(Author: Tamara J. Erickson, originally appeared at London Business School blog)
Successful companies in any era have organised in ways that optimised their ability to meet their greatest challenge – to take advantage of the biggest opportunity presented at that moment in time. For example, in the early industrial era, companies developed standardised processes and specialised divisions of labour to maximise their ability to produce at scale.
Today, much of our most important and differentiating work depends on the creativity and initiative of individuals. The companies that will become icons of this century will be those that find ways to leverage both human and machine-based intelligence effectively – harnessing small units of knowledge, detecting patterns, providing new insights or innovating to create new capabilities.
Companies that excel at optimizing intelligence will look very different from those constructed in the industrial model to optimize scale.
How work is organised: a shift to tasks
Work will be organised first by project or task, rather than by job or role. People may still have titles, but they will be time-bound and action-oriented. Some people will take on multiple projects at a time. Some projects will be short (months); others very long (perhaps a decade or more, for example in the space industry). Compensation will be tied to the project. And, ideally, people will have great flexibility in choosing or bidding for assignments.
This approach will facilitate the use of talent in a variety of arrangements, providing businesses the ability to tap the optimum skills for each project. It will also provide variety and challenge to young workers through the opportunity for easy, natural movement ‘horizontally’ and allow the utilisation of older workers who want to contribute in meaningful ways, but not at the same pace as at earlier points in their lives.
How work is integrated: use real-time coordination
Have you ever watched two young people go through the process of meeting face-to-face? Their approach rarely involves scheduling in advance or even planning about a place and time. Instead, they’re more likely to communicate their current locations – to exchange coordinates – and then home in on each other like ships using radar.
This approach – real-time, need-based, location-driven – is one that will characterise many processes in organisations optimised around intelligence. And as we build processes using coordination, companies’ need to “own” resources will lessen, including the need to employ workers full-time. It will be possible to find the necessary resource or talent where ever and whenever required, heightening companies’ ability to leverage intelligence broadly, accessing the best resources.
How organisations relate to those who work: new ways of staffing
Organising by task and using coordination to find the best resource when needed, drive to the third major change: organisations will no longer be comprised primarily of full-time employees, but will constitute a flexible community of people who work. These individuals will be in a variety of arrangements – full-time, part-time, contingent, out-sourced, consultative, expert-for-hire, and others.
Companies will need a new function – like talent agencies in the film industry – to tap the best person for the specific task at the specific moment in time and to serve as the “home base” for this complex talent corps. As the relationship with workers takes on an episodic nature, the need to provide continuity between episodes of work, similar to the need to maintain continuity with customers between purchases, will be critically important. A strong employment brand will become essential.
At the same time, metrics will change. Tenure will diminish in overall importance. A more relevant metric will emerge, related to “fit for purpose” – the extent to which individual projects are staffed by people with the ideal skill sets.
How differentiating value is created: discretionary effort
The work that adds the greatest value in intelligence-based organisations comes from tasks like innovation, collaboration, and customer service – areas that require individuals to dig deep and willingly do their best. It requires them to invest their own discretionary effort.
A core challenge for organisations, therefore, is to create environments in which people want to give their very best. Even individuals who have joined the organisation for a brief, specific task, have got to get swept up in the sense of what the company is about and why doing this work is important and meaningful. They must become engaged.
Creating engagement requires that organisations have a sense of confidence about who they are . . . and comfort that it’s not all things to all people. Excellent companies are able to explain what it means to work in their organisation, why they are special. They recognise that ‘meaning’ is the new money; it’s what motivates and inspires people to create extraordinary value.
The challenge of leveraging intelligence calls for very different approaches to organisational design and leadership compared to industrial models. Success depends on the organisation’s ability to sustain innovation and collaboration, to remain open to new ideas and to invite all interested parties to engage around meaningful work. The company must be deeply rooted in meaning, values and the uniqueness of its mission. The transition from past ways of organising and leading will not be an easy one, but it’s the path toward ongoing success in this newly-evolving intelligence-based economy.
Tamara J. Erickson is a McKinsey Award-winning author and a widely-respected authority on leadership, the changing workforce, collaboration and innovation, and the nature of work in intelligent organizations. She has four-times been named one of the 50 most influential living management thinkers in the world by Thinkers50, the respected ranking of global business thinkers. Erickson is an Adjunct Professor, Organisational Behaviour, at London Business School, where she has designed and co-directs the school’s premier leadership programme for senior-most executives, Leading Businesses into the Future. She is the Founder and CEO of Tammy Erickson Associates, a research-based firm dedicated to helping clients build intelligent organizations.