Several leading companies are changing the game to drive true agility in organisational design, as MICHAEL McQUEEN reports.
Large and mature organisations tend to be inertial at their core. In nature as it is in business, size is almost always inversely related to agility.
While talk of decentralised business structures is far from new, most leaders and large organisations cling to 19th century management models. Although a rigid bureaucratic approach may promote consistency and predictability, these benefits all come at the cost of the very agility and responsiveness required to win in the 21st century.
So is it possible for large businesses and mature organisations to mimic the agility and responsiveness of a nimble start-up? Is a truly decentralised and network-based business model practical and possible? In short, the answer is a resounding ‘yes’.
ANZ TAKES A BLOWTORCH TO BUREAUCRACY
Despite being one of Australia’s oldest banks, ANZ is doing a mighty job of transitioning away from the hierarchical model of old and becoming ruthlessly action- and outcomes-oriented.
According to ANZ chief executive Shayne Elliott, the goal is to “take an axe to the bank’s hierarchies and bureaucracy”. Elliott’s goal is to “shift the workforce into agile teams, mimicking the way businesses such as Google, Facebook and Spotify operate” in order to act on opportunities and launch new products faster.
In the new structure, the bank will be reorganised into teams of 10-person ‘squads’ that will group together into ‘tribes’. Beyond the limiting of a team’s size and the adoption of new language, ANZ will also overhaul the company’s approach to leadership and authority. Squad and tribe leaders will be appointed based on their adaptability and capacity to work across multiple teams rather than their tenure or career experience.
Day-to-day activities will change too. Team members will be asked to view project delivery timelines as six-week sprints, while their accountability for activity and progress will be gauged in daily stand-up meetings.
Naturally, this shift will have a significant impact on facilities management, resource allocation and technology integration. Far from bravely blazing a new trail, however, ANZ has taken a leaf out of the book of overseas corporate giants such as Haier and W.L. Gore.
HIGHER-ORDER THINKING AT HAIER
In the case of Chinese electrical appliance manufacturer Haier, the company’s chairman Zhang Ruimin invokes no less than philosopher Immanuel Kant when describing his ethos for authority:
“We encourage employees to become entrepreneurs because people are not a means to an end, but an end in themselves. Our goal is to let everyone become their own CEO – to help everyone fully realise their potential.”
This is more than mere rhetoric. Ruimin has been steadily transforming Haier’s culture into one of genuine empowerment and self-direction over recent years.
Today, Haier’s 40,000 staff are broken up into 2500 microbusinesses or microenterprises consisting of no more than 15 people. Each microenterprise has its own P&L and is accountable to achieve certain success metrics.
Then there’s the shining example of decentralisation offered by W.L. Gore. By any metric, W.L. Gore is an impressive business. Since the company’s inception in 1958, it has never once made a loss. It is consistently ranked as one of the ‘best places to work’ and is an innovation powerhouse boasting over 7500 registered patents to date.
And yet, despite all these conventional measures of success, it is W.L. Gore’s unconventional strategy for achieving them that is most extraordinary. Unlike every one of its competitors, no employee at W.L. Gore has a title. There are no bosses and no formal hierarchy. Employees review each other’s performance and promotion is by peer-recommendation and endorsement rather than seniority or tenure.
While it’s tempting to dismiss this model of shifting authority from central bureaucracies to networks of start-up-esque business units as something that ‘would never work in our business’, I’d challenge this assumption. If a big bank, a Chinese multinational and an industrial manufacturer can adopt this agile model, I’d argue the biggest barriers to embracing it are not pragmatic, but rather the paradigm-bound and power-driven.
Regardless of whether an organisation adopts a wholesale model of decentralisation, what’s clear is that every business and leader must examine whether their culture, systems and power structures are fit for the future. For facilities managers, these questions are equally important. After all, if the desire for control, predictability and order comes at the cost of agility and responsiveness, this may be too high a price to pay in an age of disruption.
Michael McQueen’s latest book How to Prepare Now for What’s Next (published by Wiley) examines the key disruptions that will shape the coming decade and outlines a game plan for staying one step ahead of change. For more information, visit www.michaelmcqueen.net.
This article also appears in the June/July issue of Facility Management magazine.
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