Organizing for the Future

In the 1960s, William Hanna and Joseph Barbera imagined the future in an animated TV series they created called The Jetsons, which was about an ordinary American family who lived in Orbit City. The family had a robot named Rosie who did the housework, and a talking dog named Astro. George Jetson, the patriarch, worked two hours per week - an hour on each of two days - and commuted in a flying car.

 

Alvin Toffler, perhaps the best known author on what the future would look like, published Future Shock in 1970, Third Wave in 1980, and Powershift in 1990. Each book described disruptions to the status quo that he expected in society, information technology, and digital information, respectively.

In his book, The Adaptive Corporation, published in 1985, he argued that organizations then were becoming more unstable and that the pace was accelerating.

If only he could see us now.

Today countless articles appear online that not only ask what the future will look like, but what we can do now to prepare for it. But as recent events have shown, the future can arrive much sooner than you expect. And that means that rather than organizing around some predicted event, you need to do create a structure that can respond to whatever demands are placed upon your enterprise.

The modern day management-speak for this is agile, which is a catch-all word that can mean almost anything depending on who you ask because every organisation is different, though it says nothing about how to structure your enterprise in order to do it.

 

Traditionally, organisational structure was centred around either function, product, customer, or process. That approach is no longer appropriate. Instead, you must organise around the value that you deliver to the entities for which it has been created. It needs to revolve around what you do for others, and not what you do in general or how you do it. And it’s worth remembering that, notwithstanding various humanitarian and environmental exceptions, no one really cares how you produce those results.

 

Who are these entities?

Traditionally, they’re referred to as customers.

Now you could argue that you’re already organized around how you deliver value to customers, or how you build value into your products, and while those things are commendable, they miss the central point that the how is irrelevant. Your customers are only interested in what the value you create does for them; the results they get for receiving it. And that’s why you have to organize everything in your organisation in such a way that it contributes to it.

You see, agile is reactive. The goal is to organise things so that when something happens, you can react quickly. But reacting is seldom a preferred choice. Instead, you want to pro-act and to do it consistently. If you organise around agility - flexibility - then you’ll never know where you are because you’ll be changing all the time. And that’s why anytime you start asking how you can organize around anything other than value - the only thing that you create, and that anyone cares about - you can be sure that you’re offtrack.

 

Customers

The first question that you must address then is, who are your customers? And the answer isn’t as obvious as you might think.

Traditionally, customers were limited to those people or organisations that bought your product or services. Today that’s no longer the case.

One way that we know this is by the way that appraisals are done. In traditional organisations, performance evaluations were solely between the supervisor and the supervised, with possible endorsements from someone a little further up the hierarchy. Multi-rater feedback changed that.

Multi-rater feedback means that suppliers, customers, peers, subordinates, and supervisors have input to the overall rating that a given employee receives. This is done ostensibly because by getting an opinion from many people, all of whom are affected by an employee, a balanced picture of that person’s performance can be established.

 

But that’s not all it means.

 

It also means that every single one of those people expect to receive value from that employee. In other words, the rating or the feedback they give reflects the contrast between what they got, and what they felt they should’ve got.

 

Why does that matter?

 

It matters because the value they got played an important role in the results that they were able to achieve because of it, and that means that anyone who is part of the appraisal process is also a customer.

 

To think of this another way, if they’re not a customer, then they have no reason to participate in an appraisal on anyone because how that person performs is none of their business. It has no bearing on their results.

 

And you must not forget the employees themselves. That’s because they, too, expect to get something from the relationships that they have with those people. They’re not simply doing what they do for a weekly pay packet. They’re doing it because of other, unspecified value that they receive from those people.

You already know, for example, that employees change jobs much more frequently than they once did. Indeed, you yourselves often wonder why candidates you evaluate have stayed for more than three to five years in one job. People stay in any job because the value that they gain from doing so exceeds what they’d lose if they left.

The value that your employees get from you includes the training, mentoring, and experience that will enable them to advance in their careers, and when they don’t get it or reach a point where they feel that they’ve obtained all that’s available to them, they leave. This is why some employees leave you prematurely. If they feel that the value that they’re getting from you isn’t helping their careers, then that will compel them to go somewhere else where it will.

That means that your performance and the performance of everyone else is being scrutinised by employees all the time. Not only do you expect the value they contribute to deliver the results that you want, but the value that you give them on a day-to-day basis will give them the results that they want.

 

What value do you want to create?

When you know who your customers are, then you’re ready to ask the second question, which is, “What value do you want to create?”

If you’re going to organise around value, then you have to know what it is.

How do you decide? By asking yourself more questions.

For instance, “What, as an organisation, do you do better than any of your competitors?” Or “What do you do that’s better than anyone else in the world, or in your world?”

When students are advised on their potential careers, we suggest to them that they consider their interests, abilities, and motivation. And exactly the same principle should be followed by organisations. Just as we discourage students from simply taking one job because the pay is higher than it is somewhere else, so organisations should do the same. There are very good reasons why some things are more lucrative than others, and that in itself means that not everyone or every enterprise should try to do them.

 

You could also ask, “Where else besides in our local area can our technology, experience, and expertise be used to best effect?”

All organisations, in one way or another, must grow, and those that fail to will die. And so you must think about how you will do that.

One way is to explore opportunities in other locations - places where what you do already can be used. This is why some organisations expand internationally.

 

Perhaps you don’t want to extend your geographical boundaries of influence. Not everyone does, nor is it necessarily appropriate. If that’s the case, then you might want to think of new markets, that is by developing a new skill with the technology you have or obtaining tangential technology that exploits existing skills.

It could be that you have employees with skills that aren’t needed for the work that they do, but which could be used to enhance the capabilities of your organisation. A skilled interviewer will know how to discover what these things are. Few people are willing to talk about what they’re good at outside of work. For one thing, companies tend to frown on too much discussion about extracurricular activities, and for another people - and with good reason - like to keep their private lives separate from their work.

 

If you don’t want to enter any new markets or new locations, then you have to ask yourself how you intend to grow. Nowadays, you have to grow just to stand still, and that’s because your competitors aren’t going to stop growing or expanding because you do. In fact, it’s when you’re not paying any attention that they’re most likely to steal the march on you.

 

Think about that.

There’s another way to look at growth. It’s by asking this question: “What do you need to get out of the business of doing? That is, what ancillary activities should you stop doing in-house?”

Organisational structure, like most things, has cycles. In the past, it was fashionable to focus on just one thing. Solopreneurs often start out like this.

As the need for more functions grew, these things were often brought in-house, usually for reasons of control. After a while, when it seemed that more resources were devoted to non-core business than core business, those same organisations divested themselves of these activities either by selling off products and services or outsourcing them.

 

Why so much change?

There are a lot of reasons, not least an expanding or contracting economy.

But here’s the thing: Just because you can doesn’t mean that you should. Just because you can do everything in house, doesn’t mean that it’s a good idea. Conversely, just because you’ve outsourced most things in the past doesn’t mean that you should necessarily do it again.

What you did before, and why you do it, isn’t relevant.

The only thing that is relevant is whether or not it contributes directly to the value that you want to create for the people who want it the most.

That’s all that matters.

 

How do you organise around the value that you want to create?

It’s only after you know who your customers are and the value that you want to create that you can even think about structuring your organisation around it.

How do you do that?

It’s up to you. It’s your organisation. There are no pat answers. Only more questions.

 

You could ask a question that bestselling author Tim Ferriss asks: “What would this look like if it was easy?”

Organisations seem predisposed to create complication where none or very little exists. It’s almost as if the people in them are thinking, “It can’t be this easy. We need to add more things to it. We need to make it harder.”

What if it was easy to organise around the value that you want to create? What if your organisation could become truly value-based? What would that look like?

 

How would you change your policies and procedures to support it?

How could you decentralise authority and reduce bureaucracy? How could you create a structure that maximised communication and rewarded collaboration?

 

If the way that you’ve always done wasn’t available to you for some reason, then how would you structure your organisation from scratch?

 

How could the new structure create more value and help those in it to do so as well?

Remember, the organisational structure is not an end in itself. It’s only a means to an end. It’s there to make the job of creating and delivering value easier; not harder.

 

What do you need to change in your organisation, and when do you plan to start?

 

Want to learn more about Organising for the future? Contact me here.

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