Disruptions in technology and changes in the workforce continue to challenge how organizations operate. Designing for the future organization continues to be a key priority for HR and business leaders.
We started this journey with Deloitte’s 2017 Global Human Capital Trends survey when “building the organization of the future” was the number one trend that respondents identified, with 88 percent viewing it as “important” or “very important.” However, only 11 percent of respondents felt they knew how to build the organization of the future.1
Source: Deloitte Global Human Capital Trends, Deloitte Consulting LLP, 2017.
After conducting our own global research, Bersin’s High-Impact Organization Design study2 identified where organizations are beginning to reinvent themselves. As business leaders begin to think about how to build the future organization, there are many topics to consider—and our recently published interactive Organization Design Framework3 takes a closer look at these. In this post, we look at three key design factors for organizations to consider.
1. Embrace a team-centric workforce design
It’s no surprise that teams emerges as a key focus point for our research. 4
Agile team structures can enable organizations to move faster and things like Organizational Network Analysis are transforming how business leaders can approach these fundamental design questions related to teams.
Our High-Impact Organization Design study revealed that 80 percent of respondents answered at least “frequently,” “very frequently,” or “always” when asked if “teams is the primary means by which work gets done.”5 Clearly, it seems most organizations surveyed are beginning to realize the benefits of team-centric design.
But shifting from an individual to a team-centric workforce design poses challenges for many organizations. According to our 2019 Global Human Capital Trends study,6 many organizations are beginning this journey from a traditional hierarchy to a more team-centric organizational model, with 31 percent of respondents saying that “most” or “almost all” work is done in teams.
Traditionally, teams have operated in siloed groups or narrowly focused hierarchical structures. Now we’re seeing a shift in organization design from hierarchical to team-centric models and more flexible structures that optimize the benefits of hierarchy while keeping teams agile. Part of this shift will challenge organizations to focus on the human elements of workforce design as these teams will require individuals to socially interact, depend on each other, trust each other, and pursue shared team goals.
Organizations will face many challenging decisions around rewards structure, decision-making structure, and operating model as they look to shift the bones of their organization to a more flexible team-centric approach. But those organizations that are already managing the change effectively are seeing benefits in productivity—53 percent of respondents reported a significant increase in performance after switching to a team-centric structure.
2. Foster accountability through transparent decision rights
Governance and decision rights cover the management processes of the organization, including how it:
- Makes strategic choices
- Allocates scarce resources
- Evaluates accountabilities
- Ensures faithfulness to stakeholder responsibilities and external governing bodies
In traditional organization design, transparency in communication and decision structures is critical for reducing things like job ambiguity and promoting organizational agility. Leaders of the organization of the future will continue to see this as a key priority in their design process.
Organizations that can foster human relationships that promote accountability will be better able to operationalize decision rights throughout the formal organization. This will continue to be a key priority in organization design to aid teams in agile decision-making and reduce role ambiguity on tasks that remain unclear.
3. Sense your environment; understand your context
As organizations continue to redesign for the future, they’ll need to continually evaluate if their design is relevant given their external environment. Many organizations are finding that their current structure is no longer appropriate and suffers from reactive versus proactive changes. For many companies, a major disruption or change has occurred, and organizational structure should have changed yesterday.
Organizations that understand the environment in which they operate and the ecosystem in which they live are more likely to treat design as a process, not just a project. These organizations are using analytics to sense their environment and are constantly reevaluating their organization design based on changes and impact from the external environment.
Source: Bersin, Deloitte Consulting LLP, 2019.
In our research, we found that 83 percent of the variance in organizational maturity could be explained by one simple question: Does your organization regularly evaluate the degree to which your structure and design is appropriate given the external environment?7 Organizations that listen to their environment and understand their business context will be better equipped to navigate the complexities of designing for the future.
As organizations continue to evolve their organization design, leaders should seek to embrace a team-centric workforce design, foster accountability through human relationships, and sense their environment. To help navigate this change, we just launched Bersin’s Organization Design Framework. This interactive framework provides a starting point for many organizations and a new lens through which to view the design process.
Bersin’s High-Impact Organization Design series will continue for Bersin members throughout the summer and fall with upcoming articles on our research findings and maturity. If your organization is innovating in the area of organization design, we’d love to hear from you! Contact Timothy Davis (email@example.com) and David Mallon (firstname.lastname@example.org) to share your story.
1 2017 Deloitte Global Human Capital Trends: Rewriting the rules for the digital age, Deloitte Consulting LLP and Deloitte University Press, 2017, “https://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html.
2 High-Impact Organization Design research, Bersin, Deloitte Consulting LLP, 2018.
3 Organization Design Framework (Interactive Version), Bersin, Deloitte Consulting LLP / David Mallon and Timothy Davis, 2019.
4 “Powering teams to better execute business strategy,” Deloitte Consulting LLP / Tiffany McDowell, PhD, and Don Miller, 2016. “https://capitalhblog.deloitte.com/2016/08/03/organizational-network-analysis/.
5 High-Impact Organization Design research, Bersin, Deloitte Consulting LLP, 2018.
6 2019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019, “https://www2.deloitte.com/content/dam/insights/us/articles/5136_HC-Trends-2019/DI_HC-Trends-2019.pdf.
7 High-Impact Organization Design research, Bersin, Deloitte Consulting LLP, 2018.
David Mallon is vice president and chief analyst at Bersin™, Deloitte Consulting LLP.