The Flattened Organisation is the Future of Work

If there’s one word that has been used more than any other to describe the impact of Covid-19 on the future of work, it’s “accelerate”. The pandemic has dramatically increased the pace and, in some ways, the nature of change in how we are going to work.

There are some very good reasons why one of the trends to be significantly accelerated is the rate at which organisations adopt automation strategies. This will expedite the death of the industrial, hierarchical organisation structure we’ve known all our lives.

Accelerated automation strategies

Many organisations, confronted with the Covid-19 challenge of redeploying large numbers of staff to home from offices, contact centres and other places of work, have unearthed some quite salutary discoveries, including:

• The underlying business processes that they have had to adapt in line with the circumstances were often fundamentally ill-designed, inconsistent and inefficient
• Not only could they perform these processes with fewer people with, at worst, no degradation of service, but many lend themselves to automation at even lower cost and to higher quality and performance standards
• Productivity is often as high, or higher, amongst remote workers as it was when they were on site
• A combination of automation, rationalisation and remote working will reduce the future requirement for often expensive real estate.

What’s more, as acceptance grows that the pandemic is both a current reality and a future risk, many organisations will inevitably conclude that business continuity and growth will be derisked by reducing reliance on humans and making greater use of technology. It may sound a harsh view to take in the current circumstances – but it is neither unfair nor unrealistic.

We therefore expect to see many organisations accelerating the rate at which they embrace opportunities to automate, deploy machine learning, harvest the benefits of artificial intelligence and exploit other technology-driven opportunities as a result of the covid-19 experience.

The demise of the industrial organisation structure

The race to automate will fast-forward the death of the traditional industrial organisation structure – and not before time. MIT Professor Douglas McGregor wrote as long ago as 1960, in his ground-breaking book The Human Side of Enterprise: “It is probable that one day we should begin to draw organisation charts as a series of linked groups rather than as a hierarchical structure of individual reporting relationships.” It’s extraordinary that what he described is still only an emergent phenomenon sixty years later.

The structures deployed in most organisations have their origins in the command and control philosophy espoused by Frederick Winslow Taylor in the early years of the twentieth century and adopted widely, and often unquestioningly, in many organisations ever since.  Taylorism was a philosophy that had its place, but it also had its day, and that day has gone. Hierarchies, with clear reporting lines and equally clear demarcation between departments or functions, ceased to reflect reality for most organisations a long time ago. As machines increasingly, and at an ever-faster pace, take over the rules-based activities that hierarchical structures were designed for, and the human value-add becomes ever-more focused on cognitive complexity and emotional intelligence, so we must finally see a change to what an organisation needs from its structure, and McGregor’s prediction will at last become widely accurate.

The cell structured organisation

As the hierarchical structure dies the cell structured organisation will become the norm. A cell, quite simply, is a grouping of people who have a reason to be working together. This may be semi-permanent in duration (for example a finance team) or it may have a life limited by its purpose (for example a team working on launching a new product or service). Individuals will define their relationship to the organisation not by which department they are in but by the cells of which they are members. So a member of the Finance team may also be working on that product or service launch and in addition they might have volunteered to run a community outreach activity as part of the organisation’s social responsibility program. These three cells are, for now, how she or he identifies with the organisation. Over time, one or more of the cells may die, or the individual may change their portfolio and join other cells, and so the organisation evolves.

Pause for a moment and think of a few words that you’d associate with a modern, innovative organisation. Maybe Self-directing? Flexible? Adaptive? Empowered? They’re all words that sit so much more comfortably in the ever-evolving cell structure depiction of how the organisation works.

This rapid evolution will impact organisations in many ways. It will require new levels of trust between staff and their employers, a rethinking of education and development requirements and hiring criteria and a deep – generally deeper than before – commitment to shared values. We’ll explore all these factors in future posts.

Leadership

Most important of all, though, is the way that a flatter, networked organisation will place new demands on leadership style, which will be focus of one of next week’s posts in this Future of Work series. In anticipation of this post, consider this: think about the best leaders you’ve worked with.   Were they good because you were “led” by them, because you “followed” them? Or because they enabled you to achieve things you didn’t believe you could? Great leaders in the organisations of today and the future will be great because they liberate and enable, leaving those around them to take full advantage of the flattened, networked, devolved organisation in which they operate. The leader’s ability to create the environment that is right for their business will be even more important in the future than it has been in the past.

This post is part of our Future of Work series. You can read the previous post, the next post or find them all in our Future of Work section. If you’d like to discuss how we can help get you prepared for the way work and business is changing, then please contact us.