Now with the launch of a vaccine against COVID-19 on the horizon and offices across the globe opening up again, revamping the organizational design has been a topic of considerable interest. As we enter 2021, there is widespread consensus that we will be returning to ‘the new normal’ and not the ‘normal’ of the pre-pandemic era. Leaders across the board are questioning how will the ‘new normal’ eventually set in. Reflecting on the lessons learned from 2020, this article presents a few insights that can help us shape the answer.
These are collective insights drawn from various stories of innovation, resilience, and survival across industries and geographies. These stories include firms restructuring their supply chain and service delivery models, cosmetic companies manufacturing sanitizers, and almost every clothing brand launching face masks. All of this was accomplished within the limited time that was available to organizations to meet the challenges of pandemic and service novel customer demands.
COVID-19 has accelerated the pace of technology adoption across business entities and challenged many preconceived notions about the effectiveness of working from home. Businesses will hence need to use these lessons in future organizational design.
Adaptability for Talent Utilization: The COVID-19 pandemic has highlighted the need for incorporating flexibility into the workforce. It is no longer feasible for organizations to have employees performing functions with a narrow scope and limited visibility. In addition to a deep understanding of their functional areas, the employee of tomorrow needs to have a broad understanding of other departments and functions, which would enable them to visualize the impact of their contribution to the wider organization and enable mobility in the role.
One way to enable this transition is to start with cross-skilling programs that give the existing team exposure to other teams and functions, thereby enabling them to have that holistic view. The long-term solution is to alter the organizational design to allow for role swaps, changes, and cross-team movements in multi-functional teams.
While these recommendations are easier to implement in knowledge and technology-based organizations, it would be harder for industries like manufacturing, healthcare, and education. Therefore, context and cultural relevance need to be factored into such organizational design change plans.
Design for Shorter Time to Market: The second major lesson that companies have learned from the COVID-19 pandemic is the need for having a shorter time to market new products. Companies across industries raced to innovate to serve the short-term opportunities that the pandemic brought on (think of surface cleaners, ventilators, masks, etc.) or explore new ways to serve customers, all of which required fast decision-making.
The lesson here is to structure the company in such a way that different departments have autonomy in decision making in areas they lead, instead of depending on a hierarchy of approval processes and decision cycles that would hinder their resilience.
Here again, organizational context plays a crucial role where any organization redesign has to start as a limited experiment with new products and processes before altering the existing decision-making process.
Build Strong Partnership Ecosystems: While disruptive innovators thrive on niche technologies developed in-house, the pandemic has established the need to have robust partnership ecosystems. One example of this is Google’s collaboration with Samsung. Factoring in the new reality of work from home, this partnership will now ensure that smart home devices of both organizations can be operated from a common platform (such as a single app). This is illustrative of a shift from being the technology creator to a secondary enabler of technology.
Organizations thus need to reassess what their core strengths and strategic priorities are and focus their energies on them. This change will enable a leaner and more efficient organizational design while putting technology and core skills at the center of the strategy. The organizations will leverage partnerships and manage all other activities.
When developing this partnership ecosystem, it is essential to consider the geographic span and other limitations that could create unprecedented constraints, like the one experienced during the nation-wide lockdowns of 2020.
Engaging Distributed and Diverse Workforce: With the ability to work from home now an undeniable necessity in several industries, firms will be exploring different employment contracts. For instance, the share of the gig workforce in organizations is likely to increase. Companies need to align their policies and practices to motivate, align, and engage this distributed and diverse workforce.
Such overhauls will stretch HR to innovate and adopt new practices while challenging the capabilities of managers to tackle this new normal. Organizations need to enable their managers to look beyond their role of supervision in this new context.
Placing Technology at the Core: Companies that were the worst hit were those that had not deployed technology solutions to enable their operational tasks to happen digitally. The lesson for organizational design is to create an ecosystem that leverages technology.
Thus, in the corporations of tomorrow, the virtual interface will become the new reality. Organizational design has to take cognizance of this fact, which can imply changes in hiring and promotional practices, as location and other physical constraints disappear when fulfilling workforce needs.
In conclusion, businesses need to relook at organizational design that demonstrates agility to adapt in the VUCA world, leverage technology, and collaborate cross-functionally.
All these structural changes will entail a widespread overhaul of well-established policies and practices, all of which can take a toll on both the employees and the management. Also, these changes will result in prioritizing investment in the business continuity processes and human resources function. However, considering the tests that the pandemic posed for organizations in 2020, they would be worth the investment of money, time, and effort.
A streamlined and persistent effort has to be made by the top management to drive these change initiatives, and by the middle management in driving the adoption of the new policies. Carefully drawn up communication plans can help ease the transition that employees might need to go through, with the human resources function available to facilitate adoption.