Article: Moving towards leaner organizational design

C-Suite

Moving towards leaner organizational design

Do you have organization redesign on your job list priorities for 2017?
Moving towards leaner organizational design

'Innovation is not restricted to technology. A business can innovate on how it is structured too'

A static organization structure is a formidable foe of business growth. It is imperative to look at the existing structures to accelerate agility. As per a study by Mercer, 93% of business leaders across all industries plan to make a design change in their organizations within the next two years. Simpler, a bit flatter and new horizontal structures are becoming a norm in this changing time. There’s another change being seen in finance and logistic industry in which support functions are moving more towards the concept of shared services. This re-design and correction in structural expectations coupled with a better framed organizational hierarchy and processes are a bold change expected to be seen in the coming year. Let us take a deep dive into recent changes being adopted by different corporate.

Embedding verticalized ownership in flat structure

In startups, currently funding is not as generous as it used to be. Hence, the need for a completely flat structure to verticalized ownership structure is slowly being seen in the industry. Cleartax has gone from being a flat company to a two-layered structure with verticalized ownership.  With lesser choices as earlier times, startups have started to develop a proactive approach towards re-organizing their employee hierarchies for sustaining better in the long run at this VUCA world of changing times.  

Removing designations

The recent change in Tata Motors on scrapping designations to create a flatter organization with the aim of boosting creativity has taken people for a surprise. The high-flying designations of GM, AGM, VP and Senior VP are among those that will be consigned to the scrapheap. The job title of 'Head' followed by the function name will be given to all managers having a team. They aim at people to focus on work instead of their designations.  'There will be no time bound promotions now, and promotions will happen only if there are vacancies' says Gajendra Chandel, Chief Human Resources Officer at Tata Motors.

With this new mindset of 'free from designations and hierarchy', the younger employees are quite excited and looking forward towards it more constructively. However, the challenge with this in the Indian context is that our society gives predominant value on such social status symbols across all caste and creed.  Looking at such diversified culture, will this new move survive and progress as expected is still a big question.

Leaner processes and structure 

The Bristow Group has announced that it will undergo a major restructure to make its business leaner and more regionally focused. Under its restructuring plan, it will focus on two regional hubs, Europe and the Americas instead of their operational divisions. In this recent change, the restructuring has also resulted in the shake-up of leadership, with a number of key management positions being planned to be 'eliminated'. 

The great thing about not having a ton of process is that you move a lot faster. However, at the same time, systems and processes are the core of any qualitative delivery management. A young company like Voonik is on a consistent hiring spree for its internal resources trying to pitch from a bigger organization like Target, Amazon and HUL to bring in more efficient processes in place for creating effectiveness in its structure.

Decentralizing authority for Intuitive ownership

Systems and efficiency break down when people believe they're being micro-managed. Suddenly they think, 'Oh, now I can afford to drop the ball because someone will pick it up. Creating an intuitive ownership culture can help resolve such issues to a greater extent. The changes in the hierarchy have led to decentralization for increasing intuitive ownership. Decentralized systems are the future. This, in turn, fosters quicker decision-making everywhere and gives employees clarity about their ownership, responsibility in the internal systems and processes. 

Wrap up

Faster decision making, teamwork, agility to respond, simplicity in systems and processes, equips team members to deliver better outcomes. Organizations working with small, autonomous teams are much more nimble than large hierarchies.  This makes it easier to respond to change. The organization must constantly revisit its restructuring objective and try to cater to solving the issue on a longer perspective instead of a sudden rush. For such a change in switching to a new and different hierarchy altogether, the leaders need to equip employees by supporting them in career readiness and engagement. 

The concept of 'Everyone is held equally accountable, and everyone has an equal amount of say in the company' is a pretty difficult concept to actually put into place in the traditional organization structure and culture. Top driven structural re-design often lacks the definition around what behavior to leave behind or adopt in the changed setting. All these are important points that need to be taken care with utmost caution by the leaders of the organization. It’s time to shed some of our traditional approaches with the aim of creating a successful business of tomorrow.

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Topics: C-Suite, Culture, Life @ Work, Leadership

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