Do flat, collaborative work structures truly drive innovation?

The key to any form of restructuring or scaling is to understand that a company is an ecosystem that needs clear guidance and leadership.

In the first part of this series, we discussed the types of organisational structures.

For this post, we have gathered the views of Cogs Berlin’s directors, Jan Pautsch and Kimberly Bohle. Together with their team, they have been involved in facilitating change management projects with Cogs clients, helping companies evolve into more adhocratic structures and cultures to drive innovation.

Lately, many companies who implemented the ‘flat’ or holocratic structure as a method to promote innovation and respond faster to market demands are experiencing more pain than the models have promised. The holocratic structure has brought them a myriad of constitutions and coordination along with unimagined difficulties that only surface mid-implementation.

Disturbed and unsettled by the liberation of the lack of hierarchy, many employees become reflective and ask themselves several fundamental questions.

For instance: If job specification and reporting lines become more dynamic, and working arrangements from hours, home working and holidays are flexible, shouldn’t conventional remuneration models and bonus systems be dynamic in response? Also, how is career development and growth achieved in less clearly defined organisational setup?

Because there is no one-size-fits-all solution. People often settle in between for a hybrid organisation structure.

Similarly, in agile project management, where Waterfall and Scrum complement each other wonderfully in a WaterSrum ;-), it is necessary to find an individual solution for new organisation structures appropriate to the needs of the business and its customers.

A business’s transformation to self-organization is about looking for specific changes that fit the current situation in the business.

It is important that the management team has a clear vision of where it wants to go and that the leaders are emotionally one step ahead of their colleagues. And this involves taking into consideration all of the employees and as well as the emotional consequences that come along with them.

Start change at the top, led by engaging

The key to any form of restructuring or scaling is to understand that a company is an ecosystem that needs clear guidance and leadership.

The questions to ask yourselves are: What’s wrong with us now? What needs to change for things to get better? Which changes would bring us closer to these goals?

Therefore, lean is a mindset that must first find its way into the executive floor before teams and units are hectically restructured.

Leadership should ideally be about ‘Engage-and-Align’ rather than ‘Command-and-Control’. This is crucial and shapes not only processes but also the company culture towards a more collaborative, agile and customer-centric organisation.

Managers at all levels must be prepared to abandon old thought patterns and behaviour to break new ground. Interestingly in larger companies, middle management is often the barrier to innovation. This group of intermediate management have been conditioned to report to executive management and seldom have a hand in creatively shaping projects. Because the execution of these projects manifests their role, they are averse to failure.

However, this is completely opposing the fail-fast and fail-forward culture, that is necessary to drive innovation.

Only by failing, one can uncover new learnings and remove irrelevant products or features.

Gaining the courage to address employees’ fears and their resistance to change is one of the biggest challenges when introducing change. But the long-term results are worth the effort. When you are able to get the buy-in support of middle managers, they will, in turn, be able to influence and rally their teams or subordinates. The change would now come full cycle.

It doesn’t always have to be a radical change.

If we believe that a company is an ecosystem, we can take a more biological perspective on the organisation; that the mutual relationship between species in a network is what enables an ecosystem to thrive. The smallest changes that occur within the ecosystem can have major effects in the entire system. Change can be incremental.

In our last part of this series, we will look into tools that an organisation can adopt in a bid to transform your business.

 

To understand your organisation structure and how it complements your business, reach out to Cogs now.

 

To read other parts of this series:

Part 1: Building a modern and collaborative organisational structure for teams and employers.

Part 3:  Tools and techniques to drive collaboration and innovation

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