Hierarchical organisational models aren’t just being turned upside down—they’re being deconstructed from the inside out. Businesses are reinventing themselves to operate as networks of teams to keep pace with the challenges of a fluid, unpredictable world.
Fast-moving global markets and digital disruption have forced companies to innovate rapidly, adapt their products and services, and stay closer than ever to local customers. This has prompted a resurgence of interest in business organisation.
Companies are decentralising authority, moving toward product- and customer-centric organisations, and forming dynamic networks of highly empowered teams that communicate and coordinate activities in unique and powerful ways.
Many companies have already moved away from functional structures: Only 38 percent of all companies and 24 percent of large companies (>50,000 employees) are functionally organised today.
The growth of the Millennial demographic, the diversity of global teams, and the need to innovate and work more closely with customers are driving a new organisational flexibility among high-performing companies. They are operating as a network of teams alongside traditional structures, with people moving from team to team rather than remaining in static formal configurations.
A network of teams
This new mode of organisation—a “network of teams” with a high degree of empowerment, strong communication, and rapid information flow is built on several fundamental principles:
- Move people into customer-, product-, or market- and mission-focused teams, led by team leaders who are experts in their domain (not “professional managers”).
- Empower teams to set their own goals and make their own decisions within the context of an overarching strategy or business plan, reversing the traditional structure of goal and performance management.
- Replace silos with an information and operations center to share integrated information and identify connections between team activities and desired results.
- Organise these teams around mission, product, market, or integrated customer needs rather than business function.
- Teach and encourage people to work across teams, using techniques like “liaison officers” (the US military), “hackathons,” open office spaces that promote collaboration (Apple Inc. and Cleveland Clinic), and job rotation to give teams a common understanding of each other.
- Enable people to move from team to team as needed—similar to the way experts come together on Hollywood movie sets or in global consulting firms—and then ensure that people have a home to return to once a team-based project is done. This changes the concept of a “job description” to that of a “mission specialist” or “technical specialist.”
- Shift senior leaders into roles focused on planning, strategy, vision, culture, and cross-team communication.
Why is this trend so prominent now?
Two major factors are driving change.
First, the pressure to get products to market quickly, combined with a generally greater sense of empowerment among the workforce, is making small teams a more natural and productive way to work. Small teams can deliver results faster, engage people better, and stay closer to their mission.
Second, the digital revolution helps teams stay aligned. Today, teams can easily use web or mobile apps to share goals, keep up to date on customer interactions, communicate product quality or brand issues, and build a common culture. Rather than having to send messages up and down the corporate pyramid, people can access information immediately, with companies using roles like “liaison officers” to make sure teams know what other teams are doing.
Smaller organisational units tap into the human strengths of communication. Putting it simply – people know each other better.
[Source: The Global Human Capital Trends 2016 report, The new organization: Different by design]
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