Ironically, we’re back in the era of creative destruction. Organisational paradigms which once may have persisted for generations can now be overturned in a few scant years.
For example, IBM is back-tracking on a development which is still only just gaining traction more broadly, remote working.
The Wharton Business School’s Peter Cappelli analysed IBM’s move, itself a response to a more “agile” model, predicting it might presage more widespread changes.
“IBM is switching to a business methodology known as ‘agile management’ which necessitates the end of telecommuting for many,” he said. Agile management emphasises highly flexible cooperation, face-to-face communication and daily interaction as keys to fostering innovation, according to Cappelli. “You really need people together in order for this to work.”
He added a rider which is perhaps the most significant insight – there are no longer clear “right” models for organisations.
“That doesn’t mean it doesn’t make sense for other people in other organisations to work from home,” he said. “The boundaries on that are always changing.”
The key challenge with organisational change, if it is to be truly responsive to customer expectations, is customers are profoundly individual.
Take the key shift in financial services towards digital banking. A recent J.D. Power survey – of American banks - found 71 per cent of bank customers visited a branch over the past year. On average 14 times.
Even among the tech-savvy millennial generation, 71 per cent visited a branch, with an average of 11 visits, compared with 49 per cent who use mobile banking.
Critically the survey found overall satisfaction among those who visited a bank branch within the past year was 27 index points higher than among those who didn’t.
People still like people. Improved automation and artificial intelligence are unlikely to change that. The challenge for organisational change is how to best deploy the humans.
In a case study from a paper for the Culture & Change Management for Business Transformation Summit, NSW Transport, which reorganised itself around design thinking, Agile delivery practices and better collaboration, created a concept of Minimal Viable Bureaucracy (MVB).
“In the spirit of Agile we have established the principle of MVB,” Tony Braxton-Smith, Deputy Secretary, Customer Services, TfNSW, said. “This means the least amount of bureaucracy necessary in order to deliver a specified outcome.”
Four-box-matrixers BCG have their own, monumental work as part of their “The New New Way of Working Series”, Twelve forces that will radically change how organizations (sic) work.
“A tidal wave of change is coming that will soon make the way we work almost unrecognisable to today’s business leaders,” the report proclaims. “BCG identified 60 major trends propelling this tidal wave, which we’ve grouped into 12 primary forces.”
“These forces, or megatrends, fall into four categories. The first two address changes in the demand for talent: technological and digital productivity and shifts in ways of generating business value. The second two address changes in the supply of talent: shifts in resource distribution and changing workforce cultures and values.”
This new epoch of organisational reorganisation has only just begun. To revert to McKinsey: digital technologies and processes have penetrated only about 35 per cent of the way into the average industry, meaning merely a third of a typical company’s products and operations which could be digitised have been.
Andrew Cornell is managing editor at bluenotes