Digitalising a 20th Century Structure

Guest post by Mike Rose

I have had a few conversations recently about how organisations, particularly leaders, adapt to the digital world. The image above is a typical way that we might illustrate the way a company is structured, but more than that, it could be the way that we view sectors or even everything. Humans construct hierarchy in order to manage complicated things.

We use this type of structure to impose order onto (relative) chaos. When I worked at Defra, this structure existed to segment the ‘environment’ into the chunks that were managed by different bodies/policies/legislation etc.

In this kind of structure there is a flow of information, and this is generally up and down.

Information (not data) flows up and down

It is not a ‘data flow’ – it is very much an information flow. In other words, good news flows up, and bad news is screened out by the ‘shit filters’. The only time bad news makes it through to the top is when it is so cataclysmic, senior managers have to get involved. Instructions flow down, based on this skewed news, that ‘guide’ the work of the people.

Digitalising organisations with this structure is imposing a requirement for a new type of flow, largely enabled by technology:

We want data (not just information) to flow side to side

We have the capability and the capacity, now, to handle data flowing between these organisational management silos. Bob in customer care (the purple blocks) might be able to use data from Doris in product research (the grey blocks) to help shape the work he does, and as part of the information he is using. However the structure of the organisation might hinder this; the hierarchy will not necessarily encourage this kind of lateral thinking because it doesn’t support the up/down targets.

Here’s how this structure might look from the top down:

Organisational hierarchy from the air

If you consider the central circle the senior management, then the circles outside that relate to the different organisational chunks, and the numbers of people within them. Bob and Doris are likely to be in the outside circle.

What you can see from looking at an organisation/sector/etc from this perspective is how difficult it becomes for the top person to have an understanding of the whole business and see how Bob’s data and Doris’ data could be used together. Why should they know this?

We are relying on the top people to understand the power of working across the structures rather than up and down them. We want them to drive change. Yet the whole system around them is designed to be up and down and not side to side.

Part of the solution is, of course, to help senior leaders to operate in the new digital age. For me this is about them having a lot of skills and abilities that can be learned, trained, augmented yet fundamentally there is one issue that needs to be understood first which is how we go about incentivisation.

Let’s look at what a sector might look like from a top down view:

Multiple companies from the air

The organisations that make up the sector fill up the space (obviously this is a gross simplification). But what happens if you remove the teams and leave the leaders?:

Company leadership from the air

The top brass are miles apart from each other. It is highly likely that they are so focussed on their own KPIs and incentives that they have little or no interest in someone else’s. They might ‘know’ that they should care, but our 20th century structure certainly doesn’t incentivise it.

Whereas, where organisation circles are closest, you will likely find people with a lot of empathy and understanding for each other. They are working in the same way, but on different subject matter. I used to talk about breaking down the silos, but that this is not the right way of looking at it. What we need are silos that are more porous. We need to feel enabled to share our data side-to-side, while information flows up and down.

Fundamentally, we need to understand that it is much more about the people within a company/organisation, over the process.

The village people

We need to recognise that senior folk shouldn’t have all the answers – that is why the experts exist. We shouldn’t be expecting the senior leaders to be doing the joining up, because the structures and incentives we have do not necessarily encourage that.

But the quid pro quo is that the senior folk should trust their experts. We need to trust the teams that are close together to work with each other and share appropriately (ie within a framework).

It is obvious that we should not allow the structures we have (inherited) determine the decisions we need to take. The structures may need to be adapted to make the future possible. But the starting point is simply making the current silos porous trusting people to work together appropriately and allowing the (appropriate) data to flow side-to-side.

If you think there is something in what I am talking about here and fancy a chat about it, drop me an email.

A version of this blog originally appeared on Mike’s website.

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