Modern organisations were run, during their first century of existence, according to mechanistic models. The organisation was conceived as an efficiency-driven pyramidal hierarchy. The model, which today we define as Taylorist, worked well for decades, creating disciplined organisations in which thinking was done at the top and execution in the rest of the organisation. This model assumed a relatively predictable world and structurally placid surroundings, on which the organisation could impose its logic. Perhaps the epitome of this logic is Henry Ford's famous answer about the colour of the car his customers could buy: whatever they wanted, as long as it was black.

The world, however, has changed. New technologies have emerged that allow a radical personalisation of products/services. People and societies have also changed. Consumers expect different treatment and so do workers. The old pyramids are giving way to new organisations, called digital. In these, teams gain autonomy to achieve a purpose and have a free pass to make choices.

In this world, leaders are faced with a critical decision: to continue doing what was done, probably with more effort and less results. They follow the order of Lewis Carrol's Queen of Hearts: they run as fast as they can to stay in the same place. It is a recipe that combines the comfort of the known with the threat of stagnation. The approach is particularly appealing to less sophisticated and less talent-dense organisations.

Alternatively, organisations can move in the direction of innovation - of products, but also of management and processes. In this case, the quest for improvement guides what the organisation does. Efficiency matters, but agility and responsiveness to customers even more so. The agile organisation makes the customer the centre of attention, but treats employees with the due dignity to those who do the work. These organisations use a set of practices:

- They define a clear polar star - they clarify to everyone what is important from a mission and customer perspective.

- They give people room to interpret and adapt the meaning of the North Star to better serve the customer.

- They define the rules of the game, so that customers understand the role of those serving them - as Ritz Carlton says: "we are ladies and gentlemen serving ladies and gentleman".

- They know that innovation is often born out of being aware of opportunities for improvement - and that everyone should look for those opportunities - not just one thinking layer as in the past.

This transformation, which together with my colleague Arm├ęnio Rego I discuss in the book Agile: Organisational Transformation for the Digital, poses important organisational and management challenges, and not only technology management issues. It was also to answer these questions that we created the┬áExecutive Master's in┬áAdvanced Management. We believe that those who better understand this challenge will be better prepared to thrive in a world where creative routines are worth more than efficient ones.

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This article is a republication of Forbes magazine.

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Published in 
1/6/2022
 in the area of 
Business & Strategy

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