A recent article in The Economist brings refreshing news:
Companies are abandoning functional silos and organising employees into cross-disciplinary teams that focus on particular products, problems or customers. These teams are gaining more power to run their own affairs. They are also spending more time working with each other rather than reporting upwards. Deloitte argues that a new organisational form is on the rise: a network of teams is replacing the conventional hierarchy.
In other words, some of the core elements of the Agile worldview – collaboration, organising into empowered teams, breaking down hierarchies and silos, and treating professionals as professionals – are making real headway in a whole range of organisations, and doing so worldwide.
These comments related to a fascinating report by Deloitte’s Global Human Capital Trends 2016. The Economist article adds:
Technological innovation puts a premium on agility. John Chambers, chairman of Cisco, an electronics firm, says that “we compete against market transitions, not competitors. Product transitions used to take five or seven years; now they take one or two.” Digital technology also makes it easier for people to co-ordinate their activities without resorting to hierarchy. The “millennials” who will soon make up half the workforce in rich countries were reared from nursery school onwards to work in groups.
… and points to moves to team-based organisations in all sorts of unlikely locations, starting with the US Army, one of whose commanders in Iraq (General Stanley McChrystal) now regards the US military’s hierarchical command and control structure as a substantial obstacle to operational success.
80% of those Deloitte surveyed – more than 7,000 executives across 130 countries – said their companies are either currently restructuring or have recently finished the process.
Deloitte summarises the changes as follows:
- Move people into customer-, product-, or market- and mission-focused teams, led by team leaders who are experts in their domain (not “professional managers”).
- Empower teams to set their own goals and make their own decisions within the context of an overarching strategy or business plan, reversing the traditional structure of goal and performance management.
- Replace silos with an information and operations center to share integrated information and identify connections between team activities and desired results.
- Organize these teams around mission, product, market, or integrated customer needs rather than business function.
- Teach and encourage people to work across teams, using techniques like “liaison officers” (the US military), “hackathons,” open office spaces that promote collaboration, and job rotation to give teams a common understanding of each other.
- Enable people to move from team to team as needed… and then ensure that people have a home to return to once a team-based project is done. This changes the concept of a “job description” to that of a “mission specialist” or “technical specialist.”
It will all seem familiar, if surprising, to Agilists.
But the situation isn’t as simple as it looks. First of all, it’s not clear from the research that this ‘team’ approach is more than basic matrix management, which emphasises transient teams of the kind that find it really difficult to build up momentum and knowledge – unlike, for example, true product teams. For example, the Gallup comment on this report notes that (according to McKinsey) ‘84% of U.S. employees are “matrixed” to some extent — that is, they may work on multiple teams every day’ – as though that were the same thing. But how many matrix organisations encourage empowerment, autonomy and all the rest? In my experience, very few.
Yet there is, I suspect, a still more profound (and unspoken) tension here. Deloitte themselves suggest a variety of limits to teamwork, and it certainly does not look like the executives who are expected to lead this revolution are very confident of their ability to manage this way: as the Economist article notes, ‘only 12% of the executives they contacted feel they understand the way people work together in networks and only 21% feel confident in their ability to build cross-functional teams’.
But beyond that, is there a more profound sense in which organisations will find teamwork more of a challenge than they are currently bargaining for? The benefits are clear, and it’s quite easy to see that the progressive professionalisation of so many organisations and disciplines calls for a more agile, collaborative approach. Yet many of the drivers of hierarchical, command-and-control models have not gone away. In combat, are local teams going to be able to question their objectives, for example or refuse to be sacrificed in a massively risky assault or rearguard action? In a business, will the workers be able to challenge the aims and targets of its owners – especially when the owners want longer hours and lower pay? When a new customer-centric team finds a conflict between what its customers want and need and pursuing the company’s own ends, which way will they break?
It will be interesting to see how this evolves, how long it lasts – and what happens if a hierarchical model starts to be restored.