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Presenter: Don Miller, Managing Director – Human Capital, Deloitte Consulting LLP
Designing the Organization of the Future: Cracking the
Network Code
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Steamengine
DigitalElectricity and telephone
Computing
Early 1800’s
1970’s to 1980 TodayEarly 1900’s
The Fourth Industrial Revolution has fundamentally transformed business, the broader economy, and society
There has been massive improvement in productivity in each revolution… until now.
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Organizations today simply are not structured to deal with the pace of change that we are seeing
Demographic upheavals Millennials make up more than half the workforce, and Boomers work into their 70s and 80s
Omnipresent digital technology Technology is disrupting business models and radically changing the workplace and how work is done
Rapid rate of change Organizations must become more agile to keep up with the rapid rate of change and stay ahead of the curve
New social contracts with employeesYounger workers demand rapid career growth, a compelling and flexible workplace, and a sense of purpose at work
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The opportunity for change is here and now
of organizations surveyed by MIT and Deloitte anticipate their businesses
are being disrupted by digital business models
believe they currently have the right leadership or skills to execute
30%
90%
55 | Copyright © 2016 Deloitte Development LLC. All rights reserved.
Enabled by new digital technologies, customers are sharing and accessing ideas and information faster than ever and expect companies to be similarly agile and responsive to their changing needs, providing them a personalized experience, information at their fingertips, and buying options that make sense for their multi-channel habits.
Employees want an engaging experience, opportunities to develop and the satisfaction that comes from autonomy and accountability at work. They also expect the workplace to provide the same digitally enhanced experience they get as consumers –which is mobile, agile and intuitive.
• I don’t feel understood– the company doesn’t recognize or try to satisfy my unique and evolving tastes and preferences
• I don’t feel cherished –the company doesn’t prioritize my needs above other considerations
• My complaints and recommendations fall on deaf ears – I never see any action taken to solve my problems
• I pay the price, in the form of higher costs of goods in services, for inefficiencies in the company
So what…• Amazon just launched Prime NOW in my city, I’ll
save myself time and aggravation and try it
Challenges when dealing with traditional organizations
• I don’t have the information or support I need to do the right things – the organization is so large, complex and siloed that make communicating and working effectively across groups challenging
• I feel ignored – it’s difficult to communicate my point of view to leadership because of the existing hierarchical culture
• I don’t feel connected to a purpose – instead I’m assessed against operational and tactical metrics that don’t drive better outcomes for the customer
• I can’t believe the number of people or groups I need to go through to get the answers I need to do my job
So what….• I finally decide to toe the line and stop trying to
be a hero everyday to my clients and co-workers
Challenges when working in traditional organizations
WorkplaceExperience
Consumer Experience Business
Outcomes
A new commercial and employment contract is emerging as marketplace choice continues to grow unabated
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build a culture of continuous learning, adaptability & career growth
leverage data, cognitive and AI to improve business outcomes, team productivity, and engagement
utilize digital technology to design and improve the work, the workplace, and the workforce
redesign the organization and its leadership for the future
cultivate the employee experience for engagement, productivity & growth
build a new management system to empower & engage teams
The world is changing and talent is changing with it. We must rewrite the rules to reflect the shifts in mindset and behavior, challenging how we…
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To adapt to disruption, organizations must adopt a new team based model
Old World Today
Products Defined and steady Fluid and changing
Customers Steady and predictable Dispersed and unpredictable
Competition Known Unknown
Connectedness Localized Globalized
Workforce Composition Homogenous Diverse
Processes Rigid Customizable
Structural DNA Pursuit of Efficiency Pursuit of Adaptability
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+=
CAPABILITYEnabling the organization to deliver upon those moments that matter
with the right solutions in the right context at the right time
CONNECTIONBuilding connections across your
organization – geographies, ecosystem partners and clients –to build holistic service delivery
CREDIBILITYGive your organization the license –
the support – in the business to influence and engage on the most
important strategic objectives
CAPACITYFreeing up time
to focus on the moments that truly matter
for the customers and/or business functions you serve
+ + =
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The future of work will be driven by your ability to move to a balanced focus of efficiency and adaptability and operate with sustained organizational performance
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Let’s start by understanding an example of modern organization design
• CEO type role at the top with about 10-12 direct reports
• 9-10 large teams who each have a span of control of 1:8-1:10 owning expansion/service delivery in different territories.
• COO type role who owns key operational functions – or shared service
• VP type roles who owns a collection of highly specialized / smaller functions
• May include a future leader (e.g. promising talent) who works on special projects
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It’s actually not modern at all…
General Marc Antony’s Legion under Julius Caesar 2,000+ years ago
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Organization design models have not kept up with changes in society and the economy…
Functional
Formal Hierarches
2,000 years ago
140 years ago
Tomorrow
Prehistory
Power & Domination
Self-managed Teams
Matrix
70 years ago
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The organization of the future requires us to transform the way things work today
90% of companies are redesigning their organizations to be more dynamic, team-centric, and connected
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To adapt to disruptions, organizations must adapt to a new team based model
Deloitte has developed a new organization design method to break hierarchy and rigidity and allow adaptability to thrive. Unlocking flexibility means moving towards flexible pooled resources and multidisciplinary teams who are empowered to make decisions, have access to the right skill sets and free to adapt to market developments without having to navigate traditional functional hierarchies.
U N L O C K I N G T H E N E T W O R K B A S E D O R G A N I Z A T I O N
Identify the area of an organization most at risk of
disruption
Function A Function B Function C
Define the organization’s critical outcomes and uncover the hidden networks required to the achieve
them
Function A Function B Function C
Organize cross-functional teams by outcomes (e.g., customer experience, product
functionality) and identify required shared services to define the new operating ecosystem
Outcome A
Com
mun
ity
Outcome B
Outcome C
A F L EX IBLE O R GANIZAT ION F O CUSES A N E COSYSTEM O F T E A MS O N S P EC IF IC M I SS IONS T H AT C H ANGE A S T H E E X TERNAL E NV IRONMENT S H IFTS
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Unlocking flexibility in your organization structure
Create an ecosystem of open talent with a fail-fast perspective and
harness social technology as a
mechanism to keep the organization connected
Shift mindset away from static ‘boxes
and wires’ and embrace the
transformative power of systems thinking
Realign existing structures into self-
managed, networked teams focused on a
specific outcome
Find the areas of the organization that require agility and disrupt them with
new ways of working
Adopt a Collaborative
Systems Mindset
Protect the Core & Disrupt at the
Edge
Unleash the Networked Teams
Create Conditions for Flexible Design
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Spotify’s Squads, Chapters, and Guilds
Tribe
Squad Squad Squad
Chapter
Chapter
Squad Squad Squad
Chapter
Chapter
Tribe
Mini, self organizing start-up that focuses on one long-term
mission (e.g. payment solutions)
Secondary home for people who do similar work, discuss expertise and challenges (e.g. testers)
Community of interest for sharing knowledge (e.g. web technology)
Collection of squads that act as a mini incubator with less than 100 ppl. (e.g. mobile experience)
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ONA is a data-driven approach that analyzes an organization’s social structures to identify opportunities for improvement
Deloitte’s approach to ONA identifies standard sources of data and augments it with targeted survey data to produce the depth of analysis required to improve productivity, identify synergies, and increase organization design effectiveness.
Pre-existing data(i.e., meeting invites, emails, community sites) and targeted survey findings
Both the pre-existing data and information from targeted surveys are analyzed using Network Analysis software to determine organizational breakdowns
On Network Analysis information to implement strategies to increase operational effectiveness, deploy talent effectively, and transform smarter
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Key Considerations
Analyze Data
• Establish metrics
−Determine relevant measures to analyze
• Apply math
− Apply statistical modeling to determine significant data (e.g., network density, network cohesion, clique analysis, lambda sets)
− Establish correlations between data and behaviors and/ or business outcomes
• Visualize
− Aggregate the data and understand the patterns that exist
Apply Experience
• Inside-out
− Prior surveys
−Historical talent practices
−Qualitative responses
• Outside-in
− External practices
− Comparative ONA trends
− Specialist knowledge
Actionable Insights
• Test hypotheses
• Prioritize actions based on business objectives
• Design intervention
• Target efforts through central members identified in network analysis
• Measure post-connectivity and business metrics
The combination of analytical tools and experienced insight provide the difference between ‘data’ and ‘impact’
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A global manufacturing client embraced SNA and produced dramatic business improvements
Representative Issues
Identifying overly connected people
Bridging Invisible network silos
Creating awareness of expertise distributed in the network
Identifying and drawing in peripheral network members
Business Results
Lowered customer dissatisfaction by 24%
Reduced cost of poor quality 66%
Increased new product revenue 22%
Improved operational productivity by more than 10%
SNA Results
Cohesion – average number of steps for each person to get to another – improved by 25%