The number seven is a number of completeness or divine perfection. There are 7 days in the week, 7 colors in the rainbow, 7 notes on the musical scale, Rome has 7 hills and Snow White has 7 dwarfs. Not surprising then to observe that there are seven trends which are shaping today’s organizations. (There are probably more, and maybe next month another trend will pop up, but let’s stick, for now, with the seven!)
1. Technology
Organizations and people are using more and more technology and social media. This results in new behaviors and new ways of learning and collaboration.
Let’s look at the crowdsourcing phenomenon, for example. Coined in 2005 by the Wired magazine, `crowdsourcing’ means literally crowd-based outsourcing. “Simply defined, crowdsourcing represents the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call.” Crowdsourcing is based on new technologies and opens up so many possibilities which could not have been imagined before. Think of crowdfunding, crowdtesting, crowdsearching, crowdvoting, …. Crowdsourcing can really be seen as an “online, distributed problem-solving and production model.”
New technologies and social media encourage and support new behaviors such as creating communities, collaboration and being open and transparent. These behaviors (and technologies) are now making their way into our organizations and – not surprisingly – they especially appeal to young people.
2. Speed of change
As the rate of change in the world is going up, organizations are introducing ways of working that cope better with that ever mad rush of change. Examples are: agile methods, no job titles, multi-skilling, …
More than 10 years ago `agile software development’ methods were introduced, a perfect approach for dealing with uncertainties and fast-changing requirements. Requirements and solutions evolve through collaboration between self-organizing, cross-functional teams. Agile methods promote adaptive planning, evolutionary development and early delivery and encourage rapid and flexible response to change.
To name just a few other (more recent) concepts for better coping with the rate of change: lack of job titles makes identity less of a barrier to change; multi-skilling makes people more flexible, `dual speed’ strategies and structures, etc.
3. Extreme Customer Centricity
Organizations organize their processes and structures in a way that the customer is put first.
Large organizations that have multiple product lines and segments need to maximize both customer- and product excellence. They typically have market-facing units (oriented towards the customer segments) and product units with a product focus. These multidimensional structures make it possible to give management attention to two or more dimensions: products, functions, countries and customers.
But customer centricity is maybe more a mindset than a structure. Some years ago I advised a client on how to keep up with the digitization race. The client had a good reputation, but was quite conservative and pretty unaware of modern trends and all the latest management buzzwords. But if there is one company that clearly understands the customer centricity idea, then it surely is that client! The company was founded more than 100 years ago and, since then, customer centricity has been their central philosophy; it is simply embedded within every single person in their business.
4. Boundarylessness
The borders of a company and between company units become less relevant.
Boundarylessness is a concept coined by Jack Welch, a former CEO of General Electric The word itself is awkward but the meaning is liberating. A boundaryless organization, which is the opposite of a bureaucratic one is, in fact, an organization without walls, offering interaction and networking among professionals both inside and outside its structure.
What counts in a boundaryless organization is knowledge sharing, interdependency among people, trust and mutual accountability. Business relationships are informal and people come together when they share a common need or problem.
As boundaries are blurred, organizations are experimenting with outsourcing, crowdsourcing, cloudsourcing, etc.
5. Corporate social responsibility
Today’s organizations attach importance to doing business that is focused on economic performance (Profit), with respect for the social side (People), within the ecological boundary conditions (Planet) (=the triple P approach).
And being corporate responsible is more than just making a one-time donation, or putting in an hour of volunteer work every year. Companies that practice social responsibility as part of their everyday business model prove that a dedication to charitable initiatives goes a long way, both for the cause and their reputation. Some examples of successful socially responsible companies are Google, Microsoft, Walt Disney Company, BMW, Lego, …
Take Lego. Operating a responsible business towards children is firmly rooted in the company values and mission. They actively put effort into product safety and responsible marketing to children.
No longer a nice-to-do, corporate social responsibility is now a reputational imperative
6. Decentralization
Organizations are experimenting with more self-management and more `market-like’ structures.
Flattening hierarchies and decentralized responsibility are getting more and more attention. In decentralized structures, responsibility for decision-making is broadly dispersed down to the lower levels of an organization. Front-line units are self-managing; able to set their own strategies and self-correct if needed. Decentralized structures behave a bit like markets where human activity is coordinated with little or no top-down control.
7. Test & learn rather than plan ahead
Organizations need a vision rather than a plan and experiment with fail-fast concepts.
`Fail fast’ is a concept which comes from the software industry. It refers to a strategy of trying something, getting fast feedback and then rapidly inspecting and adapting. In the case of great uncertainty, it is often less expensive to start working on a product, learn whether one has made a good decision and, if not, kill it fast before more money is spent.
Google X’s Rapid Evaluation Team is a small group within Google that prototypes ideas, builds and tests them in search of “the Next Big Thing for Google”. The motto of Astro Teller, the head of Google’s “moonshot factory” is: “If you want to succeed, try a little failure first”.
Another example: General Electric –the company founded by Thomas Edison in the late 1800s –is a massive company with revenues of about € 140 billon and more than 300,000 employees.
Some years ago they realized they had become complex and bureaucratic. In response to that they launched FastWorks, a new operating model based on lean start-up principles: constantly experimenting, learning and iterating while putting the customer at the center of everything they do.
All these trends connect to each other. They are making organizations more like “the market” and may lead us to a new understanding of organization. An organization that is more like a network, more open, agile and managerless.
The smart organizations have already been making the necessary investments to adapt to these trends. They have left behind the baggage of the old economy and adopted new ways of working and collaborating.
Modern organizations – no matter how big they might be—should behave more like a modern start-up. Tech-savvy, agile, customer-centric, boundaryless, corporate responsible, free from hierarchy, innovative and always-learning.
One more thing to learn from start-ups? They have more fun. I’m struck by how seriously we take ourselves on management boards and in meetings. I know large companies have scale, complexity and regulations—all that stuff, and we do need to take our jobs seriously—but not ourselves. We should make fun of ourselves much more often.