Imagine a purpose-driven organisation where individuals:
have enough role-clarity to enable autonomy and real engagement.
build thriving careers by adding value to as many roles as their talents and career development aspirations allow.
are not fixed in a job until a promotion becomes available, but instead can build a portfolio of roles that suits their skillset, interests, and capacity.
Simultaneously envision dynamic organisations that:
adapt quickly to real time changes in their environment.
only deploy members of their talented workforce to positions where they add real value.
seamlessly flex to incorporate their wider network of contractors, consultants, and gig-workers.
If this doesn’t sound like your organisation, perhaps it is time to re-think your organisational design approach.
Why might a re-think be necessary?
Organisational environments have evolved. We all recognise that complexity, speed of change and uncertainty have increased, and will continue to do so.
People have evolved too. Recent analysis by Deloitte[1] highlights how ethics and values, a sense of personal purpose, and the drive for meaningful work are essential considerations for today’s workforce.
The structure of the workforce has also changed.
The ‘alternative’ workforce is now mainstream, with contractors, consultants and gig-workers making up an increasing proportion of the workforce. This blurs the organisational boundary, which has become much more porous.
Individuals are also geographically mobile. It’s a very different world from when we had to be urged to ‘get on our bikes’ for work, and a local ‘job for life’ is a distant memory.
Business operations too have developed. Much of our work is automated and process driven. Increasingly we are assisted in our activities by automated process flows, AI and machine learning.
Our ways of working are evolving. Post Covid, there is still uncertainty about the future mix of remote and hybrid working. Indeed, the virtual world of the metaverse now looms on the work horizon.
Despite all these changes, how we organise, manage, and develop our organisations has not evolved at the same rate. We still create hierarchical organisations consisting of ‘jobs’ associated with a place in that hierarchy and a person. This approach has served us well for a long time, in fact right back to feudal times[2]. Historically, this is because:
Hierarchies demonstrate a clear control structure where more senior people direct and are responsible for the outputs of those below them in the hierarchy.
Decisions escalate upwards to those with more seniority.
Individuals have the potential to develop by climbing the hierarchy into more senior management positions – though evidence suggests that we are not as upwardly mobile as we think we are[3].
Many of us enjoy the status that comes with our job title. I remember a particularly astute investor once asking me during a due diligence visit, ‘Is there anybody here that isn’t a manager?!’
Job titles are easy to explain. The question ‘What do you do?‘, normally elicits our job title as a form of social shorthand.
However, for each of these advantages there is a darker side:
Responsibilities in a hierarchy are ostensibly clear, but in the hands of the few. This concentration of power can lead to autocratic decision making, bias & noise[4] – both personal and systemic, and single points of failure/blockage.
Hierarchies are also inherently slow – slow to decide, slow to adapt and slow to move.
When managed badly, hierarchies can also lead to silos and fiefdoms (remember those feudal lords, kings, and queens!). Paradoxically this can lead to both organisational gaps and duplication of effort.
Status can tip into self-interest (as we’re so often reminded in the business, political, and gossip columns).
Promotion can lead to personal development, but it is often the only route available. Nearly all of us can think of an example where excellence in a job has not equated to excellence as a manager. But how else can we advance?
Many organisations are deliberately opaque, so it is almost impossible to share meaningful explanations of our work
Growing complexity
There comes a ‘tipping-point’[5] in the growth of many organisations, where we no longer know the talents, interests, and capacity of everyone in the organisation – the organisation is just too big. At the same time organisational complexity expands (and accelerates) as it develops. Who-does-what becomes lost, and there are only so many dotted lines that we can fit on an organigram.
Role-based organisations
So, looking forward, how could we improve our organisations?
We can start by looking at how to design our organisations in a more agile and pragmatic way. By redefining the fundamental organisational building block as roles rather than jobs, we can design organisations as clusters of roles (teams) working to a common purpose, with aligned accountabilities. Roles may be fulfilled by multiple individuals and individuals can fulfil multiple roles.
Using this approach, every role is created with a clear scope – each one fulfils a purpose, has defined accountabilities and as such, a clear decision-making remit. We can even add a fixed term.
How does that work?
In small organisations, roles may be traditional, simple, and functional e.g. Finance, Sales, and Operations, and in very small organisations, founder members undoubtedly fulfil multiple roles. At some point in an organisation’s development, roles expand as they become beyond the capacity of an individual, or require more specialist expertise. These smaller units form teams. For example, Finance might become a team consisting of accounting, accounts receivable and accounts payable roles, or Sales may become more specialised and have a specific marketing role.
Finance evolves to become…
In each case we maintain team alignment and added value, by ensuring every new role has its own defined purpose and accountabilities.
New roles could provide a valuable development opportunity for an existing employee – in which case it may be possible for the individuals concerned to fulfil multiple roles at the same time.
These are simple examples, and it would be easy to argue that a traditional organisation chart (with a few dotted lines) could deal with this just fine. However, in my experience there is often a lack of clear accountability, decision-making, and real empowerment using this fudged approach, even in a small organisation.
Blurred edges – the porous organisation
The examples above are long-term roles, but other requirements may be more transient. Marketing might need to re-brand, or finance consider the legal structure of the business for tax management purposes. These roles will only exist as long as their purpose adds value to the organisation.
Again, this might be a career development opportunity for members of the existing workforce, or alternatively, your company could search their wider network for someone with the appropriate personality-fit, capabilities, or strengths to fill the role.
When we consciously manage our network in this way, key people are not lost in silos or personal contacts, and we can leverage a wider talent pool to fulfil our needs.
So, if we need Company Law expertise, who do we know and already trust, that has what we need?
Whether internal or external, long term or transient, the new roles will need to have a clear purpose and well-defined accountabilities.
How many organisations do you know that are equipped to leverage their internal resources or external network in this way?
This approach may be unfamiliar, but it is certainly not some anarchic nightmare. Instead it results in consciously designed organisations that are transparent, aligned, and adaptable, and that give individuals the opportunity to thrive.
Our sister organisation has focused on developing an app to make the most of this opportunity. For more information visit OrgPak.
[1] Deloitte’s Human Capital Trends Surveys (2019-2021)
[2] Frederic Laloux does a great job of explaining structural evolution in his book ‘Reinventing Organisations’
[3] Social (im)mobility is explored by Professor Paul Dolan in his book ‘Happy Ever After’
[4] These concepts are explored in ‘Noise’, by Kahneman, Sibony and Sunstein
[5] ‘Tipping Point’, Malcolm Gladwell