As the business environment has become more complex and interconnected in recent years, many companies have mirrored these changes in their organizational structures, creating an ever-more convoluted matrix. Unwittingly, they are betting on organizational complexity to solve market complexity.
This is a losing bet. Future-ready organizations, by contrast, structure themselves in ways that make them fitter, flatter, faster, and far better at unlocking considerable value. Their goal isn’t to eradicate hierarchy so much as make it less important as an organizing mechanism. They flatten the organization and adopt the simplest P&L structure possible, reinforcing business objectives with clear, strong performance management and other mechanisms.
[…]The vision of the future […] is one in which organizational structure no longer focuses on boxes and lines. Instead, it centers on connectivity—on who works on what with whom. Future-ready organizations require models that are designed, nurtured, and grown around people and activities.
Authors: Aaron De Smet, Chris Gagnon, Elizabeth Mygatt
Source: McKinsey Quarterly
Subjects: Management, Organizational Behavior
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