The hierarchical model of business and company management that evolved over the past century or more – where an individual or a group of leaders held the source of truth for a company’s performance – has been fundamentally challenged by the changes wrought by technological transformation in the global economy in recent decades.
In many ways the revolution in smartphones, data availability and analytics, plus changing customer preferences and staff expectations, has rendered the old hierarchical structure and command and control approach in need of change or no longer fit for purpose.
In seeking to bridge that gap many different approaches to operating a business and managing staff have emerged or, like agile, crossed over from the technology world into the mainstream management lexicon.
But often, this is done within the established structures and therefore it won’t work, according to the Boston Consulting Group.
Authors Allison Bailey, Vikram Bhalla, Rainer Strack, Diana Dosik and Judy Oh argue in “Organising for the Future with Tech, Talent, and Purpose” that “tweaking around the edges of current organisational models will not be sufficient”.
Rather, the authors argue, that “leaders need to fundamentally rethink why organisations exist and how they operate”. This means rethinking technology and how it folds into your business and unleashes potential. It also means changing the focus of the business from a machine with many moving parts being driven by a central command to a future-facing organisation that is seen “as something that is still robust but more organic and evolving”.
Bailey and her colleagues said this will allow organisations to leverage technological change and shifts in talent in a manner to move beyond current business and profit models.
“[All] business is now a technology business. No longer can companies think of their technology function as a separate, independent, and siloed entity,” the authors said.
Practically, this means embedding technology throughout the company and the know-how to use it across the entire business. It will require a change in thinking from leaders, which will also impact how those leaders deploy their technology and human resources and how they facilitate the optimum collaboration between these two important aspects of any company in the modern economy.
Tech is the enabler to unleash productive workers and for businesses to have a more positive impact on society as well, BCG said.
That last point on positive impact is important because the authors point out millennials and Gen Z will make up 59% of the workforce in 2020, according to Manpower research, and these employees have different expectations about how they are deployed, engaged and the businesses they work in. And according to a Gallup study the authors cite, “67% of millennials expect employers to have purpose and their jobs to have societal impact”.
Increasingly this cohort of workers is also either happy to work remotely or to be independent contractors to businesses. That’s another fundamental shift in the old hierarchical structure where a company had a centralised headquarters or regional satellite where their workforce toiled or went out to meet their market.
Getting this shift right is crucial, the authors said, highlighting that to succeed, “organisations need to fundamentally rethink the way they work—to leverage technology to unleash the potential of people and the ecosystems in which they operate to serve companies, stakeholders and society overall”. Success will then be delivered both commercially and societally, they said.
In order to adapt and thrive in this evolving environment, BCG shared areas of focus they say will help organisations be more innovative, build better relationships with customers, and get the best out of their human and technological combinations.
“Leveraging technology just to replace employees is a limiting concept for the future,” the authors said. They instead highlight that companies can combine the abilities offered by both technology and humans to get greater leverage for the business and unlock more fully the potential productivity gains.
It’s easy to simply automate to improve efficiency, productivity, improve quality, and reduce costs. But BCG said companies “must aspire to go beyond that – to solve unanticipated problems and to allow people to focus on creativity, improvements, and reimagination”.
Bailey and her colleagues cite work MIT is undertaking where it is seeking to “combine traffic data, shopping data, and human movement data with urban design models” in a way which will eventually reshape how urban planning is done.
BCG also highlights one of the obvious shifts in this trend to human-tech collaboration is the movement from human-run to human-designed, which it said shifts the boundary between human and technology and requires a rethink of how work gets done. The result will be that business will need to have a “willingness to regularly rethink the organisation structure and an acceleration of workforce planning cycles to keep pace with evolving work, skill, and technology needs”.
That, in turn, is going to require constant education and re-skilling across employees working lives – either self directed or company provided.
In the end, BCG said, this evolution will require “overall ways of working that are more iterative, cross-functional, human-centred in design, and more reliant on decentralised decision making in empowered teams”.
Are you and your business ready to let go to improve performance? That’s the big question being asked in today’s economy.
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