The contemporary organizations are very different.
The earlier concept of an organization as internal hierarchies, solid boundaries(often physical), well defined roles and responsibilities (emanating from specialisation, formalization and division of labour), long term strategies, centralized power and stability as the end goal does not work in today’s fast changing and uncertain environment.
Today the hierarchies are eroding, boundaries are becoming more porous and unclear, roles are fuzzy and evolving, strategies are fluid and short term, power is distributed and goal is to become change ready.
The external environment is becoming dynamic and uncertain due to globalization and new developments in the information and communications technologies. Social media revolution on the internet, personal devices explosion and convergence of computing, communication and connectivity have changed the rules of the game.
But the organizations’ internal shift can never be perfect as inertia makes them continue with old ways of working, thus creating misalignments or lack of synch between the internal organizational make up and the external market (or environmental) situation. This misalignment reduces the ability of an organization to perform and continuous inability to perform can lead the organization into a vicious cycle of value destruction. And there are umpteen numbers of such cases around us.
I have identified 5 such areas of misalignments.
Understanding these misalignments can help the CEO to become aware of and do something about the problems on the surface. All these misalignments also are highly interdependent on each other i.e. they feed into each other and do not exist in isolation. Hence, to do something about them, one needs to adopt a whole systems approach.
1. Social Misalignment
The individuals (employees) are empowered like never before. They can obtain any information, connect with anyone and express themselves at anytime regarding anything. With the technology available to them as individuals and services existing on the internet, they have got a new voice, which is important to notice. This voice can make or break a brand (or even a business), allows new values of openness to emerge and provide them with new powers.
The question organizations need to ask is whether their internal social system is equally open and power granting? Many organizations are suffering from this dilemma of power shifting from the top to the bottom or the core to the periphery. But is it really a dilemma? Do organizations have a choice? If not then why resist? Why can’t it be embraced in more meaningful ways?
2. Technology Misalignment
The individual users have the power of the latest technology in the form of smart phones and cloud based services from plethora of providers. They are spending on the latest technology as it serves their needs of remaining connected socially. The question to ponder is that do their organizations also give them the latest technology to use or create policies and frameworks (like BYOD) for them to get access to the latest technology. Well, the answer in many cases is, not really!
3. Change Misalignment
The external environment is changing fast, but is the organization structured in a way to constantly change with it. Many a time, organizations continue to live with mindsets, values and structures, which make them inert, thus not allowing them to change in commensurate measures.
The external processes and their respective scopes are constantly emerging. But more often than not the same is not changing enough internally. People often do not want to change as they resist moving out of their comfort zones. Strategies as a result, often are made for long term. The emergence required with continuous learning and micro actions taken in the market place is equally often ignored.
The question organizations need to ask is whether they are pursuing stability as a goal in a changing market situation and what is that is hindering their ability to change.
For example attrition is handled by filling up the vacant positions and it often is difficult. Can the organization actually see it as an opportunity to allow people who stay with the organization to grow faster amid high attrition? Does the organization have the required capability (like developing people, grooming them fast) to be able to do so?
4. Role- Shifts Misalignment
This point emerges from the earlier discussion on change misalignment. Organizational boundaries are becoming more porous and value chains more fluid. Newer relations are emerging with external stakeholders like customers and partners (suppliers and distributors), which makes the definition of boundaries even difficult.
A lot of value creating processes is situated outside of an organization and are constantly changing.
The roles and responsibilities of relations in such situation are changing very fast. But many a time, the roles and responsibilities of the employees inside are not changing as organizations are still built upon the notions of hierarchy and are rather rigid. The question to ask is that is the organization allowing unplanned, unnoticed and emerging opportunities, situations and issues to emerge or do these issues succumb to role rigidity.
E.g. is there an ability to cross sell amongst different product groups or do different formal groups temporarily collaborating on emerging opportunities by defining new yet temporary structures and roles etc.
5. Customer Needs Misalignment
Due to all the other misalignments, there may be an misalignment regarding the changing customer needs and the organizational understanding of the same. Without proper eye on customer preferences, habits and behaviour, an organization may continue with old products and services. The gap between what is offered and what the customers need can make the organization redundant in the market place. The question organizations need to continuously pose is whether there are shifts in customers’ needs and if yes, how does the organization respond to the same.
Though these misalignments need to be noticed, understood and acted upon by the entire top management (CEO, CXOs and the CIO), I am urging the CEOs here to take a special note.
IT can play a bigger role in becoming instrumental and enabler of bridging these misalignments by creating agile processes (both internally and externally),
helping people deal with fluid roles by leveraging IT (both automationally and informationally) and enabling the top management to distribute power (yet keep the power to control through enhanced transparency).
IT stands to play a big role in handling the five misalignments discussed here and creating truly contemporary organizations.
It is in this premise that the four emerging technological paradigms of Social, Mobility, Analytics and Cloud become very relevant. The five misalignments require an organization to be more agile, collaborative, social and technologically advanced and SMAC can really help them do that. I shall discuss ‘how’ in a separate blog.
The following questions the CEOs must continuously ponder over –
1. How are these five misalignments manifesting in my organization?
2. What is the explanation for the misalignments and the related manifestations? What are the consequences?
3. What needs to be done to handle such misalignments?
4. How can IT help manage such misalignments?
5. What is the preparedness of IT to be able to handle the misalignments?
6.What needs to be done to enhance the preparedness of IT? How can SMAC help?