How organizations can adapt in the digital age
COMPANIES and organizations in the digital age are dealing with dynamic, fast and complex environments. But how can they adapt their operating systems to achieve their goals?
The Ready, a firm that specializes in helping companies with their organizational design, says this age calls for a rethink of the hierarchical, bureaucratic system that organizations are used to.
Aaron Dignan, its founder, said the traditional way of work as “top-down” and much about control worked well during the time when it was invented — “the turn of the century when everything was railroad and simple factories.”
“Now we work in this digital age, where Amazon, Google, Facebook, and everybody really changing the way we communicate and engage . . . it’s created a lot of more dynamics, speed, challenges, frankly, to that way of working,” he said in a media roundtable discussion earlier this month, when he was in Manila for a leadership conference of Golden ABC, Inc. and its holding company LH Paragon, Inc.
Mr. Dignan has advised companies including General Electric Co. and The American Express Co., and has delivered talks and presentations at events and fora, including the TED Conference and Digital Hollywood.
He said at present, organizations that succeed have self- organizing teams that value transparency, are fast-moving and quick in making decisions.
One way of changing an organization’s system is to give up its “addiction to planning and control,” Mr. Dignan said, citing as an example the safe annual plan.
“The classic example is, I do a one-year plan, and by three months into the year, the plan is wrong. But the plan makes me feel safe, as opposed to I experiment and I learn every month, and I’m always steering the ship. That doesn’t feel as safe, but I’m actually much smarter. I’m de- risking faster, I’m removing obstacles, I’m learning what works and what doesn’t work,” he said.
Organizations can also do away with the culture of avoiding honesty and confrontation, he said, adding that they can benefit from creating a healthy culture where everyone can feel safe to give feedback.
“It’s tough but it has huge value,” Mr. Dignan said.
Companies must also clear its organizational debt, or the built-up bureaucracy and red tape that hinders fast action and productivity.
“The thing with bureaucracy is it builds up all the time through good intentions,” Mr. Dignan said. “We add layer upon layer of rules, red tapes, and boundaries and restrictions, and structures . . . suddenly it’s hard to get anything done because we’ve taped off every way that you can move.”
He compared clearing the debt to opening a kitchen drawer or garage and thinking about eliminating things that are no longer needed.
“It’s about stopping and thinking, ‘ What’s in our way? What’s actually preventing good work? What are the things that don’t make sense?,’” he said.
Mr. Dignan said that in dealing with workers with varying ages in the workplace, organizations can promote a cross-generational mentorship, where workers from different generations can teach one another.
He also noted the importance of creating a “marketplace of roles” where the skills are given prime importance over the position held by the workers. This marketplace means people can be assigned to different teams loosely depending on what needs to be accomplished, deeming the age issue unimportant. An older person can have a younger boss.
“It’s important we focus on the roles that we want to play, not the position,” Mr. Dignan said. “It’s about . . . letting people hold multiple roles in multiple teams where they can do their best work. It means we team more dynamically.”
“I might be forming and disbanding teams more regularly, I might be partnering with people more fluidly,” he said.
The transition will be absolutely difficult, he said, but leaders are starting to realize that change, which takes time, needs to be done.
“One of the things pushing this is that leaders start to realize that in order to unlock their visions, things have to change,” he said. “People are realizing — whether it’s hard or not, is irrelevant — if we want this, we need to do that.”
He said these changes are not done overnight.
“It’s actually about building that muscle, that continuous improvement . . . The main thing about Amazon that’s interesting is that they learn fast. That’s one of their main goals. So I think we can all borrow from that,” he said.