Accept that people are key
The companies that succeed in the global marketplace tend to operate on the assumption that the services demanded by today’s clients need to be as personalized as possible and that truly valuable employees will not necessarily trust artificially-developed corporate value systems. Such employees will contest such values just as they will established procedures (often for a good reason). As we contemplate the changes we wish to make to streamline operations, we should place particular emphasis on relations among the workers. The culture of start-ups, which are small businesses geared to creating innovative products, centers on selecting the right business partners and workers. Start-ups commonly believe that their success depends on the people. And if the people in an organization have been poorly selected, even the best idea is doomed to flop. Today, this approach inspires both managers and recruiters in top organizations.
Find true bonds in an organization
The managers and recruiters are the ones who need to answer the question that in fact everyone who believes in effective changes in business organizations should ask themselves: What brings people together? How do some people become opinion makers for others? How to spot natural team leaders? What sources do employees go to for information and which sources do they ignore? One question seems to sum up all the others: what true bonds hold together the structure of a well-working organization?
Even if such questions sound overly general, recent studies find that it is not the questions that are wrong but rather the answers to them. How does one explain that the Fortune 500 companies lose at least US$ 31.5 billion annually due to poor knowledge flows among their workers.
Noticing the deficiencies of hierarchies
Large organization systems established before the digital age have always relied on a simple model of corporate efficiency. Some of their core values focus on combating the competition, pursuing maximum profit and managing the company by objectives from the top down. Such classic priorities are commonly underpinned by rigid managerial hierarchies. Power concentrates in the hands of team leaders. Other team members operate at a single hierarchy level. They are convinced that only a small handful of executives can affect the company and the way everyone else does their jobs. A survey of managers in a typical company that employs this model would readily suggest the need to flatten tall structures and inspire collaboration across functional boundaries. It would also be likely to show that a stiff hierarchy stands in the way of exchanging information and transferring knowledge. Top-down information flows have only one source (the management) which draws all the wrong conclusions from the data streams generated below. Distortions in information flows result from the company diverging from original precepts in its operation.
Noticing the networks
Will the above observations, which are increasingly more obvious for any manager, suffice to truly overhaul an organization in an innovative manner? Probably not. After all, the root causes of problems are somewhat more complex. Still, realizing the problems is a major step in the right direction. Consider the status quo referred to at the outset of this article. Today’s management theoreticians posit that large organizations have a formal order (created by its authors) and a hidden (actual) one built in parallel by the workers. The actual order is all about interpersonal relations, authorities and leaders, acquiring information, resolving problems, setting goals and finding ways to succeed. As a consequence, a large proportion of work and collaboration takes place outside of the formal structures. It is these informal relationships and processes that become the actual bond that drives a company to succeed. The workers and managers use their experience to develop their own ways to communicate and make key decisions. In reality, we are seeing an organizational network which is none other than a structure of actual relationships established among the workers. Across the “hard” formal line structures run stronger (although hidden) ones which create more or less durable networks. The “linchpins” in these networks are the actual architects of corporate success. Viewed in this manner, the formal organization chart gives way to collaboration networks in which the workers are the builders of their own unique ways of going about their business. And theirs are often the most adequate responses to the market and the challenges posed by the competition. Such responses are in fact critical for the survival of the conservative organization.
Use the knowledge to change
If we agree that the above model describes the actual state of affairs, we will provide the manager with powerful information. The realization will of course lead to further questions. For instance, to what extent should such “spontaneous” links among the workers be allowed to flourish? How to organize “from scratch”, around a prescribed objective, a community of individuals who rely on their own experience at work?
Without a doubt, by appropriately examining the actual relations in a company and honestly answering the above questions, an organization will be enabled to succeed in devising an innovative structure. A fair analysis of the network will release the knowledge once locked in the company and help promote new actual leaders who already play a key (albeit informal) role in existing teams. Finally, the whole process may propel employees to become more engaged and the organization to become more flexible. After all, it is the organization that is the greatest value in today’s market.
The future of organizations
It is high time for organization managers to admit that their knowledge of their organizations may well be incomplete. Organizational models rely on networks of links outside the formal structures. Such networks have their decision-making hubs, their interest groups and knowledge centers. In managing companies, I often encounter all of the above. Is that wrong? Not really, that is simply the way things are. Organization theory and diagnostics increasingly seek to explore such ad hoc relationships. I firmly believe that the role of an organization’s leader is to build the kinds of environments for its workers that will support them in bringing to life projects, ideas and strategic initiatives within the framework of the natural links that evolve among them. Many multidisciplinary teams have been much more successful than homogenous groups within specific departments. Organizations managed from the network perspectives are the future. They are simply more effective. Google has discovered that long ago.