Organizational Structure

Changes in technology are prompting organizational leadership structures to change as well.  As the use of digitization, analytics, and AI progresses and extends its reach past industries and geographies, there has been additional points of thought regarding the competitive landscape beyond products and services: the company structure. For a company to avoid falling behind in the territory of Chapter 11 bankruptcy, like Sports Authority, Delta Airlines, American Apparel, and Toys R’ Us have done in recent years. In large organizations, the average reorganization occurs every 24 to 36 months, while the average reorganization takes more than 18 months.

Some companies continue to experiment with new approaches. Successful reorganization allows for an organization to be adaptive and fast-moving that can to new opportunities and hurdles. Recent strategizing sees intelligent decision making further down the hierarchical chain. Originally data would be centrally analyzed, evaluated, and then executed upon. The new-thinking organizations in some instances allow decision-making to go beyond employees, to consumers and partners. This method functions like a network, rather than a hierarchical structure.

At heart of this new philosophy are those that prioritize speed. Jeff Bezos stands by what he calls “high-velocity” decisions, which are decisions made with “somewhere around 70 percent of the information you wish you had.” Anything in excess of such a number prompts one to be “too slow”.

The term “emergent strategy” is increasingly appearing in structure chains. Such strategy focuses on developing goals with a not defined end point. In today’s environment, many of the critical skills employees’ need are changing rapidly due to automation and AI. With this in mind, workers need to not just work with machines but also to adapt to the uncertainties in the workplace. Companies such as Alphabet Inc. have developed programs that can apprise engineers’ human judgment about the decisions of individuals, identify which specific employees would receive the most benefit from certain types of learning opportunities, and target teaching behaviors that would inspire colleagues. With such programs we see a transition of decision-making processes that are tasked with occurring in the lower levels of hierarchy.

Keith Knutsson of Integrale Advisors commented, “Companies will always evolve to maximize efficiency. With many of the most successful companies being burdened by red tape, such a technological transition is vital for long-term competitiveness.”