Day: September 22, 2017

The need for Human Resources Management to play an increasingly meaningful and transformational role in the boardrooms of organisations has been a source of considerable discussion since Dave Ulrich published his notion of the HR Business Partner ​and subsequent papers on various iterations of HR competencies.​

The webinar 2016 Predictions for HR: A Bold New World of Talent, Learning, Leadership, and HR Technology Ahead, recently published on the Bersin by Deloitte website, is in many ways a game changer for a profession that has been trying to define itself for a number of years.

Looking at the HR function through a variety of functional lenses rather than the traditional HR lens, I believe there is a need, in a fast changing, disruptive and connected world, to radically relook at the skills and perspectives required by an HR team. The need to break down silo thinking is emphasised in Gillian Tett’s recently released book The Silo Effect and this applies to HR as much as any other discipline.

The skills and disciplines that I believe should be represented in a future HR dream team are described below.

Several of the skills that are core to HR effectiveness are not even related to traditional HR:

An anthropologist or social psychologist: In the final analysis the role of HR is to assist organisations to be more effective and adapt very quickly to disruption and transformation. For this change to be effective, a deep understanding of social and organisational dynamics is required at a level far greater than the average HR or OD practitioner brings to the process. In her book referred to earlier, Gillian Tett, a financial journalist who ran the New York office of the Financial Times and who also has a PhD in Anthropology, points out the relevance of the discipline to business and organisational effectiveness in facilitating deep organisational change.

A marketing expert: One of the key roles of HR in the modern organisation is to assist in facilitating organisational culture that is relevant to the strategy. In fact, organisational culture should be the internal representation of the organisation’s external brand or reputational aspiration. The two should be inseparable and, just as an organisation needs visibly to represent its brand values externally, it needs to represent these same values internally with the same rigour. This internal ‘marketing’ is not usually a strength of HR practitioners. A further marketing expertise need is to develop an organisation’s employee value proposition (EVP) and to market this in the competitive talent market, thus building an employer brand.

A customer-centric HR operations manager: The Bersin predictions show how critical HR technology will be in the future and how, for the most part, it will be a game changer. The person who runs the HR customer services operations should have a background in running externally focused customer services operations such as those in organisations like Discovery and Multi-Choice.

Social media expert: The need for understanding social media and social technology in its widest sense will be a key skill required for communicating with staff and other stakeholders in the future. This is an indispensable new addition to the core skills set.

A business analyst: Big data and data analytics will be as relevant to HR as to any other organisational discipline. This analysis will form the basis for strategic workforce decisions that are based on accurate, real-time data. Again, this is not currently a core HR skill.

Business leaders: The greatest, and generally justified, criticism of HR practitioners has always been that they do not understand the business of the organisation for which they work. Many organisations place high-potential line managers in HR to provide them with a learning experience about the people side of the business. This is an excellent grounding for future leaders; it is also an excellent opportunity for business leaders to shape HR practices to ensure that they are relevant to the business. In my view, this exposure to HR would be suitable for operational managers and strategists as both are relevant to aligning HR strategy and practice to the needs of the business. It can be anticipated that they would bring experience in leadership which goes beyond the traditional HR approach that is often driven by processes and compliance rather than by good leadership.

HR leaders: Although all the aforementioned disciplines and skills will become increasingly essential to the effectiveness of HR, clearly there is a need for HR professionals. They should be in roles that are specialist to the profession, such as IR and remuneration, but also in roles that integrate all the skills mentioned above, experience and expertise into a coherent team that designs and facilitates the execution of the organisation’s people or HR strategy.

How such a dream team is constituted depends on the organisation. It may be that certain expertise such as marketing is sourced from the marketing function. Or, the HR operations and customer service operation falls within a larger central services division.

However the team ends up being configured, one thing is certain: in a world characterised by disruptive innovation and a whole new generation of HR technology, a radical rethinking of HR is required. Because our professions are largely responsible for how our brains are wired, it will be almost impossible for HR to reinvent itself in the way that will be required in the future. The silo approach to organisational design, in this case HR, will not be sufficient to provide the level of innovation necessary to compete in the future. Multidisciplinary and diverse teams, which include some thinkers from ‘the fringe’, will be required to generate the levels of innovation required for an effective future HR team.

Terry Meyer is a strategy and leadership consultant and author. He is also a part-time faculty member of USB-ED where he is responsible for the HR Executive Programme. Further areas of expertise include organisational design, and talent and human capital strategy.

This article appeared on USB-ED.com.

With ever-changing expectations of consumers across a global market, private and public agencies, businesses, and groups are finding more and more value in strategically approaching organisational design.

The careful evaluation of how an organisation operates in order to best align with an overall mission and goals results in more positive outcomes for people, systems, and the incorporation of technology.

People and roles

Most business experts agree that the way to be able to predict success in an organisation is to have the right people in the right positions. The development and re-evaluation of existing organisational charts is a key part of the initial designing or re-structuring of a company, business, or other group. Processes from what interview questions to ask new candidates to evaluation of existing employees are carefully examined when looking at the people of an organisation. This leads directly into what roles each person should play in operations based on expertise and ability.

Every employee has strengths that can be useful for leading a company or organisation to a level of success. Most often, those strengths should be recognized, in some cases shifting roles and re-formatting the reporting structure of an organisation. From the president’s office to the first level manager to a shift supervisor, each person who holds authority within a company is evaluated for strengths and weaknesses to determine if each person’s position is ideal for maximizing positive overall results, including the location of an employee in the global workplace.

Systems and processes

An organisation designer will also carefully consider the ways in which workflow is implemented. Consideration is given not only to the processes that are completed during a work day, but evaluation of the ways in which those processes are completed is also a top priority when an organisation is looking at the design of the firm overall. Understanding the efficiency of all programs, automated and manual, is often the start of analyzing how to better improve outcomes through the re-development of systems.

Accountability is an additional factor often included when systems and processes are examined in the design of an organisation and its structure. In order for processes to run smoothly, some level of autonomy and clear standards, expectations, and flow of information must be identified in the design process.

Technology and equipment

As technology continues to become essential in all areas, the ability to incorporate and integrate the right technology into organisational structure is also a top priority. In the design of an organisation, which software, hardware, and other equipment are being used are a central focus. More on the connection between organisational design and technology can be reviewed here. 

Putting it all together

Ultimately, a successful structuring of a company or other organisation increases profits, employee and consumer satisfaction, and workflow optimisation. After each area of an organisation has been evaluated, analyzed, and developed, completion of organisation design requires for implementation of any of the new policies identified in the process.

Starting from the top or working through an organisation’s structure from the bottom up can help for analysts, project managers, and executives to identify a number of areas of improvement. After evaluating and considering options, stakeholders are able to make recommendations and create implementation plans through organisational design.

This article appeared on humanresourcesmba.net.

A motorbike and a bicycle have a lot in common but they both function in very different ways. So why is that? The simple answer is design.

Just as design dictates whether your two-wheeler is pedal-powered or requires fuel, the design of your company dictates how it operates on a daily basis. Organisational design is the way your organisation’s structure aligns with its objectives.

Digital disruption, employee expectations and an evolving workforce are all challenging companies to rethink their organisational design. Change is needed if they want to engage and retain talent, empower their employees, tackle leadership issues, and develop company culture.

Deloitte’s Global Human Capital 2016 report found that 92% of companies believe that organisational design is either very important or important. Almost half of the respondents told the survey that they have already restructured their organisation or are planning to do so.

So where does HR fit in? HR is well placed to offer organisational analysis and advice but perhaps its biggest role is in helping to implement any design changes.

Trends in organisational design

Companies are moving away from a traditional hierarchical structure in favour of a network of smaller teams that tackle particular missions or objectives. Employees are seen as a resource of the company rather than the resource of any one manager.

Teams are formed on the basis of expertise or skills for a specific project, customer or market. It’s a fluid, team-centric approach that harnesses an organisation’s talent in the most effective way. Smaller, more responsive teams can communicate better and decentralising authority helps to speed up decision-making.

Only 38% of companies are still functionally organised, the report from Deloitte found. Letting people move from team to team to handle different projects is an obvious way to get the most out of your pool of talent.

More than half the workforce are now Millennials. They want rewarding work, flexibility, development opportunities and to be engaged. So companies are being challenged to change. Leadership roles are evolving to accommodate Millennials but just 7% of companies believe they are “excellent” at developing Millennial leaders.

Established companies only need to look at the exponential growth of disruptive organisations to see the benefits of new design models. These “exponential companies” aren’t hampered by the legacy structures, culture or technology that hinder their old-school rivals. Instead, they’re rapidly evolving organisations that constantly adapt and develop as they grow.

How to avoid organisational design mistakes

“A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools,” said Douglas Adams. Sure, designing a foolproof redesign is difficult, but knowing the potential pitfalls can stack the odds in your favour.

One common problem is adopting a new design without the structures to support it. Imagine a shiny new surface design with the old engine underneath. Your organisation could tear itself apart from the inside. Employees can get confused about their roles or end up trying to satisfy two bosses, which leads to frustration on all sides.

Don’t underestimate company culture. Over half of the companies in the Deloitte survey are currently trying to change their culture, which shows how tricky it is to get right. If a redesign is resisted by traditionalists, it can cause a cultural divide.

There’s no point putting a new engine on your bike if the person riding it insists on using the pedals. Taking the time to convert doubters and clarify new expectations is one way to improve a redesign’s chances of success. Part of this process is explaining how the new structure will work and how they fit into it.

Don’t just change your design for the sake of change either. Think about what you want to achieve, plan accordingly and form a strategy based on your resources. Transforming your organisational design on a whim will rarely end well.

How can HR steer organisational redesign?

Design thinking transforms HR from a “process developer” to an “experience architect” and this makes it an important stakeholder in the process. HR professionals should work closely with management to identify an organisation’s problems and come up with design solutions. HR can also put the employee experience front and centre in any organisational transition.

Job titles and descriptions can become blurred in project-based organisations so employees require support and performance management from HR. Hiring policies and succession planning also need to be carried out with the new structures in mind, making HR vital to the success of any organisational design.

Think of a redesign as upgrading from a bicycle to a motorbike. HR’s role is to explain the operator manual, walk the employee through the mechanics, ensure everything’s working, and to teach them to ride it before they hit the road.

Smart HR technology helps you manage the entire employee journey, from hiring to retiring. It takes all the admin out of the transactional stuff which means you can focus on the design thinking that will help transform your organisation.

By Mark Sexton.

This article fist appeared on CoreHR.com.

Reducing the risk of a failed transformation.

Influential and instrumental, operating models are a vital link connecting business vision to an organisation’s design and ultimately to a company’s success or failure. In a truly remarkable way, operating model design acts as connective tissue between theory and reality. Yet effective operating model design tends to remain one of the least understood organisational topics and continues to evade armies of sophisticated professionals. In the first of our three-part series on high-impact operating model design, we look at the (often overlooked) role of operating models in achieving business transformation, particularly their role in enabling and supporting desired behaviors.

What drives business transformation?

Often it’s the need to compete, to grow, to adapt to changes in markets, technology, customers, the workforce, and society in general. Like many of these forces, today’s business transformations should be revolutionary, rather than evolutionary (it’s not easy building the organisation of the future), compelling operating model design to become more holistic, nuanced, and sophisticated. The customer-centric organisation demands a structure that secures internal behaviors that drive customer value. Yet, the continued existence of failed business transformations has prompted us to consider a key question:

Why do employees fail to make the necessary behavior changes, rendering transformation efforts useless?

Stepping back to move forward

What if first, before designing an operating model, before implementing a technology, changing metrics and rewards, restructuring roles, or spending money on flashy campaigns, leaders reflected on how each individual or group should behave in order to make the target state operating model a success? Companies across industries are realizing and adopting this new way of designing operating models. This new way focuses on end behaviors that not only activate an operating model but also organically drive the desired value case, as opposed to the old way in which operating models were designed to support an established value case without consideration of the end behaviors. This design approach often left a void because the operating model did not consider behaviours, leaving nothing in place to drive the value case. A behaviour-driven operating model establishes a customer-centric organisation that organises around behaviours to drive profits.

Source: Deloitte Consulting LLP

We’ve just looked at the “what” of high-impact operating model design. In part two of this series, High-impact operating model design in action: Realising the ultimate influencer, we’ll take a closer look at “how” operating models influence behaviors.

Tiffany McDowell is an Organisation Transformation & Talent principal in Deloitte Consulting LLP’s Human Capital Practice, where she focuses on helping companies improve performance by building organisation structures to execute new capabilities through their workforce.

Uzair Qadeer is an Organisation Transformation & Talent manager in Deloitte Consulting LLP’s Human Capital Practice, where he specializes in organizational development with deep focus on supporting culture, change management, and talent strategies. Uzair has delivered transformative organisational strategies work both in the United States as well as internationally.

Julia Rudansky is an Organisation Transformation & Talent consultant in Deloitte Consulting LLP’s Human Capital Practice and focuses on organisational strategies, talent, change management, and strategic communications.

This article appeared first here.

We just launched one of the world’s largest studies of people challenges in business, Deloitte Human Capital Trends 2016, and the results were striking. Among the 7,000+ companies who responded (in over 130 countries), the #1 issue on leaders minds is “how to redesign our organisational structure” to meet the demands of the workforce and business climate today.

Our conclusion, after almost a year of study, is that today’s digital world of work has shaken the foundation of organisational structure, shifting from the traditional functional hierarchy to one we call a “network of teams.” This new model of work is forcing us to change job roles and job descriptions; rethink careers and internal mobility; emphasize skills and learning as keys to performance; redesign how we set goals and reward people; and change the role of leaders.

Fig 1: The New Organisation: A Network of Teams

Our research, which identifies the top ten human capital trends for 2016, shows that most of the issues facing companies today (employee engagement, culture, time to market, innovation) are tied inextricably to this new way of working. And 92% of the companies we surveyed cited “redesigning the way we work” as one of their key challenges, making this the #1 trend of the year.

Fig 2: Relative Importance of the Ten Global Human Capital Trends

What is a “Network of Teams” and Why Now?

If you look at the research, you find that companies already operate this way. Only 24% of large companies (>5,000 employees) claim to be functionally organised and only 38% overall. We naturally run our businesses in sales teams, manufacturing plants, retail stores, product groups, service teams, and geographically independent operations.

Uber, who is well known as one of the most disruptive and innovative companies in transportation, sets up city managers who run their local operation with local marketing, government relations, staffing, and operations leaders.

The problem we face, however, is how we coordinate and align these teams, how we get them to share information and work together, and how we move people and reward people in a company that no longer promotes “upward mobility” and “power by position” in leadership.

As the trends above show, the new organisation of today requires us to rethink the leadership strategy, focus on culture and engagement, deliver on-demand organisational learning, and provide information centers, analytics, and digital HR tools to help people operate, share information, and work together well.

I have had the opportunity to talk with dozens of companies about this over the last year, and I believe this is a profound new way of thinking about business. We have to think of companies like “Hollywood Movies” – people come together and bring their skills and abilities to projects and programs, they build and deliver the solution, and then many of them move on to the next “movie” later.

Our research identified four keys to success in this new organisational model:

1. Shared values and culture.

As people operate in geographically dispersed teams which are closer to customers, they need guidelines and value systems to help them decide what to do, how to make decisions, and what is acceptable behavior. This is driven by mission, culture, and values – hence the tremendous interest in understanding, measuring, and aligning culture (86% of companies rate this as important). Our trend entitled “Shape Culture, Drive Strategy” and the article “Why Culture is the Hottest Trend in Business Today” describe this topic in detail.

2. Transparent goals and projects.

People operating in teams and small groups have to work with other teams, and they can’t do this unless goals are clear, overall financial objectives are well communicated, and people know what other people are working on. Our research on next generation performance management and “The End of the Bell Curve” describe this in detail.

3. Feedback and a free flow of information.

As teams operate and customers interact with the company, we must share information about what’s working, what isn’t working, what’s selling, and what problems we have to address. While local management and team leadership (i.e. a plant manager or sales leader) should take immediate responsibility for errors, others need to know what problems are taking place, so they can respond to support the team. This takes place today in digital information centers, analytics dashboards, and free flowing feedback systems that have replaced annual engagement surveys and performance reviews.

Solutions require a focus on open and transparent feedback, digital information centers, and building an open and inclusive culture. Our research on “Feedback is the Killer App” and the article “Why Inclusion is A Critical Business Strategy in 2016” describe this in more detail.

I recently talked with the head of diversity for Atlassian, a fast-growing software company. Their entire talent strategy is now focused on building diversity and inclusion at the team level. It isn’t enough to have some teams which are all women, some all young, some all old – we have to build inclusion, diversity, and open feedback within each team and across teams.

4. People are rewarded for skills and contribution, not position.

Finally, the network of teams rewards people for their contribution, not their “position.”The days of “positional leadership” are going away (i.e. “I’m the boss so you do what I say.”) to be replaced by growth and career progression based on your skills, alignment with values, followership, and contribution to the company as a whole. Our chapter “Leadership Awakened: Generations, Teams, Science” describes our findings here.

These HR and organisational changes have been taking place for years, but are now accelerating because of the widespread use of digital technology, a demanding younger workforce, and the need for more rapid business innovation. Artifacts like organisation charts, job descriptions, performance appraisals, and career paths are being reinvented, redesigned, or even thrown away before our eyes.

The Research: Top 10 Trends We Discovered

The title of our report, “The New Organisation: Different by Design” (which is also the theme of our 2016 IMPACT Conference on April 25, 2016) came from our detailed study of global trends.

This is our fourth year conducting this research, and this year we had more than 7,000 respondents in more than 130 countries. We analyzed and sorted the data by industry, company size, and geography and found that the trends we highlight are both global and important to companies of all sizes.

Here are the ten trends.

Fig 3: The Ten Deloitte Global Human Capital Trends for 2016

On the topic of structure, the research found that only 26% of large companies (> 5,000 employees) are functionally organised today (ie. sales, marketing, finance, engineering, service, etc.) and 82% are either currently reorganising, plan to reorganise or have recently reorganised to be more responsive to customer needs. The issue of structure is quite dynamic as we all know: among these companies only 8% believe their structure is optimized and only 4% have no plans to change.

As we talked with companies and explored this issue, we realized that the drivers of this trend are digital technology, information transparency, demographics, and business disruption. Cisco, GE, Cleveland Clinic, and most of the other companies we interviewed told us stories about how their functional structures were obsolete, and that this new “team-based” structure was one that appealed to Millennials, drove innovation and customer service, and was now possible to manage well because of the widespread use of digital technology to share information.

Many of us remember the old fashioned “matrix organisations” which were popular in the 1980s. Well today the “matrix” makes a company look more like a series of Hollywood movies, where people take their skills and functional expertise, they work on a “project” or “team” or “program” to get work done, and as they learn and the company adapts, they move into another team over time.

While there are still senior executives in the company, leadership now becomes a “team sport,” where leaders must inspire and align the team, but also be good at connecting teams together and sharing information.

General Stanley McChrystal, in the book Team of Teams, describes how this structure helped the US Army during in the war in Iraq. He had to dismantle the functional structure in place, build these teams, empower team leaders to take charge, and build a digital information center to help these teams coordinate. This story of “coordinated but distributed operations” is what’s happening in almost every company we talked with, but the talent and HR practices are still behind.

Leadership: More Important than Ever

As the data in the trends chart shows, the second issue companies now face is leadership – an even bigger problem than in our 2015 study. 90% of companies cite leadership a major problem and the percent that rate the problem “urgent” went up to almost 2/3 of all respondents.

Fig 4: Leadership: generations, teams, science

Why is leadership such an issue? Quite simply because the leaders we need today must be agile, they must learn fast, and they must be connected throughout the organisation. The customer service team, sales teams, or marketing teams in your company are often led by mid-level leaders, many of which have grown up in the function. They must have hands-on leadership skills and they must both lead the team and interoperate across teams, a set of skills not always present in the old fashioned hierarchical organisation.

I had a meeting with the CEO of one of the fastest growing companies in India last Fall and he put it clearly:

“We have no room for ‘general managers’ any more. If our leaders aren’t functional, hands-on leaders, I don’t need them around. Information flows easily from team to team and city to city, I don’t need managers in the middle to generate reports and tell me when one team is behind or problems are taking place.”

In his case, the company is designing its business around digital information centers, shared goals, and mobile platforms that help employees communicate and share information instantaneously. In most companies that kind of infrastructure is just being built, so the shift from “the hierarchy” to “the network” is very much a work in process.

The Importance of Culture and Engagement

One of the biggest drivers and facilitators of the “new organisation” is the need to drive culture, employee engagement, learning, and feedback throughout the company. The third and fourth most important trends were culture (86% rated important) and engagement (85% rated important).

This makes perfect sense. Millennials, which now make up more than 50% of the workforce (more in many countries), are looking for mission and values at work, and when they work in small teams they need a shared culture to ensure that strategies, programs, and compliance takes place in a consistent way. We’ve done many studies of compliance programs, for example, which always show that building a “culture of compliance” is far more effective than giving people tools or processes to make sure they do as they are told.

Fig 5: Culture: key to strategy, execution, and alignment

What is culture and how do you measure and manage it? This topic is on the minds of CEOs, investors, and business leaders around the world. Our research tries to unlock the secret of building a high performing culture, and I would encourage you to read the section “Shape Culture, Drive Strategy,” or the article “Why Culture is the Hottest Topic in Business” to understand ways to help you define, monitor, and better align your culture.

Coupled with culture, the topic of employee engagement continues to be urgent as well.

As we wrote about last year and I describe in the Simply Irresistible Organisation research, we also know that employees today operate more like “volunteers” than like indentured servants or “employees.” They are busy and often “overwhelmed” with work (read our article on The Overwhelmed Employee for more), they are active on social networks (where they can browse for new jobs or receive job offers), and they openly share information about your company and their boss. If they are not inspired and engaged at their work, they drift away and you may find yourself with a large organisation operating with low performance or inconsistent customer service.

Fig 6: Engagement: Always On

The issue with employee engagement today is that we have to build an “always on” listening process, one the opens up streams of feedback and concerns in a way that helps leaders immediately spot problems and design solutions that make employees more productive, aligned, and engaged at work.

This is a major thrend sweeping through HR departments around the world, bringing the world of I/O psychology, survey and feedback technology and People Analytics together. I recently talked with a large insurance company who is looking at employee engagement data, pulse survey data, exit surveys, performance ratings, and job mobility in an integrated new system. They expect this new platform to give them immediate insights into operational problems throughout the organisation, help them design better employee benefits and reward systems, and identify management problems quicker than ever before.

What is the relationship between Culture and Engagement? While many vendors are mixing the words somewhat randomly, our research shows that they are directly linked, but not the same thing:

Fig 7: Culture vs. Engagement

If you take the time to define and align your culture, you now have a set of tools to help measure and manage engagement. Together these new practices in HR give you a dashboard and set of alignment tools to make sure your “network of teams” is operating well around the world.

Learning: The New Fuel of the Organisation

The topic of learning, which 84% of surveyed companies rated important, increased in urgency by 10% over last year.

Our research shows two important shifts here:

First, today learning is “owned by the employee,” so companies have to provide a rich set of learning experiences on the job, enabling employees to continuously train and educate themselves. The adoption of MOOCs and advanced video learning more than doubled from 2015, as the corporate training department shifts from one of “education” to one of “building a learning experience” at work.

Second, there is a major trend toward career development, professional development, and upskilling in the workforce. As I like to describe it, today “The Learning Curve is the Earning Curve,” and people now flock to companies that can give them the opportunity to grow and develop.

There is an urgent rush to skills around the world, forcing high performing companies to provide professional skills, technical education, and career development in order to attract great people. Most major retailers, for example, now offer tuition reimbursement for hourly workers and early career management programs are becoming popular again.

Fig 8: Learning: Employees take Charge

In today’s “network of teams” organisation, skills and capabilities are the currency of success. The corporate learning industry is trying to adapt, as we provide an “always on,” high fidelity learning experience through all phases of an employee’s career.

Design Thinking Takes Center Stage

This new organisation, which empowers people through shared goals and a team-centric structure, has to be designed to help people get things done. This is why the next trend we identified is the huge interest and need for design thinking, in areas like HR, learning, performance management, and the entire work experience.

Fig 9: Design thinking in HR: Crafting the Employee Experience

As we wrote about recently in our article “HR for Humans,” people today don’t just “do what’s best for them” at work – they behave as humans, and we need to make work simpler, easier, and more developmental in every way. This leads to a whole new way of designing HR, learning, and talent programs – based on simplicity, a focus on only what’s important, the use of mobile apps, and a core of user-centric design. The old days of building an end-to-end process for recruiting, onboarding, performance management, or career development are going away. Now we look at each employee’s role in the company and we design “curated experiences” that help them learn and progress.

A New Model for Management

Coupled with the change in organisational structure and talent practices is major shift in management thinking. Every decade or so we rethink how management works, and right now we are entering a new era.

Today, as the chart below illustrates, we no longer think of executives as “kings,” but rather as facilitators, strategists, and team leaders who can inspire and empower teams to succeed. This new concept, which has become fundamental to management books and practices over the last few years, is coming from a realization that the old fashioned, hierarchical leadership models just don’t work today.

Fig 10: The Evolution of Management Thinking

There are many implications of this shift: what high performing leaders do, who we promote to top leadership, and how we design reward and alignment systems to help leaders contribute. But the biggest symptom of this change is the enormous trend to reinvent performance management.

People keep asking me “how should we reinvent performance management?” and what I tell them is “think about how you want to reinvent management!”

The old fashioned once-per-year annual review is going away, to be replaced with a more open, transparent, “always-on” process. Our research shows that over 70% of companies are simplifying the process, and we see a dramatic shift away from “forced ranking” and “numeric ratings” toward programs to facilitate feedback, encourage coaching, and evaluate people on contributions broader than their individual numeric or project goals.

As leaders of teams and networks, we have to promote practices that bring people together, help people develop, and also focus on topics like onboarding (people change teams regularly), work-life balance, career transition management, and wellness. These practices of HR are hot growth areas today because companies are realizing that if we can’t help people operate in the team, transition from team to team, and stay healthy – we can’t perform as a business.

Do Away With the Organisation Chart: Help People Build Careers

One may ask, does this “New Organisation: Different by Design,” even need an org chart? Of course people need to know how the company is organised, who is in charge of what, and where to go for information and decisions.

But as our research shows more and more, the days of the “org chart” are starting to disappear, because the organisation itself operates more like a sports team or consulting firm, and less like a top-down bureaucracy than ever before. What we really need today is a “network analysis” of the company (the discipline is called ONA) that tells us who to call for what, regardless of where they work. (I believe Organisational Network Analysis is an important new trend and a valuable tool for HR and management as we learn to manage in the network model.)

Let me give you an example. A large, well-known technology company recently spent a day with us to help redesign their programs for career development, in their quest to change their culture toward that of innovation, creativity, and technical excellence. We found, after talking for several hours, that one of the biggest obstacles in the way was “job titles” and “job levels.” The company had developed such a culture of “up or out” that people were unable to move to important new roles (many of which were very strategic) because they felt they were not “promotions” and it would not “improve their level.”

This kind of thinking, which we have institutionalised around the world for decades, has to go away. In today’s digital workplace the value of an individual can be enormous, as long as they have the skills, passion, and network connections to do what is needed. Why would we penalize or hold back someone’s ability to grow by telling them that only by moving “up” can you progress in the company?

We decided after this workshop that the whole idea of a “HIPO (high potential)” is now obsolete, and we have to empower everyone to grow through lateral projects and roles, continuous development, and challenging assignments. Yes there will be levels, but maybe we only need 5 or 6 in the company, not the 30-40 detailed levels they have today.

Growth in People Analytics and Emergence of Digital HR

Which gets me to our final two trends: the emergence of People Analytics and what we call Digital HR. People Analytics, a discipline we labelled “stuck in neutral” last year, has started to take off. The maturity of this discipline doubled this year, and while there is still much work to do, this has become a major new discipline within HR and business.

Fig 11: People Analytics: Gaining Speed

My experience with analytics, after many years in this market, is that we have hit the “knee in the curve” and growth will greatly accelerate this year. If you’re interested in this space, please read the chapter People Analytics: Gaining Speed or look through the article “Ten Things I’ve Learned in People Analytics.” 

We couldn’t write this report without taking a hard look at HR technology as a whole. Well as looked across all the management, structural, talent, and leadership issues companies face, we found that HR is going through a digital disruption of its own. While cloud computing has radically changed the way we buy HR software and develop HR platforms, an even bigger change is happening in the way we design and build HR solutions.

Digital HR, as we decided to call it, is a new focus on building HR solutions that are experiential, designed for mobile apps, and built through design thinking and behavioral economics to help people get work done. We are shifting HR’s focus away from “process and programs” toward “strategies and solutions” that help people get work done. This means HR departments have to understand and learn how to build feedback, coaching, goal setting, and development programs that look and feel like apps, are easy to use, and fit into the context of work.

Fig 12: Digital HR: Revolution not Evolution

Digital HR is not only a way to leverage new technology, it is really the next wave in our efforts to facilitate the new world of work. It’s a new way of building HR solutions, driven by analytics and behavioral economics, reflecting the new model of work, new roles of leaders, and the way people now work together in a peer to peer basis. We developed a set of case studies in the research, and we will be talking much more about this new world in the coming months.

(One of the new challenges to HR software providers, by the way, is building systems that facilitate the dynamic development of teams. Ashley Goodall, the head of talent and development at Cisco, believes the company has more than 30,000 teams at any time, with people constantly changing teams and moving into new teams at any time. HR software vendors now have to build tools that facilitate the always-changing nature of teams, so we can align goals, measure feedback, and identify leaders on a dynamic basis.)

The New Organisation: Designed for Us as People

As I reflect on the hard work we did to complete this research and understand the findings, I’m left with one final thought. The new organisation we identify and describe in this research is not just an artifact of technology, disruptive change, or the demanding needs of Millennials.

It’s more than that – it’s a shift away from “corporations as institutions” to “businesses as collections of people:” designed to operate the way we as people like to work.

The new organisation and talent models we describe are not just trendy, they’re natural to us as people. As I studied for this research, I found many studies which show that we as humans like to communicate, collaborate, and operate in small groups. We are essentially tribal animals, and we like to be part of something bigger than ourselves, connected locally to people we like, respect, and can enjoy. (Google just published its research on teams and it shows that we operate best when the organisation builds trust, respect, and inclusion.)

The 1960’s organisation, which looked like a hierarchy or an industrial institution, with executives who have private parking spaces, executive washrooms, and thickly carpeted offices at the top of the building with expansive views, is becoming a dinosaur. Yes executives will always like power and luxury to compensate them for their hard work – but today if they want to succeed they must learn how to tap into the power of every individual, every team, and figure out how to bring the network of teams together, aligned to fulfill on the needs of customers and the organisation as a whole.

Think about who really “runs” your company: generally, retail companies are run by store managers; sales teams are run by sales leaders; consumer goods companies are led by product leaders; consulting teams are led by strong consultants; manufacturing companies are run by plant managers; and software and technology companies are led by engineers. If you come to grips with the potential to empower teams, make the teams work, and bring the teams together – you’ll find that your company, regardless of how large or small it may be, can flourish and grow like never before. It’s human nature for us to love our work if we “own it” – so part of this new organisation is to let every person “own their work” and contribute in their own special way.

This research identifies new models to drive performance, employee engagement, and business growth in every industry. The ten trends we identified: structure, leadership, culture, engagement, learning, design thinking, Digital HR, analytics, and workforce management – come together to serve as a roadmap for your organisation’s journey into the future.

I recommend you read this report in detail, give us your feedback, and let’s talk about these issues in the coming year. The digital world of work is here, and our ability to build this “new organisation, different by design” is more important than ever for all of us.

By Josh Bersin.

This article first appeared on Joshbersin.com.