The modern organization is structurally and culturally very different from the prototypical hierarchies. The viewpoint of the business as an ecosystem is emerging, and something that top managers and the board of directors need to investigate and experiment with. The challenge of today’s business is to stay relevant, frequently enough.

We met at a network meeting for CEOs and directors that I was facilitating. He was amongst the first to show up that spring morning, and we took the opportunity to share some reflections before the crowd showed up. After the normal pleasantries, he paused and lowered his voice a bit.

“What really bugs me,” he said, “is the fact that we are not all designed to adapt, embrace or even exploit the massive changes. Our planning horizon has shrunk from three years to three months. Our talented people are slowly leaving. And we’re not learning fast enough as an organization.”

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He shared a story that I have heard often in the past. Developments in technology and society are changing how organizations should behave and act in a market, with new rules and players. Deloitte has several times described this in its annual “Global Human Capital Trends” reports, and the 2017, 2018 and 2019 editions provide a great introduction to the challenge.

Things change fast. Organizations need to learn and adapt fast. Clearly, this requires new approaches to strategy, innovation, culture, leadership — and to organizational design.

Luckily, these five areas are interconnected. When you initiate development in one of the areas, the four others are affected too. This means that you can lift all areas at the same time if you engage in an ingenious way by redesigning your organization from hierarchy to a platform with local, diverse structures.

Four Observations

Over the past years, I have observed four things that are characteristics of modern organizations, that are able to adapt and stay relevant to the employees and to the market.

One is that getting extraordinary things done in the modern corporate world happens in small teams only, not in large operational structures. Success is not an attribute of corporate collaboration but of small, self-managed, self-propelled teams in a team-of-teams structure in a universe of minimal corporate support.

Second, work happens in highly connected networks of leaders, subject matter experts, internal influencers and corporate team players with high emotional intelligence. The old way of designing the hierarchical organization is counterproductive and alienating to progressive leaders and employees, and not fitting for a business world that calls for change, adaptation, cross-organizational collaboration and distributed decision-making.

Third, tactical execution happens when touchpoints are frequent and physical, and when the rhythm of the business unit or department is synchronous across the team of teams. This new way of working consists of more frequent touchpoints, with shorter durations and new purposes for meeting.

Finally, the reorganization as an activity is a pivot point for transformational leadership. When it is done well, the reorganization is a melting pot and opportunity for activating and aligning your leadership and culture beyond theory and training — and across the organization.

These four observations are seen in the finance, IT, engineering, fast-moving consumer goods and professional services industries, and in both scale-up and corporate worlds. And these four observations can be seen as design principles for the modern organization: encourage small, self-managed delivery teams instead of clinging to the idea of massive corporate collaboration; avoid the hierarchies and focus on the network instead; be sure to meet often, also on tactical level, to align activities, share learning, and avoid counter-productive decisions; and regroup as often as needed.

New Leadership Role and Mindset

This approach has clear benefits: adaptability to new technology and new market conditions, staying attractive to employees, lower sickness and higher retention rates. And, most significantly, learning and experimentation becomes a built-in skill and cultural trait for the teams and the organization.

However, this approach dramatically changes the role of leaders. You are no longer the top of the pyramid or the one who calls all the shots. Instead, you are the gardener of the ecosystem. You might be trained in leading products. You have honed your skills of leading people. However, leading ecosystems is not something you have learned during your MBA or in your years as top manager.

Times are changing, and new roles and behaviors are needed to lead an ecosystem of self-managed delivery teams, networks, distributed leadership and a culture of learning.

You must be a coach and mentor. You must facilitate flow of information and learning, not just resources and business goals. You must facilitate cross-pollination of skills and approaches to ensure better problem-solving. And you must codify and nurture the elements of the ecosystem.

A Paradigm Shift in Leadership

Six months later, I met the same CEO, at the same kind of network meeting. Again, I had the opportunity to chat with him — and things had changed.

“This is hard,” he said, “but we’re really trying to shake things up and redesign our organization. The biggest challenge is my personal bandwidth: Designing what I should spend my time on, to the benefit of the organization. But rethinking my role as leader to focus on the ecosystem was pivotal. I take care of the mechanisms, and the teams take care of the business.” He looked relieved.

Many sources and thinkers describe new traits of leadership for the future. More purpose, less profit. More network, less hierarchy. More transparency, less hiding. More experimentation, less planning. More humanity, less cold-hearted capitalism.

This is hard. To me, the best and most efficient approach is to focus on your organizational design, hand in hand with a mindset change. This is where your mind and your practices evolve in unison, step by step. This is a paradigm shift.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.