The Organisational Structure of the Future
As our world continues to move forward rapidly into the digital age, global markets are changing faster and faster, in pace with this evolution.
In light of the growing global change, organisations are faced with the imperative to adapt faster in order to meet the demands of the modern business landscape.
The evolution of organisational structure and leadership must keep pace with the rate of change in our world. Businesses that fail to embrace this change are not going to remain competitive and will lose out against more agile competitors.
Why the structure of the past doesn’t work anymore
In the past, organisational structure was usually focused on efficiency and maximum effectiveness. As a result, businesses were compartmentalised into silos with rigid structures and complex communication models.
Also, the hierarchies of the past were mostly pyramidal, which results in a top-down decision making flow. In this model, the majority of the decisions are made by a small group of people located at the top of the hierarchy and then passed down to the lower levels.
This combination of rigid structure and top-down hierarchy is well suited to a predictable economic environment, in which the methods of the past will continue to be effective in the future.
However, as the commercial environment is now becoming increasingly more dynamic and unpredictable, organisations will suffer great losses if they try to maintain the rigid structures of the past.
Adaptability is key for the organisation of the future
Instead of being based on rigidity, successful businesses of the future must be optimised for the ability to change rapidly. This requires agility, coupled with flexible hierarchies, and a culture of adaptability.
The shift away from traditional hierarchies is already starting to result in organisational structures that favour dynamic networks of teams. These teams are mostly small in size, and their composition can change rapidly as the need changes.
A dynamic network of teams, combined with distributed decision-making power, allows solutions to be delivered much faster than in the past. Of course, the dynamic nature of this structure generates many new challenges.
Creating the organisation of the future
Once you have decided to create a new organisational structure optimised for adaptability, the next question is: what is the best way to accomplish that?
Here we list 5 key tips that will help you to build the organisational structure of the future:
1. Start at the periphery
The easiest place to start experimenting with new structures is at the edge of your organisation. Choose functions that are not at the core of your business, and assemble new teams to perform these activities, based on the principles of agility and flexibility.
Once you observe success with these experiments, move on to reorganise the rest of your business.
Often these changes require profound reprogramming of traditional behaviours. Especially older staff may feel uncomfortable about these changes at first, so introduce the new ways slowly and patiently.
2. Embrace change
Innovation comes at a price. You have to divert resources away from your current way of doing things and redirect them towards testing and implementing new ways.
But investing in change is well worth the cost: without the ability to adapt, your company will be left in the dust sooner rather than later. So make sure you don’t miss the train and set aside a big chunk of your budget every year for implementing organisational changes.
Hold regular training sessions and workshops to introduce new ideas and practices, and appoint “change managers” who implement and track change initiatives.
3. Combine flexibility with accountability
The more you switch towards decentralised decision-making structures, the more important it becomes to make people accountable for their decisions.
In the past, if employees carried out their manager’s instructions dutifully, they could not be held accountable for the results, since they were just doing what they were told.
But as people are given more freedom to make their own calls, it is essential to build accountability into the system. This requires reporting systems that monitor performance in real time, and rapid feedback if something isn’t working as it should.
4. Rely on real-time performance monitoring and reporting
For those who grew up with rigid hierarchical structures, building a network of dynamic groups sounds like inviting chaos.
And indeed, there is a strong element of chaos in this system, as hundreds, or even thousands, of staff members, are continuously making decisions that have the power to affect overall business performance.
But instead of trying to control this chaos with top-down rules, a better way to manage it is with real-time performance monitoring. That way you can see what is working, and what isn’t, and use this as rapid feedback to the relevant staff members.
5. Make adaptability a core organisational value:
As you start to embrace the new way of organisational structure, one way to make sure it becomes integrated into the DNA of your business is by including it in your organisational values.
Your organisational values set the tone for everything that goes on in your company. Including agility, adaptability, and flexibility in those values, goes a long way towards building a corporate culture that creates change, instead of resisting it.