What the organisation of tomorrow looks like - oot.org lecture series 2


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This presentation explores what the organisation of the future looks like across multiple dimensions:
- context
- strategic imperatives
- capabilities and resources
- governance, leadership and other social practices
- organisational structural forms.

This represents a synthesis of many different perspectives and theories from different fields including leadership, change management, team dynamics, organisational behaviour and psychology, economics, management theory, organisational science and organisational design, among others.

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What the organisation of tomorrow looks like - oot.org lecture series 2

  1. 1. Bryan Fenech – Founder and Director Building the Organisation of Tomorrow www.oot.org What the organisation of tomorrow looks like?
  2. 2. Contents Introduction Comparative Analysis A Proposed Transitional Model Case Studies 9/25/2014 www.oot.org 2
  3. 3. INTRODUCTION 9/25/2014 www.oot.org 3
  4. 4. Introduction • This presentation explores what the organisation of the future looks like across multiple dimensions: – context – strategic imperatives – capabilities and resources – governance, leadership and other social practices – organisational structural forms 9/25/2014 www.oot.org 4
  5. 5. Introduction • Across these dimensions the organisation of the future is compared and contrasted with today's traditional organisations as described in Topic 1 9/25/2014 www.oot.org 5
  6. 6. Introduction • This represents a synthesis of many different perspectives and theories from different fields including leadership, change management, team dynamics, organisational behaviour and psychology, economics, management theory, organisational science and organisational design, among others 9/25/2014 www.oot.org 6
  7. 7. COMPARATIVE ANALYSIS 9/25/2014 www.oot.org 7
  8. 8. Changing context Traditional (Industrial) Organisation Organisation of Tomorrow A socio-economic era built on the technological breakthroughs of the industrial revolution A socio-economic era built on the technological breakthroughs of the information revolution (and now robotics and biotech) Increasing globalisation – opening up of vast new markets for products and services Unprecedented globalization – hyper competition, dynamic and volatile markets, short product lifecycles A world of “unlimited” resources to be exploited – the New World, Africa, India, China and the East A world of limited resources to be conserved and sustained Positivism as the dominant worldview Constructivism as a challenge to the dominant positivist world view 9/25/2014 www.oot.org 8
  9. 9. Strategic imperatives Traditional (Industrial) Organisation Organisation of Tomorrow Standardisation and repeatability – mass production Differentiation and innovation – mass customisation Size and stability Nimbleness, flexibility and responsiveness A relentless managerial focus on cost containment, reducing unit costs A relentless leadership focus on investment in new products and services Economies of scale Economies of scope “Sweating” value from tangible assets – property, plant and machinery Creating value in intangible assets – knowledge and the social capital that underpins it Beating the competition, achieving dominance within an industry or industry niche Building strategic alliances and partnerships Achieving personal financial wealth and power for a narrow set of shareholders, the capitalist project Achieving social and environmental as well as financial value and meeting a broad range of objectives for a broad range of stakeholders, the social enterprise project 9/25/2014 www.oot.org 9
  10. 10. Capabilities and resources Traditional (Industrial) Organisation Organisation of Tomorrow Strategy formulation Strategy implementation Operational management disciplines Project management disciplines Management – causal rationality, from a pre-determined goal and given set of means identify the fastest, cheapest, most efficient etc Leadership and entrepreneurialism – effectual reasoning, from a given set of means allow goals to emerge contingently over time Development and application of specialist technical knowledge The commoditisation of specialist technical knowledge and the need to dynamically reconfigure and apply collaborative knowledge resources – “dynamic capabilities” and “absorptive capacity” Developing core competencies to dominate markets and niches Value co-creation – sharing, integrating and coordinating resources across boundaries, “radical transparency” Application of the “factory” model to regularise all processes, products and services Ambidexterity – simultaneously managing dynamic and well as static business contexts 9/25/2014 www.oot.org 10
  11. 11. Implementing versus formulating strategy • A vast array of planning models and techniques has been paraded before managers over the years, and managers for the most part understand them and know how to use them effectively. However, there is a lack of execution know-how1 9/25/2014 www.oot.org 11
  12. 12. Operational versus project management Area Response Problem Addressed Delivery methods Program management, change management disciplines Coordinating and marshalling project-based activity Governance Project portfolio management (PPM) Investment oversight Functions Steering Committees, PMOs Driving cross functional integration Structure Matrix organisations, skunk works, project based organisations (PBOs) Managing both dynamic and static contexts Roles Project managers, change managers, business owners, sponsors, etc Performing project activity inhouse Standards PMBOK, Prince2, MSP, P3M3, etc Improving predictability and performance Maturity models OPM3, PMMM, CMMM-I, etc Making project based change business as usual 9/25/2014 www.oot.org 12
  13. 13. Knowledge capabilities and Resources • The ability of organisations to implement the new strategic imperatives and meet 21st century success criteria is highly dependent upon their ability to develop, share and mobilise knowledge resources2 9/25/2014 www.oot.org 13
  14. 14. Knowledge capabilities and Resources • Dynamic capability – i.e. the capability of an organization to purposefully create, extend, or modify its resource base • Absorptive capacity – i.e. the ability to recognize new external knowledge, assimilate it and apply it to commercial ends • Transformative capacity – i.e. the ability to continuously redefine a product portfolio based on technological opportunities created within a firm 9/25/2014 www.oot.org 14
  15. 15. Knowledge capabilities and Resources • Value co-creation – the ability to share, integrate and coordinate resources and sustain an honest and open dialogue (radical transparency) across organisational boundaries for mutual benefit3 9/25/2014 www.oot.org 15
  16. 16. Knowledge capabilities and Resources • Ambidexterity – the ability “to achieve breakthrough innovations while also making steady improvements to an existing business”4, simultaneously managing dynamic and well as static business contexts. 9/25/2014 www.oot.org 16
  17. 17. Knowledge capabilities and Resources • Such organisational knowledge capabilities are highly dependent upon the availability of intangible social capital resources that are generated and leveraged 'in community' – in particular, social and morale capital including trust, voluntary cooperation, and passionate identification with, and commitment to, the purpose of the organization5 9/25/2014 www.oot.org 17
  18. 18. Leadership and governance practices Traditional (Industrial) Organisation Organisation of Tomorrow Application of principles of command and control economics to internal organisation – central control of resources and planning Application of principles of market economics to internal organisation – devolving of power and decision making and free flow of resources, “internal markets” Management practices embedded with the strategic intent of command and control Leadership practices embedded with the strategic intent of empowerment and facilitation – “democratisation”, “participative management”, “distributed leadership” Rules based on rational legalistic principles – bureaucracy, sine ira ac studio A negotiated order based on principles of community, and renewal practices required to manage sustainability and success 9/25/2014 www.oot.org 18
  19. 19. Democratisation and markets • The literature on governance and leadership practices reflects the emergence of 2 highly interrelated developments – democratisation – including ‘distributed leadership’, ‘shared leadership’ and ‘participative management’ theories6, 7, 8 as alternatives to traditional managerialism – and – the application of market principles – including internal cap and trade systems, internal labour markets and ideas futures exchanges9, 10, 11, 12 as alternative approaches to centralised command and control 9/25/2014 www.oot.org 19
  20. 20. Benefits • The benefits of these approaches appear to align very closely with the need for increasing levels of social capital resources which has been identified as a prerequisite for building knowledge capabilities: – Participative management has been correlated with an increase of morale, commitment, adaptability, trust, communication and teamwork13, 14 – Shared leadership leads to less conflict and greater consensus, trust, and cohesion15 – Distributed leadership can be “a moderator that can deter corruptive tendencies by providing checks and balances capable of reducing the potential for corrupt behaviour”16 – Application of market principles correlates to improved efficiency and flexibility of resource allocation and exchange of information17, and motivation through reward systems that recognise the investment of intellectual capital on a similar footing to financial capital18 9/25/2014 www.oot.org 20
  21. 21. Structure Traditional (Industrial) Organisation Organisation of Tomorrow Hierarchy – multiple management layers Networked, cellular Segregation of labour by discipline into functional silos Integration of labour into autonomous multi-disciplinary teams 9/25/2014 www.oot.org 21
  22. 22. New organisational structures • The recent literature on organisational structure demonstrates a broad consensus that more fluid process, product or customer driven structures, and networked cellular structures, in which labour is integrated into multidisciplinary teams, are better adapted to the challenges of the 21st century than bureaucratic structures19, 20 9/25/2014 www.oot.org 22
  23. 23. New organisational structures • This is reflected in the emergence of many alternative organizational shapes most of which have been pioneered by different innovative organisations including ‘brains’, ‘machines’, ‘garbage cans’, ‘jazz’, ‘theatres’, ‘landscapes’, ‘morphings’, ‘sponges’, ‘hypermodern’ and ‘platforms’21 9/25/2014 www.oot.org 23
  24. 24. New organisational structures • Dynamic and fluid federations of enterprises, which use multiple configurations of intellectual, emotional, digital and physical assets to provide unique aggregations of products and services, will ultimately supplant large single corporations22 • Distributed governance and leadership practices require distributed spans of control and ownership structures 9/25/2014 www.oot.org 24
  25. 25. A PROPOSED TRANSITIONAL MODEL 9/25/2014 www.oot.org 25
  26. 26. A transitional organisational model CEO Chief Projects Officer Chief Operations Officer Process-based organisation Operations and execution Lean six sigma Project-based organisation Change and renewal Project portfolio management New Ideas New Capabilities, Products and Services 9/25/2014 www.oot.org 26
  27. 27. CASE STUDIES 9/25/2014 www.oot.org 27
  28. 28. Case studies Organisation Characteristics References Morningstar Participative management Hamel (2011) W L Gore Participative management Kaplan (1997), Malone (2004) p 57, http://www.managem entexchange.com/sto ry/innovation-democracy- wl-gores-original- management-model Mondragon Cooperative Participative management Malone (2004) p 61 9/25/2014 www.oot.org 28
  29. 29. Case studies Organisation Characteristics References Semco Participative management http://www.strategy-business. com/article/0 5408 Hewlett Packard Internal markets – supply chain Malone (2004) p 93 British Petroleum Internal markets – environmental targets Malone (2004) p 91 Valve Participative management http://www.gamesind ustry.biz/articles/2013- 07-08-valves-flat-structure- leads-to-cliques- say-ex-employee 9/25/2014 www.oot.org 29
  30. 30. Case studies Organisation Characteristics References Buffer Radical transparency on wages http://www.fastcomp any.com/3024306/bott om-line/why-this-startup- made-their-salaries- radically-transparent Zappos Participative management http://www.linkedin.co m/today/post/article/ 20140108093818- 2143418-holocracy-hot- trend-or-hollow-dream- in-2014 9/25/2014 www.oot.org 30
  31. 31. Visit www.oot.org Bryan Fenech Founder and Director About www.oot.org • www.oot.org is the website of Building the Organisation of Tomorrow, a networked community and set of resources to assist leaders to meet the imperative for organisational renewal • All institutions are under increasing pressure to adapt to 21st century technological and socio-economic forces. Successful leaders need appropriate frames of reference to manage these processes of transformation; however, such frames of reference are rare • Find articles, presentations, book reviews, and other resources 9/25/2014 www.oot.org 31
  32. 32. References 1. Hrebiniak, L. G. (2005) Making Strategy Work: Leading Effective Execution and Change, FT Press: New Jersey 2. Tissen, R. and Deprez, R. L. (2008) ‘Towards a Spatial Theory of Organisations: Creating New Organisational Forms to Improve Business Performance’, NRG Working Paper no. 08-04 [Online http://www.nyenrode.nl/research/publications] 3. Storbacka, K., Frow, P., Nenonen, S. and Payne, A. (2012) ‘Designing Business Models for Value Co-Creation’, Review of Marketing Researach, Vol. 9 pp 51 – 78 4. O’Reilly III, C. A. and Tushman, M. L. (2004) ‘The Ambidextrous Organization’, Harvard Business Review, April, pp 74-81 5. Dovey, K. and Fenech, B. (2007), ‘The Role of Enterpise Logic in the Failure of Organisations to Learn and Transform’, Management Learning, Vol 38, No 5, pp 573-590 9/25/2014 www.oot.org 32
  33. 33. References 6. Bergman, J. Z., Rentsch, J. R., Small, E. E, Davenport, S. W. and Bergman, S. M. (2012) ‘The Shared Leadership Process in Decision- Making Teams’, The Journal of Social Psychology, Vol 152, No 1, pp 17–42 7. Hamel, G. (2011) ‘First Lets Fire all the Managers’, Harvard Business Review, December, pp 48-60 8. Carson, P. B., Tesluk, P. E., and Marrone, J. A. (2007) ‘Share Leadership in Teams’, Academy of Management Journal, Vol. 50, No. 5, pp 1217–1234 9. McAdams, D. and Malone, T. W. (2005) ‘Internal markets for supply chain capacity allocation’, MIT Sloan School, Working Paper No 4546-05 10. Malone, T. W., Laubacher, R. and Morton, M. S. S. (2003) Inventing the Organisations of the 21st Century, Cambridge MA: The MIT Press 11. Malone, T. W. (2004a) The Future of Work, Boston: Harvard Business Review Press 12. Malone, T. W. (2004b) ‘Bringing the Market Inside’, Harvard Business Review, Vol 82, No 4, pp 106-104 9/25/2014 www.oot.org 33
  34. 34. References 13. Coffee, R, and Jones, G. (2013) ‘Creating the Best Workplaces on Earth’, Harvard Business Review, May, pp 99-106 14. Hamel, G. (2011) op cit 15. Bergman et al (2012) op cit 16. Pearce, G. L., Manz, C. C. and Sims, H. P. (2008) ‘The roles of vertical and shared leadership in the enactment of executive corruption: Implications for research and practice’, The Leadership Quarterly, 19, pp 353–359 17. Malone, T. W. (2004a) op cit 18. Miles, R. E., Snow, C. C., Mathews, J. A., Miles, G. and Coleman Jnr, H. J. (1997) ‘Organising in the Knowledge Age: Anticipating the Cellular Form’, Academy of Management Executive, Vol 11, No 4, pp 7-24 9/25/2014 www.oot.org 34
  35. 35. References 19. Miles et al (1997) op cit 20. Tissen, R. and Deprez, R. L. (2008) op cit 21. Tissen, R. and Deprez, R. L. (2008) op cit 22. Zuboff, S. & Maxmin, J. (2003) The Support Economy: Why Corporations are Failing Individuals and the Next Episode of Capitalism, London: Allen Lane 9/25/2014 www.oot.org 35