Organizational structure in the age of unpredictability.

Organizational structure in the age of unpredictability.

In a perfectly predictable world, what’s the best way of organising a business? My guess is that it would be run like a perfect machine. Or like a big, monolithic computer. Programmed in best in class business processes. In a world with no surprises, you could build the perfect machine, program it perfectly by complex business processes, hire only the ‘resources’ that fit perfectly into those existing processes, and hone the whole organisation to deliver the ideal input/output ratio.

In fact, this is the way most businesses are set up. At least it’s the target state of most traditional companies. This is because the world used to be much more predictable and therefore better suited to such ‘Tayloristic’ models. The underlying goal was to distribute known packages of work in the most efficient manner. Today, however, things are increasingly unpredictable and fast. And this has some fundamental impacts. In such an environment, it’s impossible to plan the perfect organisational machine.

So, rather than planning for efficiency, forward-looking businesses are rebuilding their organisational structures around agility, robustness and innovation. And as businesses adapt to this new normal, the top-down management structures of old are coming under pressure. It’s easy to see why: the centralised decision-making, business siloes and organisational hierarchies of old put barriers in the way of adaptable operations.

Organising around adaptability

What does the future-fit organisation look like? For me, the answer’s simple: businesses need to put in place a structure which gives their people the freedom to act autonomously and quickly. It’s a simple idea, but one which demands profound change.

The first step is to enable employees to accept ownership over things, again. Interestingly enough many engaged leaders are caught by surprise, how difficult this is for many of their employees. Many experiences and traditional ‘tayloristic’ principles have to be ‘unlearned’ to accept ownership. Decision ownership has to be pushed out to every single employee and allows to think and decide for themselves. Step two goes further; creating an organisation in which employees are encouraged to seek out the most important and immediate challenges for the company, and to solve them.

At Siemens, we call this ‘ownership culture’: employees are empowered to make decisions for themselves and proactively drive change. We know that we can’t “switch it on” from one day to the other. But we implement it as an increasingly fundamental guiding principle across the company. The model is like that used in Open Source software development, where developers work in loosely organised networks to solve challenges. And it’s an approach makes perfect sense in a wider business context; after all, who’s better placed to understand how to improve the business and adapt to change than the people on the front line?

Here, the role of the manager changes. Rather than telling employees what they should work on, managers act as coach and guide their teams through their work. Their role is to ask those important ‘why’ questions to help employees stay on track. It’s an incredibly rewarding role and one that we know managers embrace once they’ve made the initial adjustment from linear management processes.

Self-organised networks

At Siemens, we’ve gone further and encouraged self-organised, bottom-up communities to flourish. These are entirely created and run by employees, with absolutely no functional management oversight. Indeed, they spring up in response to challenges that are often not even on managements’ radar and earn their legitimacy through their value-creation, purpose and passion of the employees that participate in them. There is no filtering process for the best initiatives, but it is evolutionary and the best will survive.

One such initiative is Grow2Glow (G2G). The aim of G2G at Siemens is to help women unlock their potential through coaching and find the inner strength to strike out for new horizons. The programme helps match trained coaches within the Siemens family with women who request coaching. Today, some 140 qualified coaches across all areas and disciplines respond to the needs throughout the company. The role of management in this success has been limited: all we’ve done is give the network the space it needed to grow.

I still rememeber the initial days when it was not mere than the initial idea of some engaged people, who wrer not beeing completely sure whether they’d be ‘allowed’ to start this at that time. Absolutely amazing what it has grown into in less than 2 years, globally.

Another great example of the power of self-guiding networks can be seen in the development of some of our most visible internal tools at Siemens. One of the tools was intended to be a simple way of showing employees our organisational structure. Traditionally, we would have briefed a group of designers to build it based on our specification. Instead we opened the project up to our employees and told them to create the solution they wanted. As a result, we now benefit from a far more user-centric AND feature-rich tool than everything we would have imagined. And it’s not finished: through our social page employees are still contributing new ideas to make the tool ever-more relevant and useful for them — at an amazing speed!

Unlearning the past

As professionals, we’re taught to be efficient. To work only on the jobs we’ve been tasked with. To play our roles as cogs in a well-defined machine. As managers our task was to program this ‘monolithic computer’ with best in class business processes. Ideally with business processes that treat people as anonymous resources rather than individuals. But this approach is no longer fit-for-purpose. Instead, as employees we must take ownership of our work and focus change and innovation on those areas where we know it needs to be focused. And as managers, we must give employees the space and freedom to innovate while providing coaching and support to ensure their innovations thrive. We must, in short, unlearn Tayloristic approaches and embrace flatter and more fluid organisational structures. This is not easy, especially for people who are long trained in such an environment. But the result will speak for itself: even more rewarding careers and better business outcomes.

By Robert Neuhauser, EVP and Global Head of Siemens People and Leadership

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