In this series of blogs, we’re discussing the changing nature of the workforce, and what this means for business leadership. One of the most significant trends we’ve identified is how the traditional organisational hierarchies of the past are being overturned by digital technology. In a world where the top-down chain-of-command is no longer applicable, how can leaders best manage their talent?
The new workforce
The traditional organisational principle behind enterprises is linear: a hierarchy where decisions are made at the top and executed at the bottom. This approach worked well because market change was slow, all a business needed to do was organise its workforce around the principles of consistency, repeatability and efficiency.
In our digital world, things couldn’t be more different. Opportunities and challenges rise and fall almost hourly and disruption has become a fact of life. Networks are therefore emerging as a more effective form of organisation. Networks are a “soft” structure of relationships, teams, groups and communities that cross functional boundaries to accomplish tasks and enable learning.
Networks are far better suited to the digital age as they allow organisations to connect dots rapidly and react to fast-changing customer markets. In an ultra-competitive environment, this could be the difference between success and failure.
The rise of the machines
The rise of networks is being expedited by emerging AI technologies. As smart machines take over routine aspects of work, what remains will be creative, judgment-oriented and social in nature – tasks which are best undertaken in collaborative networks.
We’ve seen this at first-hand. Our Operations business now includes some 4,000 pieces of automation (“mini-bots”) that we use in transaction processing activities. In the first year of running the mini-bots we reduced over 10,000 repetitive testing roles without making a single person redundant. Instead we reskilled them to take on higher-value roles in analytics and other emerging areas.
New leadership principles
What does this all mean for leadership? How does a manager manage in a network organisation? The first point to make is that the leader’s job becomes that of a facilitator. Networks are a framework of potential energy and expertise that can be used for a specific business goal. The leader must make network interactions possible to realise this potential. There are three ways in which leaders will be able to do that:
As networks become the dominant organisational structure of enterprises, new managerial principles will emerge. It will become more important for leaders and the workforce at large to contribute knowledge flexibly and to be ready to form impromptu teams and communities. Leaders will need to seek out employees’ own network connections and these employees will need to be willing to activate their networks as required. Finally, talent management will need to evolve to be based on real-time performance data; augmented with analytics that can screen for people who thrive in highly-networked organisations.
In a network enterprise, the more data managers can collect on their team members and their networks, the better they’ll be able to build efficient and effective teams.
The next article in the series looks at fragmentation of the workforce and what this means for leadership.
Read the full report on what digital transformation means for leadership: Leading the Digital Enterprise.