HR Alchemy Part 2: Beware the organisation of the future

This is the second part of my series on Deloitte’s “Global Human Capital Trends” report 2017, in which we are looking at Trend 1 – The Organization of the future: Arriving now

Trend

Deloitte’s report suggests that ‘as networks and ecosystems replace organizational hierarchies, the traditional question “for whom do you work?” has been replaced by “with whom do you work?”’

They suggest that there has been a radical change in the way that high-performing organisations operate today, compared with only 10 years ago; by enabling adaptive teams and networks to work more effectively without traditional hierarchy.

Organisation of the future

At the same time, however, they highlight that ‘many other organizations continue to operate according to industrial age models that are 100 years old or more, weighed down by legacy practices, systems, and behaviours that must be confronted and discarded before true change can take hold’

Perhaps there is a good reason for that.

Thoughts

A vision of the future organisation is all very nice and progressive, and it is likely to sound attractive to many businesses and creative HR types out there – but it isn’t as simple as that.

Those “high-performing” organisations who have already made the shift are typically large organisations who can build complex support structures and have invested in the infrastructure and systems to make it work. Even then, they have no doubt been through a long and iterative process to get it right.

Surprisingly, small businesses may also be in a good place to make the shift relatively easily, helped by their inherent agility and the visibility that leaders already have across the whole organisation – although they will need to be cautious as they grow.

Medium sized businesses may struggle to safely implement many of these agile team based methods without making substantial investment; because they are too big to be naturally agile, while lacking much of the resource and infrastructure that larger organisations have at their disposal.

Risk Areas

One of the crucial elements of the future organisation is the setting of goals and task-based measurement. Systems need to build in the goal-setting and rating process, and there is an expectation that everyone involved will take responsibility for their part.

There is a risk that this starts to sound like some kind of micro-utopia, but it does require somebody to be sitting across the whole thing measuring achievement and performance – and therein lies the first problem. Who is checking to see if a particular goal has been achieved? and who is in a position to identify patterns of poor performance/ or patterns of poor attendance?

These things need to be thought through and addressed, and here are some more:

  • If employees are allocated work via a task based system, what happens if an individual is never chosen? There would not be an obviously fair reason for termination of employment in those circumstances (they are not redundant and they haven’t done anything wrong) – unfair or constructive dismissal claims could result.
  • There is a risk that such a model could mask or harbour forms of unlawful discrimination, in the form of personal or institutional prejudices, which are difficult to prevent or root out, but will become clear and obvious in retrospect (once it is too late).
  • Whose job will it be to manage poor performance or poor attendance? How do you implement a performance improvement plan in an agile environment?
  • Challenging employees may use these agile systems as an excuse for not following reasonable instructions, or manipulate the system to obtain approval/authorisation for certain things, and this could pose a risk on the basis the employment tribunal system and judges are unlikely to understand how it all works for some time yet.
  • The fluidity of task based structures means that it will be difficult to manage pay and reward for employees of each gender carrying out work of equal value, thereby opening up the risk of equal pay claims.

In summary, although it sounds counter-intuitive, it will be crucially important to plan and implement suitable (and relatively inflexible) structures and systems to manage the risk associated with the agility of the future organisation.

If you haven’t already read “Rewriting the rules for the digital age – 2017 Deloitte Global Human Capital Trends” then you can find and download it here:

https://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html

 

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