7 truths about the organization designs of the future


Posted by Tiffany McDowell on November 19, 2018.

I’ve been neck-deep in organizational theory and structural design for the last 20+ years. In that time I’ve seen the whys and hows of organizations evolve as the world around us has changed—why they exist, for what purpose, and also how they are structured to fulfill that purpose. There’s also been an element of “the more things change, the more they stay the same.” What will the future hold? Looking ahead, I believe I will see these seven truths go from early concept to standard operating procedures in my time as an influencer in the organization design space!

1. Hierarchy will remain. Will it be flatter and leaner, sure, but the value of nested reporting relationships cannot be wished away. I believe we will stop the madness of adding more and more complex governance in an effort to replace hierarchy that results in turnover, confusion, and endless meetings to figure out who can decide what. We could finally separate compensation and job grade from roles and reporting, which will allow hierarchy to work as intended. For the first time we will likely see benefits from hierarchy in terms of speed, ease of decision making, and cost-effectiveness of interactions.

2. We will build flexibility into formal structure, being thoughtful and deliberate. We will start to embrace what the digital natives have taught us while bringing to them an understanding that all organizations at a certain size benefit from clear accountability. What will probably be different is which decisions we put into traditional roles and reporting and which we leave to the network to decide. We will likely move all those decisions that get economies of scale, that are a step removed from the customer, to traditional reporting relationships, while those decisions that are close to the customer or must adapt quickly to changes in the market will be best made by those closest to the information in flexible teams.

3. Networks will be given the care and feeding they need to flourish. Organizational Network Analysis is finally having its day in the sun. The power of using “digital exhaust” plus the need to unleash organizational energy by allowing our people to form flexible teams around purposes or passions could propel network insights into the forefront of organization design. We will design and redesign structures around naturally occurring relationships, and we will aim to avoid the current traps of breaking existing relationships and isolating top talent. We will be more likely to use powerful visuals to show how organizations really work and how work really gets done, and leverage this insight to make better use of our four magic wands (hire, fire, pay, promote).

4. The real influencers in organizations will finally be recognized and embraced as more critical to transformation, corporate culture, and organizational performance than leadership. While leaders—inspirational CEOs, tone at the top, and tone in the middle—are important and their importance will remain, the real driver of change in companies is the influencers. Our internal research based on work with clients shows top leaders can impact 3-5 percent of the behaviors in their companies, while identifying the 7-10 percent of the employee population that are the true influencers can impact 75-90 percent of the behaviors. Finding the influencers and empowering them to deliver the strategy and objectives of the company is key to driving adoption and creating corporate culture.

5. Cross-functional collaboration may become a dirty word as we become more and more overloaded; intentional collaboration or intentional teaming could become the new buzzword. Throwing one more collaboration tool at the employee base and then wondering why it does not catch on will be replaced by using network analytics to drive information to those workgroups and teams that need it. Uncovering the networks, where there are knowledge brokers between silos, where there are holes, and where top talent is on the periphery and at risk of leaving the organization, and then using this knowledge to target messaging and other interventions, could become a normal course of action for leaders, HR, and consultants alike.

6. We will augment our decision processes with AI to overcome our inner failings. We will address where decision making in organizations breaks down due to human biases. Instead of just looking for tasks to automate, we will look at where cognition can be augmented. The movement to place those transactional tasks that have traditionally been in shared services or outsourced into an automated/robotics solution will evolve to using AI and machine learning techniques to augment our own cognition. Companies that do this can stay ahead of the competition by making faster and better business decisions. The question will shift from “How do we get people to overcome their innate bias against using machines so we can achieve efficiencies?” to “How do we get machines to overcome people’s innate biases so we can achieve breakthrough results through better decision making?”

7. We will understand the context that drives unwanted behaviors, and then change the context. The impact of the way organizations are designed—around, for example, products, services, geographies, or traditional functions—and how this drives siloed behavior will start to be understood. Applying behavioral science to design choices will help provide real “ahas” as to why the politics, infighting, and hoarding of information between groups is so prevalent despite great leadership and the best intentions of individuals. The value of placing decisions in the hierarchy that would otherwise require the loss of goodwill in individual relationship, and leaving those things that increase goodwill and strengthen relationships to the autonomy of teams, could become a best practice in design.

Happy designing!
Tiffany

Tiffany McDowellTiffany McDowell, is an Organization Transformation principal in Deloitte Consulting LLP’s Human Capital practice and leads Deloitte’s Organization Strategies Market Offering, where she focuses on helping companies improve performance by building organization structures to execute new capabilities through their workforce.

One thought on “7 truths about the organization designs of the future

  1. Great list Tiffany. I hope you don’t mind if I offer some of my own:
    1. We will rediscover the importance of aligning and structuring into value chains (or value streams). During the last 30 years, we have been experimenting with centralization of support functions. In the future, these will either go back into the value chain or become commodity services like accounting.
    2. We will learn “radical focus” as describe in Gary Hamel’s HBR article “the end of bureaucracy”. Modern technology empowers the small focused team operating within an ecosystem of similar teams.
    3. Human biases will still plague organizations leading to unnecessary failures. Today’s popular solutions will all fail to deal with the problem – AI, radical transparency, management development and bureaucratic governance. We will start to be more thoughtful about the biases of people we promote and recruit as described in “Think Again”.
    4. Network analysis and influencer analysis will prove to be ineffective tools, because the informal side of organizations is continually changing …. or rigidly stuck. Organization death will be seen as a necessary step in a larger process of renewal.
    5. The boss/subordinate relationship will come under deep scrutiny as new generations are less willing to put up with bad bosses. Hierarchy value analysis will take root. Many boss roles will be defined around the value that is added rather than the power in the role – as is the case of the “product owner” in an agile team.
    6. Agile team structures (full time, permanent, participants reporting to a function for skill development and career path) and agile working practices (sprints, backlogs, stand up meetings, minimum viable product) will dominate work.
    7. Organizations will continue to be less diverse as managers recognize that it is hard to manage multiple business models and operating models. The Operating Model Canvas will become as popular as the Business Model Canvas.

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