Digital Transformation, or whatever other name you want to call your “digital journey”, is really not coming easily to most organisations today. Traditional (hierarchical) structures with their processes and procedures are not helping – in fact they are hindering. As are the corporate cultures that go along with them. What is needed is a whole new thought and culture. We need a new way of thinking about IT organisation design for the Digital Era.
Looking at examples coming from Silicone Valley (and other IT “hotspots”), there are a lot of new concepts and ideas, especially relating to how IT can deliver a better “product” faster and cheaper.
Take Amazon, for instance. Amazon achieves scalability by having more-and-more small teams, each with it’s own mission and goals that act autonomously to accomplish them. They can even have their own budgets, etc. to accomplish their mission through getting vendors, or ultimately replacing themselves entirely with a vendor so they can move on to other projects.
And then there’s Google who, not surprisingly, bases all people decision on data. From optimum time in a lunch queue to how a manager greets a new employee. Everything that Google does is based on maximising employee attitude and productivity. And it’s all data-based.
Facebook attributes its success for growing from a 10-person to an over 18000 person company to its values which are: Be bold, Focus on impact, Move fast, Be open, and Build social value. Facebook’s structure is more “traditional” being a hybrid that combines certain elements of hierarchical structure and divisional structures based on Product.
And then, of course, there’s the whole concept of Agile. The heart of an Agile organisation is multiple small, cross-functional, empowered and in some cases, self-organising teams, much like Amazon. Each business area is made up of these teams that contain all the key skills required to deliver the required outcomes. For example, a team responsible for developing a tender could include sales people, marketers, graphic designers, solicitors, technical writers, pre-sales technical experts, etc.
There are a couple of things that spring immediately to mind looking at these, and other, examples. Firstly, the success is almost totally dependent on the culture that starts with the CEO and permeates through the organisation. The second is, these organisations started small and grew this way. Unlike your organisation, that likely started in the traditional hierarchical structure with a “command and control” style of management, and is now trying to adopt a more agile approach – but, most likely, just in IT, not throughout the organisation. The result is unavoidable – different “cultures” in different areas.
Now don’t get me wrong – I don’t believe in a 1-size-fits-all culture, processes or, in fact, anything in an organisation. I have believed for the longest time that each section of the organisation needs to have a culture and processes that meet the needs of the employees of that section. IT employees need a very different culture and processes to, say, sales people, or administration people. This ensures an optimal workforce for that section.
But it also needs leadership – managerial and human capital – that is capable of managing in an environment that embraces this kind of diversity.
So, back to IT. How can we structure IT to best cater for the “new world of work” that values:
- Individuals and interactions over processes and tools,
- Completed customer requirements over comprehensive documentation,
- Customer collaboration over contract negotiation, and
- Responding to change over following a plan.
Within the spiderweb are “roles” not jobs. Roles such as Solution Architect, UX Designer, Front-end Developer. The difference is these “roles” are not located in a hierarchy – they merely exist. Each role is well-defined and has a set of skills and competencies required to perform the role effectively and against which employees can be assessed.
When a project (whether traditional or agile) is established, the roles needed in the project are identified, and people with the competencies defined by the roles are seconded into the project/agile team.
In this structure, employees are aware of the different roles and the requirements for those roles. They are encouraged to develop skills and competencies based on how they want their careers to develop.
We will be looking at the people and remuneration issues that will need to be addressed for this structure to work in future blogs.
If you would like to discuss new and different ways of looking at IT organisation design for the digital era, please contact us.