How Will Organization Design be Impacted by COVID-19?
In the face of huge upheavals with the COVID-19 pandemic, companies have few reference points on which to base decisions about how their organizations need to adapt to changing circumstances. Clients have asked me for my thoughts on how to frame their thinking. It’s early days so, as Winston Churchill said, “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
Organization design is too often seen as a narrow set of considerations about roles and reporting relationships. This is way too reductive. The design of an organization should consider all the elements that affect how it functions. Particularly now, when so much outcome uncertainty exists, attention needs to be given to culture, metrics, and development opportunities to drive appropriate behavior change in people. From my conversations with clients and a variety of other sources, here are some early thoughts as we learn to respond to the implications of COVID-19 for how companies operate.
1. Don’t wait. Do. As Nike would say, Just Do It. Act now for the future and make adaptability an organizational norm
2. Loose-tight structures are about to get looser. Redesign processes for remote working, design roles and build systems that allow for individual and team latitude to support a culture of innovation. Ensure boundaries and outcome expectations are clear. Reset your talent model to match the new demands of versatility, effective collaboration and networking.
3. Leading virtually demands a higher bar. Redefine the role of leader to take account of capabilities and the personality type that will map to the demands of virtual and office-based environments. Rethink communications channels to double down on information flow to keep remote workers engaged and feeling relevant.
4. Metrics for the WFH world. Rethink KPIs and metrics in the context of how best to focus and evaluate work in a remote world.
5. Office walls, real and imagined, make a come-back. Rethink office layout, staggered hours, and safety protocols to enable office life and remote working to co-exist.
6. It’s the technology, stupid! Accelerate and map your long-term transition to remote working at a pace that matches your implementation of remote working tools. Insist that leaders utilize these tools to establish new norms.
7. Trust us! Rethink your role in society and the employer/ employee relationship. Open the doors to new thinking about why, how, when and where work gets done.
#1 Don’t wait. Do.
The planning horizon is getting shorter. I’m not suggesting that business strategy is irrelevant and clearly every company needs some basis for determining its markets, products and services, but we have already gone from 5-year planning as the norm, to 3 and even 1 year. However, right now, the cycles need to be in weeks. Why? Because the window of predictability is incredibly short, and we need to be learning fast about what works and doesn’t work in the new organizational environment. Add to that, the fallibility of strategy experts is becoming increasingly apparent. In an excellent article in the NY Times, Mark Lilla points out our misplaced belief in oracles and forecasters down through the ages, as we look for certainty where it does not exist. As a result, he says, “We should ask only what we want to happen, and how to make it happen, given the constraints of the moment.”
The world of work has changed forever, so you are likely already behind the curve of what is needed. Companies are increasingly communicating changes one week, then the next changing again – sometimes back-tracking, sometimes moving forward, but always in the hyper-responsive mode that has to be the new norm. There is nothing to be gained by organizing a return to work and then expecting to be able to initiate another round of changes 6 months later. That would only serve to deepen and prolong the anxiety, uncertainty and distrust that already exists.
As Nike would say, Just Do It. Act now for the future and make adaptability an organizational norm.
#2 Loose-tight structures are about to get looser
My longer-in-the-teeth readers will remember the business book of the 80’s, In Search of Excellence. Like most books that proclaim lessons learned from the great companies, the companies themselves may no longer be exemplars, but that doesn’t necessarily negate the ideas they inspired. In their final chapter, Peters and Waterman wrote of the need for “Simultaneous Loose-Tight Properties”, meaning “..in essence the co-existence of firm central direction and maximum individual autonomy”. They focused on a culture that is disciplined, but also gives “plenty of rope.” Clear rules of the game and the latitude, deep into the organization, to try new things, coupled with breaker switches (i.e. good reporting systems) for backing out of or changing things that don’t work, are needed now more than ever because the shape of new working arrangements are going to have to evolve quickly, despite not necessarily having a clear path at this stage.
At the same time, work processes will need reviewing to determine when virtual or remote work is best suited and which activities need to be office based.
All of this may point to a huge shift in the qualities required of employees: greater self-sufficiency, higher levels of adaptability, stronger communication skills, and a collaboration mindset at their core. The days of the SME may be diminishing as we see the rise of the talented generalist once again.
Redesign processes for remote working, design roles and build systems that allow for individual and team latitude to support a culture of innovation. Ensure boundaries and outcome expectations are clear. Reset your talent model to match the new demands of versatility, effective collaboration and networking.
#3 Leading virtually demands a higher bar
There won’t be many, if any, working environments that will revert to how they operated pre-COVID. The newly expanded experiences of virtual working have accelerated the learning curve, investments in technologies and processes, and development of new habits by employees. Previously accepted norms have been shown to be myths. Now we have seen leaders in their casual clothes, with kids and dogs interrupting Zoom calls, the old symbols of power, like the executive suite, have quickly become historic anachronisms. The “personal and work worlds have smashed together” as one corporate VP exclaimed to me recently. Unable to rely on past power structures, some leaders will have a tough job adjusting. They are asking questions like: How do I lead a virtual community? Where should I focus and allocate my time and attention? How do I exercise appropriate control and oversight? What is my role as a leader in this new environment?
The sudden increase in the volume of remote working will require a change of approach for sure. Laptop video communications are the great equalizer, driving a need for more personal interactions. Perhaps we should always have expected the quality of skills that are now required – but now failures of leadership will be glaringly obvious as looser structures and hierarchies make followership less of a given. The bar will now be much higher. A recent article by my old firm, McKinsey & Co., reflects on the need for responsive support and enhanced communications. Both are important, but even more so is the need for candor and “distill[ing] meaning from chaos”. Communications need resetting to prioritize and be transparent on issues that are now higher up employees’ priority list, like job security (always there, but more so now), healthcare plans, receiving information earlier on company performance, a safe working environment, the ability to speak up about work environment or health issues without fearing the loss of jobs. For employees, candor and an increased quality and flow in communications will ultimately be the credibility litmus tests and the basis for ensuring an engaged and healthy relationship with their employers.
Thus, in these uncertain times, for many employees’ trust is, at the very least, open to question. There is a huge need for leaders to rebuild and strengthen that trust, and with trust comes security, with security comes motivation, with motivation comes performance.
An HBR article a few years back reported on some studies that spoke to a conundrum: working remotely has the potential for increased productivity, yet simultaneously people have a preference for face-to-face communication. It concluded that success depended on four factors: the right team, the right leadership, the right touchpoints and the right technology. In other words, good leadership without the other factors results in an uphill struggle, but with the other factors in place, but the wrong leadership you will still be left wanting. It’s a package deal.
Redefine the role of leader to take account of capabilities and the personality type that will map to the demands of virtual and office-based environments. Rethink communications channels to double down on information flow to keep remote workers engaged and feeling relevant.
#4 Metrics for the WFH world
Despite a huge and time consuming industry in applying the use of ever more precise metrics for the annual evaluation rounds, so much of the assessment of the value of an employee’s contribution remains qualitative: face time in the office, contributions to the office culture, how they are viewed by peers, how hard they tried to make that project work (even if it ultimately failed). But in the remote, WFH, world, those factors are going to be harder to see and put a value on. Inputs will be less relevant than what happens as a result of effort. A rethink is needed, basing KPIs on a new balance of Activities (what was done), Outputs (what was produced) and Outcomes (what happened) as part of the way we orientate and assess the virtual worker.
Rethink KPIs and metrics in the context of how best to focus and evaluate work in a remote world.
#5 Office walls, real and imagined, make a come-back
A recent survey conducted by Amol Sarva, my friend and the co-founder of the office company Knotel, showed that people do not want a binary choice between WFH or office. In other words, expectations of being able to work flexibly have risen. People see the simultaneous benefits of virtual working coupled with the importance of office time and the connectivity that comes with it. However, the desire to return to the office is tempered by the expectation that occupancy will be managed to enable distancing (not least at the elevator bank!) and that increased hygiene procedures will be established to ensure a safe environment. Offices will increasingly be seen as one alternative out of many choices for where to work.
Also, as the WSJ reported, we will see a return to configurations that bring back office walls and workstation dividers, in place of the open plan environments that have become the standard. Office space needs to be redesigned to allow flexibility in matching the needs of different types of work activities – whether they be fixed, intermittent, individually based or collaborative. A whole new market in workplace design has arisen, including collecting data on employee movements in the office to enable tracking contacts in case of a virus outbreak. However, it will only take one malign company to misuse that data to question its collection, so there are legitimate privacy concerns that will need to be addressed.
Some companies (in particular, many smaller companies in Silicon Valley) are already going the whole hog to operate on a completely virtual basis. The payments startup Stripe has recently announced that it is opening a new engineering hub, that will be completely virtual. Google and Twitter have announced they will allow employees to make choices about when and if they want to return to the office environment. American Express is operating a phased approach while also rethinking what it means to be in the office of the future. Everyone is trying to figure out the safest and most productive way to operate in future. But any long-term solution will need to establish mechanisms that bring people together in some way – or the whole concept of being part of an “organization” will be the next domino to fall. Brainstorming, social events, and a sense of belonging do not really cut it in the virtual world once the novelty has worn off, unless alternatives are put in place. A managed version of office life that ensures no overloading on particular days but still meets the desire for analog face time, seems to strike a more viable long-term balance.
Rethink office layout, staggered hours, and safety protocols to enable office life and remote working to co-exist.
#6 It’s the technology, stupid!
To repurpose the famous James Carville quote, whatever approach you take, it is very dependent on technology. Whether remote WFH or office, there is no doubt that the era is upon us of video conferencing (Zoom is suddenly a common verb, like Google!), virtual learning, and team communication platforms like Slack, MS Teams, Yammer and FB Workplace. There is no doubt that technology is central to enabling an effective WFH or office strategy. New norms are needed to ensure appropriate use but, as Stewart Butterfield, CEO of Slack recently said, it should get easier as, over time, the norms will evolve as the proportion of people who don’t actually get to the office much, if ever, increases. Norms for how meetings are managed, levels of investment in communications (internally and across partner companies) and trying new things in the “fail-fast” mindset are all part of the new world we work in.
Accelerate and map your long-term transition to remote working at a pace that matches your implementation of remote working tools. Insist that leaders utilize these tools to establish new norms.
#7 Trust us!
In the face of all this change, instead of battening down the hatches in denial, it is encouraging to see some companies begin to rethink their role in society and the purpose of their existence. Long held assumptions are being challenged, sometimes by employees as we see at Google and Facebook, and sometimes by think tanks such as the Future of the Corporation research program being run by the British Academy.
After decades of At-Will employment contracts and ups and downs in the employment market, we are now confronted by massive layoffs, either absolute or furloughing, so it is no surprise that cradle-to-grave notions of loyalty to companies are long past their sell-by date. Even back in 2016 a survey by E&Y reported that less than half of employees had “a great deal of trust” in their employers or bosses. This can hardly be any better now with around 13% of the US workforce currently out of work due to the pandemic crisis.
I see an enormous opportunity to establish a whole new basis for the relationship between employee and employer. Remote and virtual working open up vast flexibility in the choices that can be made about how, when and to what extent work gets done. And the question of where it gets done becomes infinitely more open – as a virtual worker, you can live anywhere and exercise greater control over your sense of well-being and work-life balance.
Rethink your role in society and the employer/ employee relationship. Open the doors to new thinking about why, how, when and where work gets done
As you plan your response to the changes arising from the COVID-19 pandemic, taking account of these considerations will go a long way to coming out of this period of uncertainty stronger and reducing risk of a long, negative, tail. If you need help, let’s chat. Redwood Advisory Partners has decades of experience supporting clients through the design and implementation of organizational transformations.
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