Study Success in Change 2019
Good organizational design can offer companies a competitive advantage that cannot be copied. However, existing control models are increasingly reaching their limits as they have to take on more and more complex tasks. In consequence, future-proof companies will require an organizational form that will allow a balance between flexibility and stability.
The key question that any organizational design must ask itself is: What problem does this organizational structure answer? So when executives complain about long decision-making paths, lack of cooperation, perpetual reaction times or listless employees, they should pay more attention to organizational issues and not approach these topics solely from a technical-operational perspective.
Although the increasing complexity (incidentally not to be confused with complicatedness) of tasks affects all companies, the larger a company is, the greater the challenge will be to promote efficiency and flexibility while at the same time integrating necessary executive and employee development. Telekom, for example, created many smaller innovation teams within the Group years ago, which have taken on a pioneering and experimental role in terms of digitization and innovation. Another example is the traditional company Klöckner, which has integrated its own startup Klöckner.i into the parent company.
IMPROVE WHAT ALREADY EXISTS WHILE SEEKING SOMETHING NEW
In traditional medium-sized companies, the problems are certainly similar. But since the level of resources here is usually much tighter, smart solutions are especially in demand. However, the goal is the same for all companies: ambidexterity – the ability to improve what already exists while actively seeking new things.
Quick wins can often only be achieved along the way by merely paying more attention to the organizational design and thus inevitably triggering a change in the management structure. Because even if the new leadership system remains undifferentiated at the beginning, executives will be prompted to regularly review the organization’s performance and make changes if necessary.
THE KEY LEVER OF AN INNOVATIVE CULTURE
Companies consistently require leadership, as it is indispensable for the success of the organizational design. This is the only way to foster the projects and products of innovation hubs, incubators or start-ups in a focused manner and integrate them into the parent company. Companies and executives have the responsibility to create the necessary structures. This organizational design is the key to creating a culture of innovation that also delivers results.
In the medium to long term, companies will evolve into network organizations, in which employees will for the most part work self-organized on the basis of common goals or a target system (collaboration). The inclusion of customer and competitor perspectives (co-creation, co-option) and a consistent functional focus towards customer and market perspectives will complement the organizational design. At both the management and employee level, only real teamwork and an investment in developing skills accordingly will be key in the ability to deal with this complexity.
KEEPING UP WITH THE PACE OF THE DIGITAL AGE
The future belongs to hybrid organizations with self-organized, customer-centered teams working based on clear processes, principles and organizational determination. Examples of successful transformations in this direction include Heiler-Glas GmbH, which as a smaller company has replaced functional areas in favor of customer-oriented market circles, or the internationally operating Haier Group from China, which removed its middle management almost entirely and instead established more than 4,000 micro-companies. The goal is to create organizational designs that match the pace and volatility of the digital age.