How To Future-Proof Your Company’s Organisational Design

Interview with James Kerr, Global Chair at N2Growth

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How can executives and directors transform organisational structure of their companies and maintain competitive advantage in the digital age?

Meet James M. Kerr. A leadership thought leader, author and columnist, James M. Kerr is one of today’s foremost thinkers on organisational design and culture transformation.

His day job is Global Chair, Management Consulting Practices at N2Growth.

You can connect with Jim on LinkedIn.

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Arielle: There are conflicting voices right now around the health of the gig economy.

A new JPMorgan Chase study claims that the number of participants in gig work has declined since 2014, with over 50% quitting within a year. The same study shows that 77% of temp workers would prefer a full-time job.

On the flip side, a 2018 Forrester study claims a rise in what they call Expertise-As-A-Service. These workers are independent “agents” with deep specialty expertise who move easily from firm to firm as business needs dictate.

So, which is it: Is the gig economy still on the rise, headed for demise, or simply in the process of evolution?

JK: I began writing about this topic over 10 years ago in my book, The Best Practices Enterprise. I see it as an evolution that isn’t likely to end anytime soon.

The fact is, there are over 30 million Americans working independently, and the number is growing.

People like the autonomy that comes with self-employment. Clearly, some of the “best and brightest” prefer it. This means business leaders need to face these facts and plan accordingly.

Further, the use of contracted talent is a key ingredient to establishing needed agility. Hiring what’s needed, when needed, is how the game is won in a highly competitive marketplace, like the one in place today.

(Related Article: The Future Of Work In Australia).

Arielle: How can the C-suite tap into these workers in a way that bends and flexes with the changes that are afoot?

JK: Senior management teams must promote this “gig economy” culture shift by making a conscious effort to reimagine how work can be done. That is, they need to consider how to execute with a combination of permanent and temporary staff.

Once reimagined, a primary objective for executives would be to set a corresponding culture shift into motion so to establish a workplace that attracts, develops and retains quality free agent personnel.

Once on-board, leadership teams must ensure that free agent personnel are properly trained in the organisation’s operating policies, procedures and quality standards, so that they can get up to speed quickly and deliver desired results.

(Related Article: What Apple’s Triumphs And Failures Have Taught Us About Leadership).

Arielle: This brings us to our next topic, which is organisational structure. Some, like Josh Bersin, assert that top-down leadership and complex hierarchies are going away — even already gone.

This concept of a flatter corporate structure is also touted by the World Economic Forum as a major disrupter shaping the future of work.

Is this truly the more effective organisational structure? What is the new role of the leader in this world?

JK: As I wrote in my book, The Executive Checklist, organisations can no longer afford to be top-heavy. Management bureaucracies destroy productivity and milk the creative juices out of even the most ambitious staff member – which allows lethargy and sluggishness to seep into the culture and kill the enterprise.

A flatter organisational design coupled with a team-based operating model must be adopted in tomorrow’s organisation. It empowers and motivates staff to do their best.

That said, I’m of the mind that flatter is better.

It enables agility and improves the customer experience. Zappos is a great example – their work teams have the ability to make decisions that stick without having to manage through layers of bureaucracy to get permission to get things done on the front-line.

But, you can’t adopt a flatter-at-any-cost prerogative, either.

Indeed, running flat must be earned by developing talent that is trained and possesses the experience to make wise decisions most of the time. If you don’t make a dedicated effort to properly prepare staff, your flattening efforts will fall flat in its face.

Arielle: How does this kind of organisational design impact internal career mobility?

JK: I believe that team-based operating models create even greater opportunity for internal career mobility of staff because much of today’s work requires a multi-discipline approach to be done well.

If you’re in a company that is team-based the likelihood of you being exposed to different ways of thinking and doing grows exponentially. You’re not stuck in the finance department doing budgets.

Instead, you’re working a budget for a new product launch and you’re being exposed to sales, marketing and design experts.

It’s that exposure that may create opportunities for you that you didn’t even know existed and, you may have the chance to work in a specialty that truly fuels a personal passion. So, team-based structures can be good for the individual and their careers.

Arielle: Many companies have layers of process improvement to untangle before they can begin this type of reorganisation.

What is the least painful approach to rethinking outdated ways of working to drive an “agile” culture?

JK: Agility is about adaptability. If you want to respond quickly, you have to adjust and adapt. There are four elements of adaptability that I speak to my clients about when discussing ways to become more agile.

The first is Leadership Adaptability. Your leadership must understand the company’s strengths and weaknesses, knowing how it stacks-up against its competition in regard to its offerings, price and service delivery.

Team Adaptability is next. It’s here that staff must become comfortable in embracing new ways of thinking and doing.

The third element is Change Adaptability. Change adaptability is about culture. You need one that embraces complexity and is comfortable in continuously exploring new ways to get things done.

The need to train line management to maintain its composure in times of uncertainty and respond well under pressure comprises the fourth dimension of adaptability needed to become more agile. I call that Delivery Adaptability.

Interestingly, all four are centered on people and their preferred modes of thinking and behaving. If you want to be more agile, it starts with everyone working on being more adaptable. Once that’s established we can focus on untangling the way work is performed.

Arielle: The latest study from Harvard shows that open space work environments are killing productivity and discouraging collaboration.

What’s your take on the ideal physical work space configuration for an agile culture? Cubes, open, offices, remote? A combo platter?

JK: It’s all of the above. People sometimes need “alone time” so that they can think and crank out work uninterrupted. So, private places to work are a must, be them cubes, offices or remote.

Similarly, we need spaces to collaborate and work together. That said, an ideal physical work space configuration must have break-out rooms where co-creation can happen.

I agree that open spaces are distracting. I don’t really need to hear Mary yelling at her kids over the phone, nor do I want Billy Bob sneezing all over me. Consequently, I’m not a huge proponent of that kind of workspace. However, it too has a place.

Open workspace works as an element of an ideal work setting when used to provide the capability to collocate members of temporary work teams in close proximity to enable easy communication and collaboration.

(Related Article: How To Ensure Your Remote Team Stays Highly Productive).

Arielle: How can leaders who haven’t already embraced the open space concept make the right choice to promote the culture they’re seeking?

JK: As mentioned, open workspaces have their place in organisational design and that place is in the promotion of on-demand teaming – use the open space to enable teams to work together for the duration of a project.

Let me use Valve Corporation of Bellevue, Washington as an example.

Valve is an entertainment software and technology company founded in 1996. In addition to creating several of the world’s most award-winning games, its 300 staff members have developed leading-edge technologies including the Source game engine and Steam, a premier online gaming platform.

Why I mention them is because of the way in which they leverage the open workspace concept to great results. You see, Valve outfits personnel with desks on wheels, so collaboration and free-form teaming can be enabled within their office.

If all of this sounds a bit “New Age-y,” maybe it is. However, the firm continues to deliver software that people respond to and desire.  That said, I’d proffer that Valve is on to something truly revolutionary with its use of open workspaces.

Arielle: Research has shown that millennials value flexible work arrangements. What advice can you offer C-suite leaders who are approaching this concept from a very traditional starting point?

JK: Yes, flexible work arrangements are important to millennials. But, that’s not the only thing that will serve to attract and retain Gen Y talent.

You can’t use Silicon Valley as your yardstick in measuring your work-setting and culture, either. While the work settings there are distinctive, you don’t need nap pods and juice bars to keep the next generation of worker happy.

Instead, I’d have the C-suite consider weaving other ideas into the mix. For example, rethinking notions related to rethinking or eliminating job titles – if existing titles hinder teamwork and prevent required organisational elasticity and the harnessing of social network use within the workplace – as millennials will continue to call for more sophisticated means of “staying connected.”

Further, businesses will be compelled to offer more “tailorable” and enhanced “lifestyle” benefits to employees, too.

We are already seeing concierge services and childcare and eldercare offerings emerge in benefits packages. This trend will continue as a new generation of workers seeks ways to make their life easier.

Indeed, besides creating flexible work schedules, senior leadership teams must be prepared to address these transitions in order to entice and keep talent, as well.

(Related Article: Rules For Leading Change In The Digital Age).

Arielle: Speaking of Gen Y talent, Diversity & Inclusion is very important to them and the recent Google walkout is a great case in point. It’s also a cautionary tale of what can happen when a company doesn’t live up to its purported values in the eyes of employees.

What’s the relationship between strongly stated cultural values and D&I?

JK: Not much! It doesn’t matter what a company writes about its core values. The only thing that matters is how the company acts. I can say anything about what I believe. But, my behaviour dictates who I am.

Take Uber as an example.

Last year in the face of public scrutiny over Uber’s unrestrained “Bro” culture, its CEO, Dara Khosrowshahi, published a set of new company values on LinkedIn, which featured the typical “motherhood and apple pie” stuff that you’d expect to see in a set of published company values.

Not a month later, the Wall Street Journal reported that Khosrowshahi knew about a data breach that put 57 million Uber customers’ personal and financial information at risk for months before he took the initiative to notify affected customers.

Clearly, in the case of Uber, there is a disconnect between its stated company values and its behaviour. You can’t have a value statement that says customers first and then neglect to notify your customers when you exposed their data to hackers.

The same is true with value statements and how a business operates on the D&I front. They can have all the values in the world documented on their website – that will not make them more diverse and inclusive. Their behaviour in how they recruit, hire, train, deploy and include people will.

Arielle: Right-sizing an organisation to deliver on a company’s mission / vision / culture / goals is a massive challenge for most leaders. How to get it right?

JK: The key to all of this is the thirst to become indispensable.  If you truly commit to becoming indispensable to your customer you will find the right ways to align vision, culture and organisational design and establish the balance needed to flourish well into the future.

How do you become indispensable?

There’s certainly no simple formula to follow. However, there are five things that a leadership team can insist upon, including:

  • putting the client first,
  • anticipating and solving problems before they become out of hand,
  • providing honest feedback to your people and all of your stakeholders including customers,
  • keeping all promises (stated and implied), and
  • delivering more than was promised.

If you sculpt an organisation out of cloth that is made from these five things, you will have built a company that is fully aligned and right-sized, one that will can withstand any challenge and stand the test of time.

Arielle: The half-life of a skill has dropped from 30 years to an average of 6 years—even for new university graduates.

The philosophy of “learn at school” and “do at work” is no longer sustainable and constant re-skilling will be a way of life at work.

With this increased emphasis on lifelong learning, how should leadership development departments adapt?

JK: Truly, the customary command-and-control mode of leadership is quickly becoming a thing of the past. So, leadership development content must highlight new ways to lead.

Things like servant leadership, empathy, resiliency, communicating to connect and inclusiveness should be part of what companies seek to teach new leaders.

But, how we deliver LD content must shift, too.

I wrote my latest book, It’s Good To Be King, with that in mind. The book is written in fable form to attract younger professionals. It’s not the typical, dry business text that turns many people off.

Yet, it presents over 60 leadership tips and those tips are summarised within each chapter for quick reference later on.  So, a young leader can read the book and quickly go back to it whenever they want some ideas for how to better lead their teams.

Consequently, many firms have used the text in their young leader development programs.

I believe leadership development curriculums must weave this kind of off-beat, non-standard training element into content delivery. Short videos, TED Talks and daily prompts streamed in via email and social network systems are good ways to reinforce key leadership messages presented in LD programs.

Arielle: Jim, thank you for taking the time to discuss how leaders can future-proof organisational design of their companies.

JK: Pleasure.

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