Organisational structures

The Post-COVID Organisation (Part 2)

Four Lessons for Future Org Structures and Operating Models

 

COVID-19 has taught us a lot about the organisational structures and new operating models of the future.

One lesson is how much can actually be done remotely today. Although platforms like Teams, Zoom and Webex have been around for years, the pandemic has finally forced millions of managers and knowledge workers to learn to use these tools, thereby eliminating the greatest barrier to their mass adoption. The implications of these “high-touch” communication platforms for the way we work and future organisational structures is just starting to become apparent.

Like the telephone, fax and email before them, video conferencing platforms are pushing down the cost of communication still further (cost per bit/byte) and increasing the richness of interaction possible over distance. As with previous advances in telecom technology, people refuse to go back to lower bandwidth channels thereafter. The shift to remote collaboration is therefore here to stay, and is already having an effect on organisational structures.

Just as IT enabled the disaggregation of the value chain, ubiquitous video conferencing will do the same for more complex interactions that by their nature were previously done face-to-face or in co-located groups. Real-time video conferencing has matured to a point which enables rich collaboration for workshops, brainstorming sessions, business reviews, development meetings, sales calls and even team social events! This enables greater specialisation of roles and expertise across the globe, that can be remotely networked on-demand when needed.

Collaboration will be based more on trust and outcomes in the future, with a requirement for more structured group communications driven by the demands of the video conference channel. There is also less informal office chit-chat and distractions when working remotely. The implication of this more efficient communications is a further collapse in the hierarchical structures and layers needed in white collar organisations.

Interface costs are one of the key economic drivers defining an optimal organisational structure and operating model – defining which activities should be bundled in a team, group, department or BU. Video conference platforms have driven down interface costs still further. Previously unthinkable organisational set-ups, like geographically distributed shared service centres, staffed by remote workers, promise to achieve both low cost through scale while maintaining global time zone and local language coverage. The best of all worlds.

A final lesson from COVID-19 is that distributed, local competence and decision-making is important for speed of reaction and risk management when supply chains are disrupted and travel restricted. This has implications for corporate headquarters structures which will be squeezed as decisions and activities are delegated and distributed more to local managers. It’s logical to expect more distributed remote headquartered organisations and senior management teams.

Many companies are using the COVID-19 lock-down to reassess their org structures and operating models going forward. As there is so much change going on right now anyway, it is an ideal time to ensure that a future-proof set-up is in place when the pandemic ebbs and business returns to a new normal. Humatica is pleased to be helping firms assess new organisational options and put the right post-COVID operating model in place.

> Link to the Real Deals HumaticaCorner column

Kind regards,

Andros Payne
Managing Partner

 

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