Redrawing Org Charts; Rethinking Organizational Boundaries: Opportunities for Organizational Design in Today’s Virtual Workplace

Virtual organization is to the advanced enterprise
of today what division of labour was to the mill and
factory of the early industrial revolution… As in
Adam Smith’s day, a new principle of organization is
transforming the market economy, and re-shaping
social institutions in the process.
Innovations in computer and communications
technology have made virtual organization
practicable… The economic advantages to be reaped
by adhering to these principles assure their eventual
dominance over traditional management ideas… As
virtual organizations take hold, life as we know it will
be utterly changed.
— Abbe Moshowitz
Virtual Organizations (2002)
These words, written a decade ago, came late in
Professor Moshowitz’s career. He had already spent
over 30 years reflecting on how organizations work,
evolve, and impact on society around them. What
was interesting to us about his research1 was not just
the depth of his study of the relationship between
technology innovation and organizational evolution,
but the impact of this relationship as a leading agent of
change, transforming our societies. Readers who have
teens texting on smartphones will relate!
This white paper is about “virtual
organizations”; why they are an emerging trend, what
this means for organizations and their personnel, and
how Organimi can help successfully bridge some of
the gaps and challenges we see organizations facing in
managing this transition to “virtual”.
Redrawing Org Charts;
Rethinking Organizational Boundaries:
Opportunities for Organizational Design
in Today’s Virtual Workplace
White Paper Series
Organimi Inc. © 2012-2013. All rights reserved.www.organimi.com

The Challenges of Being Virtual.
Are You Ready for Them?
Is the way your organization “works” changing,
compared with even a few years ago?
Is your company using or experimenting with
Twitter, LinkedIn, Salesforce.com, GoToMeeting,
Google Apps or other cloud based services?
Do you have a mixture of full and part time
employees, contractors, consultants and temps all
trying to work together?
Does your firm have challenges around employee
engagement and workplace morale?
Are concerns about “productivity”, “efficiency”
and “cost reduction” at the top of the list in weekly
management meetings?
If you answered “yes” to these questions, we believe
Organimi may be able to help.
A Continuum of Organizational
Evolution: From “U” to “M” to “V”
Do you think of “virtual organization” as a type of firm,
or as a way of working?
We think “both”. How firms are organized, and how
they operate, have both changed significantly since
2000.
In the 19th century, the unitary organizational
model (or “U model”) prevailed. Businesses were
single product, and often single location, in focus.
Their organizational models emphasized functional
competencies, such as sales, production, and finance.
Those that expanded were focused on maximizing
profit by achieving “economies of scale”.
It was during this period that organigrams – or
organizational charts -- first emerged. Org charts were
a by-product of railroads – one of the great innovations
of the 19th century incidentally – and their need to
organize geographically dispersed US operations.
Org charts were paper based, and “low tech”
by modern standards. But they were effective in
organizing operations and helping firms achieve
larger scale.
Technology innovations applied to business such as
these also resulted in significant social transformation.
Think of mail order catalogues and standard time, for
example.
In the 20th century, as organizations increased in size,
scale and complexity, the multi-divisional model (or
“M model”) was popularized at organizations like
Dupont under Pierre Dupont and General Motors
under Alfred Sloan Jr. -- considered by many to be
pioneers of the modern industrial organization.
This organizational innovation involved substituting
autonomous operating divisions or business units
within the firm, organized mainly along product, brand,
or geographic lines, and each with their own functional
competencies.
Global consumer products companies like Procter &
Gamble, Johnson & Johnson, and Kraft, and industrial
giants like General Electric, 3M and Ford, are all
products of this era of multi-divisional organization.
This evolution was made possible in part by the
separation of managerial expertise (the “act of
managing”) from operational execution (the “act of
doing”).
Large organizations also found it desirable, in the
interests of business expansion, profitability, and
innovation, to diversify into new business areas and
across new regions of the globe in the pursuit of profit.
2
Organimi White Paper Series

We have all experienced the significant resulting
growth in global economic expansion and integration
across industries, countries and entire regions of the
globe.
The corresponding social transformation has also
been significant. In the same way, the 21st century is
witnessing a new form of organizational architecture –
the “virtual” organization, or the “V model”.
Since 2000 we have seen that this model has already
successfully competed with traditional large-scale
businesses, disrupting marketplaces and driving some
traditional players out of business.
It has even begun displacing traditional M model
architectures within multinational companies
themselves, in the same way these displaced and
superseded the earlier U forms.
“Business process outsourcing”, “offshoring”,
“nearshoring”, “centers of excellence”, “partner
ecosystems” -- the modern business lexicon is full
of the jargon describing the many faces of the “virtual
organization” architecture.
Leading the way to the “V model” in a variety of
industries are companies that were considered “pesky
start-ups” or “fads” only a short while ago. Companies
such as Google, Amazon, Facebook are now
some of the most influential brands on the planet.
Today’s start-ups could become the Google or Facebook
a decade from now as the “V model” frees them from
the geographical constraints of the previous model.
They can hire or engage the best people available
anywhere in the freelance economy to achieve their
business objective, not just the best people that happen
to live where their office is located.
They can reach a global audience of buyers, quickly
and cost effectively, at a fraction of past costs, aided
by technology. They can construct and effectively
manage complex global supply chains using the same
virtual tools for connectivity, communication and
collaboration.
Books as diverse as The World is Flat, Collapse
and Wikinomics speak to the social, economic and
technology transformations under way.“Virtual” has
become its own meme in areas as diverse as virtual
reality, virtual memory, virtual teams, virtual offices,
and “virtual economy”.
But we feel that not enough attention is being
paid to thinking about what virtual organizational
architectures will mean for organizational design, and
for all of the people working in and around them.
Since so many of us define our value at least in part
by what we do at work, and since our most significant
relationships outside the home are those who we work
with, this seems to us to be an important question.
An entire industry of “cloud
based” services providers have
now emerged to challenge
traditional technology providers,
and disrupt traditional business
models, in law, in accounting,
in manufacturing, in marketing,
in education, health and many
other manufacturing and
services industries.
The virtual organizations we
see today, made possible
by the significant changes in
transportation, computing and
communications technologies,
are fundamentally changing the
way firms organize and operate.
3

What are
Yael Zofi, in A Manager’s Guide To Virtual
Teams, has written a very helpful guidei
for
business managers who want to become more
effective managers of their far-flung teams.
In her book, she describes best practises for
organizations to follow that deal with key issues
of managing virtual teams – such as trust, conflict
management, communication, and accountability for
deliverables.
Her book speaks to the emerging paradigm of virtual
organziations, and the new kinds of social issues it
creates for teams working “virtually”.
Yael’s interests are inherently social, and focused
primarily on interpersonal and behavioral factors.
She deals with the human aspect of the virtual
workplace.
She defines virtual teams to mean those where two or
more individuals are working together remotely.
We have all experienced that. More of us are now
experiencing it more often. And working with more
than one organization at the same time.
Moshowitz, an academic who thought deeply
for 40 years about the underlying social,
political, economic, technical and philosophical
implications of this transition.
In his book, Virtual Organizations, Moshowitz,
described the essence of “virtualness” as the
separation of means (managerial planning) and
ends (production implementation and execution).
He noted the increasing ability of global organizations
to “switch” across any number of different internal and
external methods, aided by technology, to achieve their
objectives.
Moshowitz saw virtualness as the capability of an
organization to consistently obtain and coordinate
critical competencies through its design of value-
adding business processes and its governance
of internal and external constituencies to deliver
differential, superior value in the market place.
Moshowitz saw emerging over the past 30 years, the
trend that we are experiencing now, over a decade later,
as a commonplace phenomenon.
But what do we notice, and what does this tell us?
The first thing we know is that this trend is pervasive
- organizations and organizational structures are
changing everywhere around the globe, whether in the
private sector, in government, in education, or in not
for profit domains. We can see this simply by the way
people work in them and interact with them. Take the
increasing delivery of government and educational
services on line for example.
Where is the evidence? It is no surprise that the
organizations that were “closest” to the technology
and communications revolution were first in, and
remain “all in” on promoting the virtual organization
archetype.
These include organizations offering virtual goods
(Microsoft’s software), virtual services (Google’s search
results), or virtual access to physical goods (Amazon) or
physical services (Expedia’s flights and hotel rooms).
However these innovations have also given rise to new
innovations across the entire industrial landscape, from
transportation through logistics to retailing to media to
medicine to government and education.
With “telecommuting”, “business process
outsourcing”, “managed services” and the “cloud”
entering daily use, these innovations, and this
overwhelming sense of “always on, connectedness”
is now firmly entrenched. Being “plugged in” from
wherever we are is an entrenched part of our workplace
reality.
The second thing we know is that this change is
inevitable. It is a self-reinforcing and amplifying trend,
feeding on the underlying business imperatives and
technology drivers that enabled it in the first place.
It is yet another of the many examples of the “network
effect” at work – a concept coined by Theodore Vail,
the President of Bell at the turn of the 20th century,
and popularized more recently by Robert Metcalfe, one
of the pioneers of the Internet, as Metcalfe’s Law.
The network effect is based on the positive,
mutually reinforcing relationship between a
product or service and its usage. The telephone,
the fax machine, the Internet itself, the smartphone,
are all examples. This network now applies to virtual
organizations themselves and their expansion.
What we see now is an entirely broader and deeper
transformation under way, where more and more
organizations are connecting virtually, and creating
virtual ecosystems, with employees, suppliers,
contractors, and customers.
Virtual Organizations
anyways?
4

Why are Organizations
Going Virtual?
This trend is global… but why is it happening?
Most people associate it with corporations and their
insatiable quest for ever greater productivity and
profits. In reality, it may be the case that the driver is
more primitive: it could be that organizational survival
is what makes this trend something that will not go
away. To survive and thrive organizations need to
eliminate friction and cost elements in all aspects of
their operations.
We may not care in big picture terms about the survival
of old style organizations….but we all know what
happens if our employer goes down, and it is something
in general we like to avoid.
“better resource utilization,
superior products and services
strengthened managerial control
over means and ends
lower costs across the board,
with reduced marketing & sales,
production and administrative
costsii
Being “virtual” is now “virtuous” for organizations because it provides a
superior economic model for them to achieve efficiency, productivity
and, ultimately, profit.
• cash balances at record highs;
• organizations are not investing
• growth rates in many sectors are slow; with intense
competition
• profit maximization is driven primarily by
• extracting cost.
• OECD organizations leveraging “process outsourcing”.
• emerging market organizations mirroring best of western
models and even leapfrogging them.
Going virtual means:
• ageing workforces with many extending their planned
retirement age.
• ambitious young workers trying to enter the workforce with
advanced tech skills.
• significant debt loads and unemployment, despite skills
mismatches and demographics.
• “Road warriors”, “Office hotels” and “Telecommuting” are
commonplace.
• increasing skills gaps are forcing creativitiy for solutions.
• declining internal engagement and trust levels across
organizations
• commuting times to work getting ever longer.
• cloud based services and utilities with always on
accessibility
• time compressed and budget constrained IT organizations
• rapid expansion in untethered mobile devices as wireless
goes supernova
• bring your own device works for you and the company
• social media meets business = social business applications
Organizations
are adjusting to
an entirely new
business climate
Workforces are
changing like never
betore
Technology
is relentlessly
connecting everyone
and breaking down
barriers of all kinds
AREA EXAMPLE
5

Cyberstats and Infographics:
What does this all add up to?
$66
Putting this all in perspective, disparate statistics
can paint a picture of challenges at work, and a
transformation already well under way:
trillion of net worth was lost in
the US from 2007 to 2009, adding
up to a whole lot of cancelled
retirement parties.
Even as markets rebound, those losses are large and
permanent for many. People are working longer
because they have to. Older workers have unique needs
and challenges for organizational engagement. Moving
in the opposite direction,
76M
Boomers will leave US
workforce over the next 20
years, taking their experience
and skills out of their employers
in the process.
How will those experiences and skills be captured and
replaced, or continue to be valued and accessible?
With only 46 million GenXers in the workforce, and
constrained immigration environments in slow growth
economies, employers will be hunting for talent and
moving Millenials up into roles that they may not be
well equipped for.
1.5 – 2 hrs
is the average commute time today in
North America.
That translates to a whole lot of weeks spent on the
road – usually in grinding, soul sucking rush hour
traffic. Governments are fiscally challenged everywhere,
meaning that even priority investments in public
transit, roads and infrastructure are hard to fund.
50%
of employees are satisfied with
their bosses, down from 70% 20
years ago.
Not surprisingly, perhaps, given that real disposable
income for many in the workforce has been flat for the
past decade; as have stock market returns.
Only half of employees feel they know their colleagues,
compared to almost 70% in the 1990s.
30% of the US workforce is now
contingent, part-time,
contract based,
largely motivated by the drive to move compensation
from a fixed to variable component of organizations’
financial obligations as a result of the economic
turbulence of the past 5 years.
Cloud based solutions have grown from $0 to a
$10s of billions + industry in the past decade, with
specialization now emerging in data, applications,
platforms and infrastructure, as well as entirely new
ecosystems of value adding, mostly virtual services.
>6billion
mobile devices as of the end of 2011, almost one
for every person on the planet.
You can try and tease from these and any number
of other statistics insights on where organizations
are heading, and where this means their people are
inevitably going. Or, you can simply ask straight
forward questions.
We think the important first question, is to ask
“how people are doing” in this fast changing work
environment.
In a recent report by respected employment
industry consulting firm Tower Watson, “employee
engagement” was explored in some detail.
The report noted that engaged employees reported
high levels of job satisfaction — they are satisfied with
their work levels, they do not report feeling stressed or
overloaded, they understand the organization’s goals
and are proud of the organization they work for and
believe that it shows honesty and integrity.
Unfortunately, the vast majority of workers reported
being not engaged at work. These findings went on
to highlight that employees who lack that emotional,
cognitive, and physical connection with their
organization report negative feelings toward their
position and organization.
41% of respondents indicated that to further their
career they would need to leave their current
employer. Less than 50% feel their leaders display
sincere interest in them.
6

What Does All This Mean for
For executives, for team leaders, and for individuals
there is clearly room for improvement in engagement
and outcomes in the typical workplace. If it is true, as
we assert, that virtual organizations are “here to stay”
and will become a more pervasive part of our every
day lives, and our work day worlds, what does all this
mean? How do these trends and “engagement” come
together?
How do we close the circle, enhancing
engagement across a diverse workforce in an
increasingly virtual workspace? How can we help?
We also believe that this transformation will require
them to equip their people – their human capital –
their full time, part time, contract, consulting and other
staffers - for this journey with the tools they need to
not only survive but thrive in this transformed work
environment.
Just as in the days of railroads, when the paper
based “org chart” first appeared, we think that new
organizational modeling capabilities are needed to
support new business models and our increasingly
virtual relationships in a more fluid organizational
environment at work.
For us, this involves re-imagining the lowly “org chart”.
And delivering a robust platform for organizational
modeling specifically designed for the increasingly
virtual organization, and the people interacting with it.
So that is what we have chosen to do, and where we at
Organimi have chosen to start.
Organizational Design?
At Organimi we believe we are
entering an exciting new period
of organizational transformation
that will alter the way successful
firms organize and align their
resources and personnel, and
integrate them with their broader
“virtual fabric” of suppliers,
partners and customers.
7

Where Does Organimi Fit in All This?
Horowitz, after many years of study, came to some
fairly pessimistic conclusions about where technology
was taking organizations (and people).
His dystopia wasn’t quite Marx, or Blade Runner, or
The Matrix, but it was a fairly bleak picture. He saw
what amounts to a “reversion to the mean” big-time
with a feudal system of power centers created by and
servicing large organizations with a decentralized,
commoditized, marginalized population of worker
peasants…that would be all of us.
At Organimi we don’t accept that vision as inevitable.
But we also aren’t complacent about where things are
heading, either.
As we mentioned at the outset, the “org chart” has been
a tool for business planning and operational execution
for over 150 years.
For most of us, it has been a piece of paper, or possibly
a link on an Intranet, largely out of date, and seldom
used.
We think that needs to change, and that
organizations, and the people who work in and for
them, will expect more, as the “V” organizational
model comes to the fore.
In the days of the traditional U or M type organization,
the org chart wasn’t much thought of, or missed. It was
mostly an HR tool.
People worked in one organization for much of their
career, mobility was limited for most of them, and, at
the end of the day, for the most part they worked with
people close to them in the same physical space.
Work engagement “just happened”.
Those days are gone.
And we’re working at Organimi
to bring people together, in
meaningful ways, within the
context of the dynamic and
rapidly evolving organizational
structures they work and live in.
Nowadays, people move regularly, may have multiple
positions and roles, and may work providing products
or services to or for several different organizations, at
the same time.
Organizations themselves are undergoing business
transformations, divestments, and other changes, on
an almost continuous basis. For organizations to work
effectively in this dynamic environment, we need to
make a better transition than we are making.
People need to be re-engaged, where they are working
today; remotely, online, and often separated by time
and space from their co-workers.
8

What Does Organimi Do?
In a business environment where the organizational
and technology imperatives promote further division of
labour and distance between people in the workplace,
it becomes more important to create more effective,
supportive, nurturing and mutually reinforcing
relationships.
Organimi makes this possible by leveraging the
best of the technology trends, while bringing
back the human face to the increasingly virtual
workspace.
We hope you will see that what we are trying to do is
take advantage of these great technology changes – the
cloud, mobile computing, and social networking tools
– and create a more meaningful experience for people
who work together to collaborate, online, in their
workspaces… starting with better org chart.
Is your organization becoming more virtual ?
Do you find that you don’t know all your work
colleagues as well as you would like to know them?
Do you wish there was an easier way to find out what
everyone does at your organization ?
If so, we invite you to try Organimi.
Set up your organization model in Organimi and share
it with the rest of your team.
If you’re being virtual from the get go, you will have a
complicated team structure. Now you need a way for
everyone to know each other and connect, collaborate,
and communicate virtually.
That’s what we do.
The accessible anywhere
Organimi platform for org charts
and photoboards. Connects and
engages your team.
Convenience
o Accessibility, from any device
o Flexibility, use from any location
o Scalability, up to any size of organization
Cost Savings
o Low cost deployment
o Funded from opex not capex
o No long budgetary approval cycles
o Efficient use of internal resources
Agility
o Fast set up
o Engaging user experience
o No training or ongoing support required
Some of the benefits of the
Organimi cloud based platform:
9

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295 Hagey Boulevard
Waterloo, Ontario
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i
Yael Zofi, A Manager’s Guide to Virtual Teams (Wiley, 2011)
ii
Reduced to their lowest common denominators of members,
relations, activities and resources, Horowitz saw clear evidence
not only of the changing structure of organizations, but of
the primary role of technology in driving this transformation.
As one commentator has noted: organizations are following
systematic switching programs, whether for inputs, suppliers,
production, distribution or personnel, to lower costs and
increase profits. Organizational innovation now identifies
the needs of production independently of the ways they can
be met. This evolution, which would not have been possible
without advanced information technology systems, for shifting
production facilities or switching suppliers.
email us info@organimi.com
call us 1-877-799-2955
visit us www.organimi.com
follow us @Organimi
Contact us to learn more or get a free trial.
Plug and play with your existing
applications and services.
DEVELOPMENT
ENVIRONMENT
API: Public API
Admin: Admin website - internal
Backend: Internal Data API
Backend-Client: Helper Lib for backend
Website: User Inface for Desktop
STAGING /
DEVELOPMENT SERVER
(same configuration
as production)
PRODUCTION SERVER
(name: “mongo”, type: “DB”)
ORM Generated Layer
ORM Extended
with Organimi
Business Rules
BACKEND
ADMIN SITE
SERVER
Backend
Client
DESKTOP UI
SERVER
Backend
Client
PUBLIC
API
Backend
Client
ADMIN UI DESKTOP UI MOBILE UI
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10Organimi White Paper Series

Redrawing Org Charts; Rethinking Organizational Boundaries: Opportunities for Organizational Design in Today’s Virtual Workplace

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