For the first time in 60 years, there will be a clash of UK and US elections in 2024 resulting in political, market, and economic uncertainty that will test even the most hardened organisations.
The past five years have forced organisations to learn to adapt quickly, with organisations’ resolve being tested by increased customer expectations, rapidly shifting demand, global economic uncertainty, widespread pandemic-forced shutdown, and now the rise of artificial intelligence. Yet, organisations cannot expect to stand still. An organisation’s ability to rapidly respond to internal shifts and external pressures has always been important for growth and market share. However, with 2024 looming over us, an organisation’s ability to move at pace is now critical to its very survival.
Yet, while many of us intuitively know that flexibility and speed are critical in the modern world, why do many leaders struggle to introduce these factors into their organisation?
With many organisations continuing to be built on traditional, layered, hierarchical foundations, organisations have maintained minimal transparency, centralised decision-making processes, and directive leadership styles that were designed for a predictable, stable world over a century ago – a world that no longer exists. These layered structures historically provided a clear chain of command that supported efficiency. However, in the modern world, these structures stifle innovation and slow organisations down.
If an organisation has survived recent years, it will know what levers it can pull to stay afloat, how to make decisions in the eye of a storm, and ultimately, whether the traditional structures and processes above hampered its ability to respond to pressure. So, what can organisations do to cut back red tape, minimise bottlenecks and bureaucracy, and ultimately make 2024 a year of growth, not survival?
Bottlenecks and bureaucracy in business occur when organisations maintain high levels of secrecy. Greater information availability enables heightened accuracy and speed of employee decision-making. Yet, many organisations continue to keep the curtains closed on how they operate. Now more than ever, organisational secrecy can promote a culture of misinformation, ignorance and distrust, forcing employees to make decisions without all the facts in front of them.
Some organisations are now opting to, at least partially, unveil their inner workings, opening up salaries, financial performance, and decision-making reasoning to the organisation as a whole. 80% of employees want to know more about how decisions are made in their organisation (1), and by increasing transparency, organisations can enjoy improved employee performance and overall organisational outcomes.
At Clarasys, a practical example of increasing transparency is that we make all of our financial information available to all employees, providing them with training and guidance on how to access and understand it. The availability of this information encourages employees to make the best, real-time decisions that they can, as well as to understand and contextualise the overall direction of the firm.
However, radical transparency is not a silver bullet and it must be rolled out with delicacy. Done well, transparency can be highly beneficial across a number of factors. Done badly, it can reduce innovation, reduce willingness to be open, and increase internal politics.
More progressive, modern businesses organise themselves around a “team of teams” model – a structure resembling a network of smaller organisations. These structures offer flexibility and unrivalled efficiency, whilst encouraging innovation and a sense of belonging. Research suggests that when organisations are structured around collaborative working, they experience a 50% reduction in employee turnover, a 50% increase in employee performance, and increased employee engagement (2).
The most progressive organisations, such as Haier, are structured around an ecosystem of mini-organisations where a small leadership team sets the strategic direction, and subsequently invests in mini-organisations across the business that will add the most value and achieve the desired outcomes. This generates healthy competition across the organisation, fosters innovation, creativity, and motivation, and builds accountability and ownership across the organisation.
However, organisations that want to benefit from more collaborative, team-based structures do not need to be this radical. Organisations that are simply more functionally structured can still benefit from increased collaboration. We assisted a Central Government client in reorganising a key technology portfolio. The shift involved moving away from a programmatic structure where individuals received and handled tasks within their small areas of responsibility across a suite of services in one large portfolio team. We introduced a team structure based on end-to-end delivery of specific services, bringing together the expertise of different technology professionals to form multidisciplinary teams that were each accountable for delivering a specific service for the overall organisation.
Through breaking the large portfolio down into specific teams each with end-to-end responsibility for different services, ownership, engagement, and ultimately speed of development significantly increased, in some teams by 260%.
In a team of teams model, teams must be empowered with decision-making authority. Too often, a centralised authority holds most of the decision-making power in an organisation. This builds frustration in the workforce and minimises an organisation’s ability to move quickly, respond to market pressures, and make decisions that truly align with business needs.
Teams perform better when they are empowered to apply their collective brainpower to problems and take action rather than having solutions dictated to them. By setting up the right supportive structures, organisations can decentralise and enhance decision-making across the business. In this climate, companies are more likely to develop new and disruptive products.
However, for decision-making to be truly decentralised, a culture of supportive leadership must be in place. Hierarchical, top-down, directive leadership styles remain highly prevalent, particularly in long-standing organisations – a style that works well in particular times of turbulence or in organisations where authority is key, such as the military. However, this directive leadership style demotivates, inhibits creativity and innovation, reduces job satisfaction, and increases employee disengagement.
For teams to have the clarity and autonomy they need to drive forward organisational outcomes, organisations need to move towards supportive leadership styles, where leaders focus on creating an employee environment that enhances the employee experience and where people want to perform and deliver. This does not mean moving to a model of chaos where all employees have completely free reign, but it does mean reducing bureaucratic governance and leadership structures designed to target the 3% of employees who may misuse new freedoms (3). We have helped our clients across retail, consumer goods, and public services move towards more supportive leadership and introduce guardrails that give employees additional freedoms whilst giving leaders the visibility and assurance they need.
It’s only when leaders are willing to take a step back that their employees, and the business as a whole, will really thrive.
If you need help to rid yourself of bottlenecks and bureaucracy, get in touch.