Can Hierarchical and Networked Organizational Structures Coexist?


A featured post by: Dr. Clark Quinn

The world is changing: we now have more information, faster access, and greater resources. And this change is accelerating.  What that means is that organizations need to become more agile. The optimal execution of known capabilities is now only the cost of entry, and the only sustainable differentiator is agility: the ability to continually adapt, innovate, and evolve.  Yet, are we ready for this?

Our existing organizational structure, the management hierarchy, isn’t able to cope. The notion that information from the field will percolate up, get processed, responses will be developed, and the organization will be prepared and then execute, is too slow. Organizations that have grown in the old manner are being outpaced by new initiatives.

New startups, with looser organizational structures, are able to come in, sense what’s happening, create responses, adapt them based upon feedback, and seize new markets. Often, those new markets are ones that older organizations recognized, but couldn’t adapt to.  How do existing organizations cope?

The Dual Organizational Structure

John Kotter, recognized for his model of organizational change, suggests that previous approaches were appropriate for the old environment, but that the different approaches are needed now.  Rather than try to remake the old organization completely, he advocates a new approach.

His suggestion is what he calls a ‘dual operating system’, with the traditional hierarchy complemented with a second, ‘network’, structure that taps into a committed subset of the organization.  Here, the networked group is drawn from the organization, so the links between the two are implicit in the target audience.

The role of this separate, networked, group is to address the ongoing strategic issues of the organization.  The claim is that these structures are not new, but instead have been implicit rather than explicit and the goal is to codify them.

While the necessity for a dual system may be open to debate, the proposal that organizations need some mechanism to move beyond the approaches that characterized the last century is valid. The landscape is different in that we’ve moved from an industrial to an information age.  The most valuable assets in the organization have moved from tangible ones of resources and tools to intangible elements of knowledge and processes.  And the speed of competition has moved from months or years to develop competitive approaches to days or weeks.

The Need for Adaptive Organizations

At core, this proposal addresses the need for organizations to become adaptive. Research has reliably indicated that the best outcomes come from tapping into the power of people: the room is smarter than the smartest person in the room. Collaboration has been demonstrated to be the fount of innovation, and our awareness of what leads to the best outcomes has evolved.  Yet our application of those realizations has not kept pace. We need to figure out how to adapt.

What we’re talking about is applying the science of creativity, design, innovation, problem-solving, and more, to the design of the organization. What is needed is to infuse the insights of research on cognition and learning into our structures and processes.  And while these approaches naturally are embodied in small startups, finding a way to leverage them in large organizations is almost inimical to what makes these entities succeed.

What’s important here is twofold. One is that what needs to happen needs to be clear. Second, the role of Learning & Development (L&D) in this move needs to be identified. The necessary realization is that when one is researching a new opportunity, designing a new solution, trouble-shooting a new problem, and so on, the answer is not known when you begin.  By that definition, such situations are ‘learning’.  And as such, having the learning function involved is not just sensible, it’s strategic.

L&D and the Dual Organizational Structure

At core, L&D has been about supporting optimal execution. Courses are fit for purpose to develop new abilities that have been identified as crucial for organizational success.  Yes, courses are only one tool in the quiver, and L&D could (and should) be looking at performance support and other techniques as well. Historically, L&D’s role has made sense.  But what makes sense in this new model?

It has been empirically demonstrated that the ability of individuals to work and learn together should not be taken for granted. The sad fact is that schools (K12 and university) are not adequately preparing learners for the workplace.  They’re focusing on specific outcomes, not developing the ability to collaborate and continually learn. Yet those skills, the ability to work well together to achieve important outcomes, are critical to adapting in this new environment.

This gap between what individuals and organizations need to succeed, and their current abilities, is a unique and valuable opportunity for L&D. Who better understands (or should) how people learn together?  There are robust results about what works and what doesn’t in these new areas – details about successful meetings, project teams, and brainstorming – that should be the responsibility for L&D to develop. While the performance ecosystem of learning management systems, performance support portals, and social networks provide a platform for effective processes, the ability to develop and leverage practices and processes on top of this infrastructure has proven to be difficult to capture.

L&D has the opportunity to own this area. The need is real, and solutions are emerging regardless of the efforts of L&D. However, without understanding and guidance, these efforts are unlikely to achieve more than idiosyncratic success. Proactive approaches are needed, and the abilities of groups like IT and operations are likely to be well intentioned but unenlightened.

Strategic Gains of the Dual Organizational Structure

The important thing to understand here is that there is an increasing need for organizations to become agile.  The elements that lead to such agility are, despite being increasingly understood, still elusive to develop and implement. The opportunity is for L&D to take ownership of this second area, and contribute to the most strategic area for organizational success.

Traditionally, L&D has not been an effective contributor to organizational success.  Even when well-done (which is unfortunately rare), courses are only one part of the possible solutions to optimal execution.  There has been, and continues to exist, an opportunity to improve this area of L&D responsibility and contribution. And that’s certainly necessary and desirable, but it’s not complete.

The new opportunity is for L&D to also contribute to the new area of organizational necessity.  It is, in fact, plausible to hypothesize that the areas of execution, to the extent that they can be well-defined (such that courses can be developed, for instance), will be automated.  The emerging area for organizational contribution will be on the other side of the organization, the networked innovation model.

L&D can shift from being a nice-to-have to the area arguably most critical to ongoing success.  This is an opportunity that I would suggest is too big, too worthwhile, to ignore.  The time to move is now, before less optimal solutions emerge.  The door is open, are you going to step through?