Kill the Hierarchy! - Fast to Change Direction
Transitioning People Through Constant Change
This post in the series “Kill the Hierarchy” I explore how organisations need to be able to change direction rapidly to survive in a volatile, uncertain, complex and ambiguous world in which change is constant but also unpredictable.
For an organisation to survive and thrive in a world of constant and uncertain change, the organisation has to be one in which leadership is important, but MORE important is a collaborative workplace in which transparency and creative freedom reign over hierarchical boundaries. This enables innovation, creativity, experimentation, rapid decision-making, agility and employee ownership, engagement and influence. There is widespread autonomy and everyone leads.
No one ever did anything awesome or great just because they were told to!
The ‘Kill the Hierarchy’ model shown the diagram below, illustrates the changes needed to move to a flatter structure, and it is these changes that we shall be exploring in this series of posts.
Fast to change direction
Flatter structures work well for organisations that need to innovate and respond quickly in a rapidly changing environment.
Large organisations with traditional hierarchies and a command and control management approach have to flatten the hierarchy and operate more like a smaller organisation unless they want to be adversely disrupted.
Jacob Morgan, author of “The Future of Work and The Collaborative Organization” sums it up:
“Going forward “late adopter” means “out of business.” Years ago, organizations had the luxury of seeing what their competitors were doing and then quickly following on their heels. Today that is no longer true. Organizations must adapt quicker and more aggressively if they wish to thrive in this new rapidly changing business world”.
In September 2017, Wal-Mart announced a change in its structure in order to improve communication and execution, streamline decision making and accelerate its pace of change.
Wal-Mart reduced its six US divisional groups to four and 44 regional groups to 36.
The restructure was in direct response to increased competition from the likes of Amazon and other grocers who are all jostling to take Wal-Mart’s top spot in the market.
Spokesman Kory Lundberg told Supermarket News in an email.
"As retail and the customer are changing, we’re putting people who are equipped to run great stores and understand, embrace and execute change at an unprecedented rate in the right roles and in the right locations”.
CEO Doug McMillon reflected on the need for speed in a conference call in August 2017:
“Retail is constantly evolving, and it's critical that we move even faster as the customer and competitive landscape continue to change”.
Rapid response to market change
Fasial Hoque writing in Fast Company said:
“The modern economy–global, domestic, and local–however is fast and dynamic; it’s in a constant state of change. And so the greatest overarching challenge facing leaders and their organizations today is to be able to quickly respond to market change; they must be the catalyst of organizational change that will guide their businesses to market leadership”.
The only way organisations will be able to respond faster to change will be through a flatter hierarchical structure and removal of the unnecessary bureaucracy it brings.
Rapid decision-making is enabled when decision-making is delegated and distributed. Employees have to be allowed to experiment, innovate and be creative.
I have written about all of these in this series of posts.
Organisational change management’s overarching priority should be to ensure that everyone in the organisation is resilient, agile and able to adapt. We need to create an organisation in which everyone leads. We have to realise that we can no longer predict what is around the corner and have to be prepared to rapidly change direction as is needed.
DK Matia, in Business Insider Australia said that the strategy for leaders has to be about constantly adapting to change in an every changing landscape.
“Understanding the role and responsibility of the organisation in the context of the entire environment is absolutely critical, much like the racing vehicle which is being driven at high speed around a circuit where the extreme weather elements and changing direction are throwing up dramatic challenges every second."
Matia makes a great analogy between large organisations unable to respond to the changing business world and the demise of the dinosaurs.
“We are in a time of extreme turbulence accompanied by rapid evolutionary change. Becoming preoccupied with the competition is as short-sighted as it would have been for the dinosaurs to peg their survival on competition with the amphibians. The dinosaurs dropped out of the picture not because they were beaten by any other type of creature but simply because they could not respond successfully to the challenge of a changing environment. Given their large size, their response time from head to tail was inadequate. The time it took to receive information from their tail-to-brain and back again, left them completely vulnerable to fatal attack.
Agility and a short response time are critical to survival. Inertia and response time of large organisations can be like those of dinosaurs, so the question which smart leadership ought to be asking is the following: How can large organisations be split into smaller autonomous ones so that their inertia is minimised and response time becomes super-fast? A large organisation with multiple silos, that remain isolated, can become too big to change. This eventually means that the organisation has become too big to survive, as the dinosaurs’ successors discovered during the post-Jurassic period”.
Fast growth by fast change
Corporate Travel Management Solutions (CTMS) has grown rapidly over the last 20 years. CEO, Tom Osovitzki, attributes it to the CTMS flat structure. CTMS has 160 employees and seven global offices but has only two levels of management, including the C-suite.
At CTMS, issues get resolved in minutes not days.
The flat hierarchy means that the organisation, and others like it, is faster, more agile and more innovative. They can change direction faster. This is because employees are empowered to use their own knowledge to solve issues, make decisions and innovate.
Organisations are flattening their structures and reducing the hierarchy so they can be fast to change direction. These organisations and their employees accept that change is constant and that responses to changing conditions, whether driven internally or externally, need to be immediate. It is not BAU (business-as-usual) anymore; it’s CAU (change-as-usual).
Organisations have to be able to change and change direction just as fast as the environment around them changes.
Inertia is your enemy and momentum is your new best friend.
Upcoming posts in this series entitled ‘Kill the Hierarchy’ will continue to explore how we flatten the hierarchy in order to achieve rapid and decentralised decision-making, employee engagement, high levels of collaboration, widespread autonomy, trust and respect, and an environment in which everyone leads.
More posts on their way over the coming weeks and months, exploring how we need to take a fresh and radical look at organisational change management, and the changes we need to make if we are to thrive.
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