Building the Organisation of Tomorrow

Bryan Fenech

It wasn’t that long ago … No computers Manual record keeping Manual storage and retrieval of information High administrative focus

Few phones Limited communication between workers and organisations Minimal collaboration Slower propagation of ideas and knowledge sharing

Complexity and change “All through the 1980s, companies everywhere were redefining their strategies and

reconfiguring their organisations in response to such developments as the globalization of markets, the intensification of competition, the acceleration of product lifecycles, and the growing complexity of relationships with suppliers, customers, employees, governments and competitors” (Bartlett & Ghoshal, 1990)

This process has only continued to intensify

Underlying causes Technology – increasingly rapid development and diffusion of new technologies,

particularly the ICT revolution

Globalism –

– Technology has enabled the free and rapid movement of people, goods, services and ideas across geographic borders

– This has lead to significant opportunities emerging in global markets and the internationalization of markets and industries

Socio-economic consequences Open systems – a complex web of interacting open systems

Chaos – affected by uncertainties that are beyond long term classical management, defying orderly planning and control

Self organisation – a tendency to autonomous, organic (self-steering) organisational units, based on synergy, flexibility and team work

Interdependence – complex causal relationships making it increasingly difficult to make predictions on the basis of previous experience

Discontinuity – change in existing procedures, institutions, ideologies, the emergence of completely new phenomena

Shifting strategic imperatives Innovation versus standardisation

Investment versus cost containment

Flexibility and responsiveness versus size and stability

Strategy implementation versus strategy formulation

Knowledge assets versus property, plant and machinery

What does the organisation of tomorrow look like?

The organisation of tomorrow is networked not hierarchical

cellular not siloed

embedded with the strategic intent of autonomy and creativity not control and standardisation

predicated on an enterprise logic that aims to meet a broad set of stakeholder values and aims , including ecological values, not just the narrow power interests of management and financial interests of shareholders

What does the organisation of tomorrow look like?

Research highlights that

Trust – upon which learning and knowing processes critically depend – is structurally induced in strongly networked, emergent team-based organisational structures that are driven by a mobilising vision and shared values.

Knowledge sharing is vastly more efficient in network structures – the Arab spring, lessons from al-Qa’ida

Resources allocation decisions are more rational when made using market mechanisms, where individuals on the ground are empowered to make decisions, than through command and control mechanisms where decisions are made by managers and bureaucrats who are further removed – use social media over official channels during the Victorian bushfires, environmental policy

But nothing has changed! Pre-eminent management thinker Charles Handy observes, “[o]ne of the great

paradoxes of our time is that it is totalitarian, centrally planned organizations, owned by outsiders, that are providing the material wherewithal of the great democracies”

Little heed has been taken of statements, such as that of Deprez & Tissen (2002: 1) that 'the organizations we created have become tyrants. They have taken control, holding us fettered, creating barriers that hinder rather than help our businesses', and the prediction of Boyett & Conn (1991: 109) that 'in Workplace 2000, rigid hierarchies will be dismantled, as will ceremonial trappings of power', seems naïvely optimistic in retrospect. As Jacques (2003: 137) points out, over 85% of the workforce in economically developed nations is still employed in hierarchically structured organizations

Matrix organisations – the whole field of project management can be seen as nothing more than an adaptation to ameliorate the worst failings of bureaucracies without fundamentally changing them

Enterprise logic and eras of capitalism

The concept of enterprise logic helps us to recognise that the question of choice of structure is neither strategically nor politically neutral. Different socio economic eras have favoured different eras of capitalism and different forms of enterprise logic.

– Mercantile capitalism – guilds, the renaissance

– Proprietary capitalism – individual proprietorships, early industrial revolution

– Industrial capitalism – classical bureaucracy, an embedded strategic intent of control, division of labour, late industrial revolution – the factory, the assembly line

– Managerial capitalism – the modern corporation, separation of ownership from management, relentless focus on reducing cost per unit

– Knowledge capitalism – the team, cell, project team, network and portfolio thinking

The great challenge of our time The standard hierarchical, siloed bureaucracy – the dominant institution of our day,

characteristic of almost all business and government organisations – is in a state of profound crisis

Developed to suit the conditions of a previous socio-economic era, its ubiquity is equally matched by its obsolescence in today’s era of rapid information flow, intense competition, short product lifecycles and innovation

Why today do we remain attached to an organisational form that was specifically designed for, and embedded with, the strategic intent of standardisation not innovation, cost containment not investment, size and stability not flexibility and responsiveness, control not empowerment?

Research shows that the segregation of labour into silos based on function (to promote economies of scale) and hierarchical power management practices (to promote stability and repeatability) impede the execution of strategy and militate against the development of social capital resources, such as trust, which fuel organisational learning and creativity

The great challenge of our time This outmoded form is the fundamental cause both of the global financial crises of

recent years and the ecological crises we are facing this century

The irrational investment decisions that were the direct cause of the GFC – greed, short termism, political expediency and lack of knowledge – were not taken by individuals operating in a free market but, rather, by management operating within, and subject to, the direct control and incentive systems of, militaristic, command and control structures where anti-competitive practices are the norm. While free markets are generally accepted as being superior to centrally planned economic systems, most organizations still resemble Soviet-era command economies characterized by central planning, hierarchical control systems and rigid organization of resources and assets within silos

When the profit motive is elevated above all other values, environmental sustainability and other ecological values consistently lose out

The great challenge of our time Some provocative findings reported at http://

www.anxietyculture.com/workhell.htm

o In 2002, the Work Foundation reported that "job satisfaction has plummeted", and that so-called "high performance" management techniques made workers deeply unhappy and failed to raise output

o In January 2004, a marketing director at Prudential was reported as saying: "Our research shows that an alarming number of people appear to be unhappy in their employment and unfulfilled by their work“

o A British Social Attitudes survey revealed that 6 in 10 British workers are unhappy in their jobs, with a majority reporting feelings of insecurity, stress, pointlessness, exhaustion and inadequate income

The great challenge of our time Some provocative findings reported at http://

www.anxietyculture.com/workhell.htm

o Working hours have risen in the last 20 years, on average, for UK full-time workers (as shown by the UK Labour Force Survey). This reverses a 150-year trend of declining working hours

o UK governments have known for decades that long hours are economically counterproductive. A 1916 Home Office report, Industrial Fatigue, noted that output "is lowered by the working of overtime. The diminution is often so great that the total daily output is less when overtime is worked than when it is suspended. Thus overtime defeats its own object”.

The great challenge of our time Some provocative findings reported at http://

www.anxietyculture.com/workhell.htm

o People with stressful jobs are twice as likely to die from heart disease, according to a 2002 study in the British Medical Journal

o People who work over 48 hours per week have double the risk of heart disease, according to a 1996 UK government report

o Long-term job strain is worse for your heart than gaining 40lbs in weight or aging 30 years, according to a 2003 US study

o Work kills more than war. Approximately two million workers die annually due to occupational injuries and illnesses, according to a United Nations report. This is more than double the figure for deaths from warfare (650,000 deaths per year). Work kills more people than alcohol and drugs together.

What now? Participating in and supervising research in this area

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