WORLD ENVIRONMENTAL SIGNALS & TRENDS FOR WINNING ORGANIZATIONS
In 1985 authors, Michael Beer, Bert Spector, Paul R. Lawrence, D. Quinn Mills, Richard E. Walton in “Human Resource Management” (Free Press 1985) predicted these trends,
“Increasing international competition is creating the need for dramatic improvements in human productivity. The competitive crises in the automobile and steel industries are two such examples. American executives look overseas, especially to Japan, and see employment and management practices that appear to increase employee commitment while ensuring companies a long-term supply of people with necessary competencies and skills.
Increasing complexity and size of organizations has resulted in multiple layers of bureaucracy. Some companies are concerned with the high costs of such layers. Others see over-bureaucratization as serving to isolate employees from both the organization and the competitive environment in which that organization must operate. By reducing levels, these organizations hope to put employees in closer touch with their environment, thereby increasing their commitment to the organization as well as their ability and competence to work more effectively. Geographical spread, particularly the emergence of multinational firms, presents new challenges in managing human resources in diverse societies where laws and prevailing social values may be quite different.
Slower growth and in some cases declining markets have dramatically affected an organization's ability to offer advancement opportunities to high potential employees and employment security to long-service employees.
Greater government involvement in human resource practices such as employment security (particularly in Europe) and fair employment practices (in the United States) are causing corporations to reexamine their HRM policies and practices and to develop new ones. In the United States, individual employee suits and class action suits for large employee groups have raised the possibility of costly settlements, thereby increasing the importance of HRM in the eyes of general managers.
Increasing education of the workforce is causing corporations to re-examine their assumptions about the capacity of employees to contribute and therefore the amount of responsibility they can be given.
Changing values of the workforce, particularly relative to authority, are causing corporations to reexamine how much involvement and influence employees should be given and what mechanisms for employee voice and due process need to be provided.
More concern with career and life satisfaction is causing corporations to reexamine traditional assumptions about career paths to provide more alternative career paths and to take into account employee lifestyle needs in transferring employees and scheduling work.
Changes in work force demography, particularly the infusion of women and minorities into organizations, are causing corporations to reexamine all policies, practices, and managerial values that affect the responsibilities, treatment, and advancement of these employee groups”.
Organizations are at the threshold of a monumental change. There is change in the air and trends appears to confirm that thinking. It starts with the changing profile of the workforce. Millennials, Founders and change seekers. It continues with the work environment – eco-friendly, competitive, focused, global, client, devices, diverse, open and tolerant etc. It then follows with technology disruptions. Mobility, devices, wearables, internet of things, artificial intelligence, robotics. Workplace is no longer the prerogative of only the blue pin striped suits. Today intellect dominates the geek. Geeks are an acceptable workforce population and are popular, and many billionaires too. The divisiveness seen in the US elections of 2016 is not the real deal with workforce of the digital world.
“The world is changing and innovating so fast that the future workforce and workplace will need to adjust to new digital norms at a much faster pace than in the past. This means that worker satisfaction and engagement matter more than ever. This would also mean organizational members would move beyond constraints of bounded rationality. One of the challenges found interesting was the concept of the “gig economy.” One may not be familiar with the term, but you’ve probably interacted with at least one of the services (such as Lyft and Uber) and that employ independent contractors. Alarcon defined the gig economy as “an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.” Nin Sandhu in “Digital HR, Innovation, and the Future of Modern HCM”, reports, “ These disruptions have caused new and interesting challenges for many organizations, and here is a look at the top 10 Garr cited for 2016:
Organization design: the rise of collaborations – Could also extend to baby boomers returning
Culture: shape culture, drive strategy – To identify evolving digital cultures
Design thinking: crafting the employee experience – Focus on the intellect
Digital HR: revolution, not evolution – Throw away AS IS practices
HR: growing momentum toward a new mandate – Need to move towards people focus
People analytics: gaining speed – Wanting to know “Why” as against focusing only on :how”
Learning: employees take change – Demonstrating the need to share
Engagement: always on – Connections, relationships, fostering values of collaboration
Leadership awakened: generations, collaborations, science – Rise of the responsible
The gig economy: distraction of disruption? – Collective power.
Oracle’s Alarcon indicated that this new gig economy isn’t some sort of fad—it’s here to stay, and it’s going to affect how organizations engage and connect with this workforce. I completely agree with that sentiment and believe there will be complex new challenges that those organizations will face”.
Today these trends stand vindicated. The evolutions in the field of communication, networking and information technology have made the “geographical distance” irrelevant and of limited consequence in business. Businesses of today are neither limited by geographical or physical boundaries, nor are they organized around national/regional concerns.
The First Trend: The first trend towards opening up of erstwhile protected markets is only likely to intensify competition further and eliminate the already thin margins. There are, of course, no debates against it. Corporates have come to realize globalization inevitability, although to some it causes considerable amount of fatigue (just to cope with this changing mindset)
The Second Trend: This second trend that is reminiscent of a depression is incongruous with the general perception of industrial growth. In a nutshell, as in Alice’s Wonderland, you have to keep running, just to be in the same place. To contend with this challenge, the firms of tomorrow will be expected to be significantly different from those of today.
The Third Trend: The third trend is in the discovery of their latent potential by the sleeping giants. Even now 20% of the world population consumes 80% of the world’s resources. Contemporary development technology and communications have woken up the remaining 80% to emulate the 20%. Sleepy villages comprising of somnambulistic human forms in the Third World countries are now awakening to the clarion call of consumerism.
The Fourth Trend: the field of organization theory has been a rather staid one since the time Adam Smith converted pin making into an elaborate organization theory. While there have been several subsequent theorists who have dealt with the social and behavioral aspects of the organization, the pyramid still exists. While considerable amount of research has been accomplished into the behavior of organizational members and the organizational processes, the fundamental way of doing business has changed, yet not changed over the last century.
However, as Alvin Toffler says in “Future Shock”, the rate of change is not linear but increases exponentially. This means that the quantum of change that occurred in the last fifty years may possibly be equaled and radically paralleled by the changes in the next ten years.
It is hence natural that the anxiety about the future and the coping mechanisms needed are also increasing exponentially. Hence unlike the incremental changes in Organization Design in the 20th century, the 21st century is expected to ring in a hitherto unknown and a new business paradigm. All the above trends point to one possibility very clearly. That ushering in the new century is likely to be more difficult than making New Year resolutions. Answers to several questions are simply not there.
The Fifth Trend: Digital is here to stay - Why have high performing manufacturing organizations discounted for their future earnings despite their potential to do well commercially? Why are companies in the digital knowledge industry positioned more competitively for the 21st century? Why would Internet search engines with unknown years of paybacks have a market capitalization several 100 times higher than previously known blue chips?
The hopes and anxieties felt in corporate boardrooms have their genesis in these new trends. Coupled with the above trends in business, which the organization of tomorrow will have to contend with, there are some other realities that are going to drive the Knowledge Organization. There is a significant and dominant gap between business intent and achievement.
Figure – Understanding Disruptive Strategies and Transformation Issues - A Consumer Product Company Case Study
In, Aligning the Organization for its Digital Future, in MIT SMR 2016, authors Gerald C Kane, Doug Palmer, Et All, write, highlighting their findings, trends and practices:
· “Creating an effective digital culture is an intentional effort: Digitally maturing companies are constantly cultivating their cultures. Nearly 80% of respondents from digitally maturing companies say their companies are actively engaged in efforts to bolster risk taking, agility, and collaboration. Only 23% of companies at the early stages of digital development are doing so.
· Senior-level talent appears more committed to digitally maturing enterprises: Companies that give their senior vice presidents, vice presidents, and director-level leaders the resources and opportunities to develop themselves in a digital environment are more likely to retain their talent. In contrast, approximately 30% of such leaders who lack such opportunities are planning to find new jobs in less than one year.
· Digitally maturing organizations invest in their own talent: More than 75% of digitally maturing organizations surveyed provide their employees with resources and opportunities to develop their digital acumen, compared to only 14% of early-stage companies. Success appears to breed success — 71% of digitally maturing companies say they are able to attract new talent based on their use of digital, while only 10% of their early-stage peers can do so.
· Soft skills and change trump technology knowledge in driving digital transformation: When asked about the most important skill for leaders to succeed in a digital environment, only 18% of respondents listed technological skills as most important. Instead, they highlighted managerial attributes such as having a transformative vision -building organizations, change drivers, urgency to align, master management, workforce teams - (22%), being a forward thinker -vision, futuristic, transformative (20%), having a change-oriented mindset (18%), or other leadership and collaborative skills – teaming, cooperating, joining in, (22%). A similar emphasis on organizational skills above technical ones for succeeding in digital environments was also reported for employees.
Figure - Digital Transformational Change - Individual Level
· Digital congruence is the crux: To navigate the complexity of digital business, companies should consider embracing what we call digital congruence — culture, people, structure, and tasks aligned with each other, company strategy, and the challenges of a constantly changing digital landscape. For example, a conservative and hierarchical organization populated with energetic entrepreneurs may not be able to harness their drive and energy. Similarly, an organization with a flat and nimble structure may still struggle if its culture fears risk. When culture, people, structure, and tasks are firing in sync, however, businesses can move forward successfully and confidently”.
Tim O’Reilly in MIT SMR 2016 trends paper, Managing the Bots That Are Managing the Business, writes, “ A typical programmer in a 20th century IT shop was a worker building to a specification, not that different from a shop floor worker assembling a predefined product. A 21st century software developer is deeply engaged in product design and iterative, customer-focused development. For larger programs, this is a team exercise, and leadership means organizing a shared creative vision.
Technology is not a back-office function. It is central to the management capability of the entire organization. And companies whose CEOs are also the chief product designers (think Larry Page of Alphabet Inc., Jeff Bezos of Amazon, or Apple under Steve Jobs) can outperform those whose leaders lack the capability to lead not just their human workers but their electronic workers as well. In 20th century organizations, you gained influence by gaining budget to hire more workers. In 21st century organizations, you gain effectiveness through your ability to create more workers — of the 21st century variety. Even in jobs that are not considered “programming jobs,” the ability to create and marshal electronic resources is key to advancement. A salesperson who can write a bot to “scrape” LinkedIn for leads has an edge over someone who has to do it manually. A marketer who can build an online survey or data-gathering app has an advantage over one who has to hire an outside company.
A designer/developer who can build a working application prototype is more valuable than a designer who is only able to draw a picture. Managers must become product and experience designers, deeply engaged with customers and their needs, creating services that start out as a compelling promise and get better over time the more people use them, via a “build-measure-learn” process. A service like Uber is based on a deep rethinking of the fundamental work flows of on-demand transportation (what used to be called “taxis”) in light of what technology now makes possible. Before Uber, who would have thought that a passenger could summon a car to a specific spot and know just when they were going to be picked up?
Yet that capability was already lying latent in smartphones. There is an arc to knowledge in which expertise becomes embodied in products. Workers can be “upskilled” not just by training but by software assistants that allow them to do jobs for which they were previously under-qualified. “The Knowledge,” the legendary test that London taxicab drivers must pass, requires years of study, yet with the aid of Waze, Google Maps, and the Uber or Lyft app, virtually anyone can become a driver for hire, even in a strange city. There is a lot of fear about technology replacing workers, but in what I call “Next Economy companies,” technology is used to create new opportunities by augmenting workers”.
Ganesh Shermon
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