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When E2.0 transforms the organization chart

May 30, 2012

This post was originally written for the French online news 01Net then published in the newspaper 01 Business & Technologies’ Opinions section, page 30.

image courtesy of Flickr user Stephenccwu

There used to be a time when people were appalled by the idea of flat organization charts and traditional enterprises morphing into startups. Then the concept of the ‘social’ organization was born, and because the term connotes politics in several countries, it elicited alarming reactions. Over time, we believed there would be no impact. This is proving wrong.

The org chart: a strategy tool for the Enterprise 2.0 too

Beyond depicting the original intent, drawing an org chart is practicing strategy. It can unveil qualities and spot defects inferred by the corporate culture or the strategic plan: such as shunted information or decision channels, bottlenecks, inherent silos, cross-functional departments hacked or diverted from their missions, unbalanced distribution of power and responsibilities, and so forth.

Taylorism recommended to dedicate structure to yield a strict and scientific system, and as a result rigidified the organization. Later, the matrix organization and its evolution, the multi-dimensional organization[1]. The Emergence and Evolution of the Multidimensional Organization. California Management Review., did bring flexibility, especially for the industry and service sectors. Yet even with a matrix or multi-dimensional organization, the modern corporation is far from being agile enough to adapt rapidly to market changes and accommodate abrupt changing market conditions.

Is it utopia to implement the Enterprise 2.0 without touching the org chart?

It is rational to consider the Enterprise 2.0 as more agile: free circulation of the information, more autonomy and initiative allowed and encouraged, and an increased action potential thanks to collaboration. Still, if the pre-2.0 organization mapping  remains, its synergies and predilections will remain too. As well as its antagonisms and unfit areas. It has become more agile, smarter, but it holds the same binding chains.

It is leaders and strategists’ duty to think up how to rework the structure to make the most of collaboration and collective intelligence. I recently facilitated a strategic planning exercise in a pharmaceutical multinational company. The objective was to increase the market reach with no or very little additional resources.   It was almost a survival assignment for a company growing at a double digit rate, yet having to take account of a crisis involving innovation hazards and a tough competitive environment. The plan under consideration was to create virtual communities to address niche markets internationally, or new geographical areas, without stripping too much the organization. A traditional organization, with dedicated teams and support functions, would have required too many people.

A proposal for the org chart 2.0: a virtual layer blanketing the traditional structure

A number of companies have tried this approach. Among them Cisco is a known case study. The communications device manufacturer carried out a thorough transformation in 2008 to be in a position to launch much more market-oriented initiatives. Budget and resources needed for large projects are distributed to working groups and boards, assembled in councils. The overall functioning has become entirely collaborative. The old organizational skeleton remains as a support canvass, but without the old model responsibilities and powers. Even though the company has re-enforced a hierarchical escalation process to address paralysis risks that come with rival resource requests, the working mode remains fundamentally collaborative.

The organization 2.0 might then be a reallocation of power and responsibilities to a virtual org chart that comprises agile components. It is tacked onto the matrix organization which serves as frame; virtual teams last only as long as their mission, and then are fragmented and their resources are distributed into new virtual teams.

How about you – how would you draw your corporation’s Org Chart of the Future?
Many thanks to Susan Scrupski for proofreading this post, much appreciated

  • [1] Stoelhorst, J.W. & Strikwerda, H. (2009). The Emergence and Evolution of the Multidimensional Organization. California Management Review.

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