The discipline of organisational design has been around for a long time. While it emerged in the mid-20th century with the use of strategy and hierarchy to better manage controls and bigger workforces, organisational design has its roots way back in the industrial age when factory managers were put in place to supervise employees doing physical work.
Today, many businesses trade in knowledge and service delivery rather than manual labour outputs. They manage their intellectual capital by using organisational structure as a mechanism to share information and have it flow into the right places. Increasingly, these structures need to be adjusted in response to rapidly changing market conditions and technological developments.
The nature of business will morph again. In the future, it’s likely knowledge businesses will employ fewer people due to higher levels of activity being undertaken by robots, AI and other technologies. With fewer humans in key roles, the organisational structures of the future will probably focus on the individuals rather than the roles.
In contemplating the future of work, we see emerging opportunities for organisational design to help create the right infrastructure for businesses with both human and non-human knowledge workers. While still in their infancy, we think these three developments are worth watching.
Developing digital twins
Digital twins are already being developed for products (think Google Maps), things (including buildings in New South Wales) and places (NSW Spatial Digital Twin). There are now early attempts to build digital twins for organisations. These map the social interaction between functions and roles, because there’s a lot of unseen, informal factors that influence how organisations work, including organisational behaviours, communication, learning and constructive conflict.
While it won’t be easy to digitally replicate informal artefacts and mechanisms, the potential benefits of doing so are enormous. For example, an organisational digital twin could produce accurate data using ‘what if’ scenarios. It could also be used to adjust an organisational structure quickly in response to new information and opportunities. As a powerful decision-making tool, an organisational digital twin would be a significant asset – one that would need to be closely protected.
Putting technology at the core
As we move beyond human-centric organisational design, technologies will need to be embedded into structures – and, in some cases, at their core. Unsurprisingly, it’s industry disruptors like Uber, Deliveroo and Lyft that are starting to give this concept the attention it deserves. Those businesses have already put their tech systems at the core of their organisational structures.
Building businesses with hybrid purposes
Historically, businesses were established through the capitalist system to generate profit.They had no other purpose. Today, very few businesses have the social licence just to exist for the purpose of making profit for shareholders. There’s now a clear expectation from shareholders, regulators, customers, employees and communities that businesses also need to have ESG activities. These activities require strategies, budgets and resources. Many highly regulated businesses and professional services firms already have these embedded into their organisational design. Others continue ‘winging it’ as they try and maintain their social licence to operate.
How JOST&Co can help
By reviewing organisational structures, we can map the architecture’s current state and identify how it can be better designed to connect it to organisational strategy, capability building and external and employee brand positioning. We can also help leaders understand the nuances necessary to transform design and communicate change.