This week just gone was peppered with discussion on new types of organisation designs and questions on whether traditional organisations can morph to a new design – flat, networked, nodal – or are they destined to stay hierarchical, bureaucratic, several levels structures?
Lee Bryant asks 'What is the use case for organisational structure?' He says that 'the rise of social technology in the workplace creates new possibilities for how we organise work.' But reading through various fascinating links he adds to his piece and from these to further links to other articles on the topic it seems that the new possibilities aren't being realised.
Certainly I've noticed the big, long established organisations I work with having huge difficulty in exploring or adopting any of these new possibilities.
Reasons for sticking with the way big organisations typically organise work in hierarchies, bureaucracies, management layers, and rather inflexible systems could be due to the desire for 'legibility.' Small organisations can be flat and flexible because they are 'legible', as they get bigger and more complex that 'legibility' decreases and a desire to 'simplify' in order to return to legibility takes over. The drive towards simplification is evident in many management ideas – seven steps, five principles, four box grids, etc. Venkatesh Rao in A Big Little Idea Called Legibility explains the inherent dangers of it and also offers four reasons why it remains attractive.
Rao's idea of legibility is taken in a slightly different direction David Manheim in Go Corporate or Go Home. He (Manheim) makes a brilliant case in saying that the way information is held in databases defines the organisational structures. Read it and see whether you agree with his hypothesis. (Since the advent of PowerPoint I've thought that Microsoft defines organisation structures by offering so few structure related graphics).
Bryant offers Haier as an example of a company that has the ability to both stay legible and reinvent itself to take advantage of new opportunities. It has been through reinvention three times as new technologies appear and is now attempting a fourth one – that takes it a far remove from hierarchy and bureaucracy – to become 'platform' based in the way described by Bryant.
'It makes more sense for an organisation to maintain a single, conservatively managed shared services platform to provide all the common services required, and then allow individual teams or business units freedom to create their own apps on top, than it does to maintain a one-size-fits-all vertically-integrated software stack that forces all parts of the organisation to tolerate a lowest-common-denominator inflexible product, which is traditionally how IT functions have tried to meet the many and varied "requirements" of their business.'
In this platform model 'Each employee of Haier has the opportunity to become an entrepreneur who can start up his or her business on Haier platform to directly create value for customers.'
Whether Haier can do this and how it would fare under a different CEO are both matters of conjectures. However, a strategy+business article on the company suggests that 'much of the credit for Haier's success accrues directly to Zhang Ruimin, the company's CEO since 1984'. There are many other companies whose fortunes have dipped when a single minded leader departs. In many instances these have been asked back to 'save' the company. See a list here.
Not all organisations can take the Haier route. Most organisations of any size have a hierarchies, layers, and organising structures that make them 'legible'. But how can they stop being hidebound bureaucracies, and usefully take advantage of new technologies? Several ideas are being tried by various companies. They include:
- Culling senior managers (reducing management layers)
- Developing models of "self-organisation" or "self-management" on a larger scale than previously attempted
- Changing the ratio of employees to managers (wider spans and fewer layers)
- Dividing into smaller units that are easier to manage and motivate.
- Running projects over shorter cycles also keeps the build-up of bureaucracy to a minimum
- Giving smaller teams more independence and granting more autonomy to workers
- Running "hackathons" -— internal competitions -— to find novel ways of solving operational problems.
- Developing leaders who continually look at subtracting unnecessary rules and procedures
Is your use of better tech enabling it to become a better organisation? Let me know.
Naomi Stanford 