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Future Organizational Design is Agile

 

When I discuss with people or in organizational design communities what will happen in the upcoming five years, we basically come to the conclusion that we have no idea. Our business world is full of uncertainties and we only know that the digital transformation will force us to change and reinvent. Digitalization will have a mass impact to our organizational design. The information technology will not just support us going forward; in fact, it will define new businesses and therefore organizations. Over and above this, new young people–with different values and understandings regarding the work-life balance – will be entering our businesses.

   

Is Our Future Outlook Really So Scary?

Or isn’t it the right time to think about new organizational designs, which will fit our human wants much more? Without any doubt, the business world is changing due to the digital transformation, but are we changing as human beings in the same radical way? No, we are still from the same biological structure, but we just have to use our abilities in a more suitable way: It’s time to create brain-friendly organizations! 

  

The SCARF model (see NeuroLeadership) is a summary of important discoveries from neuroscience about the way people interact socially. Today, we get lost in the shuffle of data and it has become a real challenge to identify the right data to make the right decision. However, the capacity to make decisions, solve problems and collaborate with others is generally reduced by a threat response and increased by a reward response. Therefore, our management systems within our organizations simply have to be designed more upon the basis of a reward strategy. The legitimate power does not belong to the hierarchies alone which are using their power to rule the organizational system by means of management by treats. I definitely believe that we will still need hierarchical structures, but the business success will be based on the power of networks as the new players in our business world are global, social, visual and technological and have grown up in social communities. 

  

How can Agility Help Us in Organizational Design?

There are many different models for agility which exist. But regardless of whichever one we believe is the right one for your business, organizations have to dramatically improve their ability to respond and to solve complex problems. Project organizations have already been used for this purpose for a long time, but I have rarely seen successful project organizations in large corporations (for many comprehensive reasons). Talking about organizational design, I strongly believe that we have to take the following seven principles into consideration:     

  • Excellence is Based on Networks
    Let’s give networks more power to drive business. Siloed organizational structures lead to obsolescence


  • Empower the People
    The people have to become the leaders of their own. Empowerment means giving employees skills, resources, authority, motivation as well holding them responsible and accountable for the outcomes of their actions – this is much more than just delegating tasks.


  • Reward People
    Give our workforce more freedom to contribute to the business’s success. Money and functions alone have not turned out to be long-term motivational factors. Reward means giving them more autonomy in their work life.


  • We Don’t Need Managers – We Need Leaders
    Leaders have to become the enablers of organizational agility. Therefore, they need to have the highest emotional competence within the organization (see Goldman, D.).


  • Keep the Organizational Structure as Flat as Possible
    Flat organizations will limit social comparisons which very often create negative emotions.


  • People Need to Feel Safe to Share
    Use information in a non-judgmental way so that people feel safe to share, and finally:


  • Implement Platforms for Organizational Learning
    As learning is the means for an innovation process - and the capability to innovate will be of decisive importance for our future.

Following these principles and being agile as an organization will have a positive effect on performance. Based on their network characteristics, agile organizations will accelerate the communication processes and this will be extremely important for our motivation. The goal of our nervous system is to produce a response. The motivation to avoid a stimulus activates a set of distinct neural systems. More than ever, it is important to understand how our human brain works. The organizational design will minimize engagement of the brain’s aversive system and attempt to best engage the motivational system. Agility is just supporting this aspect as it assists the organizational communication process. 
  

However, seeing the importance of agile organizations, we should not overstress them with agility. The extent to which we use agile elements in our organization always depends on the people and the culture of a company – the organizational design must not be the end in and of itself. We can’t predict the future so we have to design organizations which can adapt quickly. Otherwise, they will not survive. Flexibility which we can achieve with agile organizations. Therefore, I strongly believe that the future of organizational design will be agile and this is reflected in the design principles rather than in organizational structures.    


Recommended References:

  • Kotter, P.: Accelerate: Building Strategic Agility for a Faster-Moving (2014).
  • Worley, Ch; Williams, Th., Lawler, E.:  The Agility Factor: Building Adaptable Organizations for Superior Performance (2014).
  • Folgen, M; Kaczmarek, Ch.: Organisation in einer digitalen Zeit (2016).