better equipped to lead others in different structures.
This is a sea change and requires new models for developing leadership and developing organizations, along with substantial investments. The option is to do nothing; however, obsolescence from stasis is one of the greatest risks in today’s rapidly changing marketplace.
If you feel like you need to experiment but do not know where to start, give ASE’s Talent Development team a call. We can share what others are doing to prepare and develop their organizations.
Source: The Economist 3/19/16