For the past 50 years, organisations have essentially been variations of a hierarchical model. This will change fundamentally this decade.
The future organisation will be all about people, in the context of factors like globalisation, the economy, technology and a growing individualistic society.
Four factors will impact future organisations. They are globalisation, the economy, technology and growing individualism.
Globalisation and economy
Globalisation is about the lowest cost structure, the cheapest money, the best talent and the best returns. Talent is getting scarce and going global at the same time.
Globalisation is also about the spread of consumer trends from one block to another. It is also the death of unions, since firms have the opportunity to source from countries that have favourable business terms and conditions, and to close operations that are not productive.
The second impact factor is the economy. Every country wants to create more jobs and, in some measure, this will lead to protectionism and also development of local based industry. A country will want the firm to be a good citizen and contribute significantly to the challenges and issues it faces. This will be led by company laws and also the growth of non-Governmental organisations (NGOs). Every firm must do more than law mandates in order to show its commitment to the country.
The Indian economy has moved from being a penetration economy to a consumption economy sometime in the last ten years. We will see consumption coupled with an experience economy this decade. The big impact for organisations will be the ‘soft skills’ of internal and outsourced employees in providing great experience.
The tech impact
Technology is the next impact factor. This year, 2013, will be special for two reasons. It is the year when we will see nearly a billion smartphones sold. And, it will also be the year when mobile Internet will overtake fixed line Internet. Both will have a significant impact on people, and also the way work will be done in organisations.
The Internet is about ‘public-ness’. Technology allows people flexibility in managing work and life. With technology, there is no dividing line between work time and personal time. Technology will aid, yet challenge the way meetings are conducted.
Technology breaks hierarchy and promotes openness by getting every employee’s view on the internal blogs, about strategy, about results, about culture. Management style and corporate culture will have to keep pace with technology advances this decade.
One group we will see a lot at the workplace is the millennials, people born between 1977 and 1997. I fondly call them “The Concorde generation’. The ad from British Airways for the Concorde said, “Arrive before you leave,” since that was possible with the Concorde between London and New York.
The Concorde generation is excellent with technology, so, they are adept at multitasking. The Concorde generation is also idealistic. They seek harmony in values and what’s right and wrong. When leaders disappoint them, they are disillusioned. They are loyal to their careers and not institutions. Their learning style is by doing — by trial and error. It is a privileged generation, since their parents have provided for the basic needs. Previous generations worked in companies for security and institution building. The Concorde generation change jobs to keep life interesting. And they thrive on praise and are sensitive to criticism. For this generation work is a verb, not a noun.
So, in a global world, impacted by globalisation, the economy, technology and growing individualism, how does one manage and what should a firm look for?
Keeping it together
There are six things an organisation should manage.
The first is diversity. At a basic level people look at diversity as the ratio of men and women. That is a start, but diversity is not just about gender balance. One of the challenges for organisations is to be innovative this decade.
Innovation happens at the intersection, the interaction of different functions and different backgrounds. An organisation must staff people from different backgrounds to be innovative; it must have people from the sciences, the liberal arts, design, and other fields, to be truly innovative. Diversity should also try and mirror the consumers and customers one serves in this decade.
During this decade we will see more than three different generations of employees at work. Every firm will need to manage the generational harmony through communication, collaboration and compromise.
We have managed career paths in a linear way since our definition of success has been narrow, rigid and vertical. As I scan the future firm, we will need different career paths for women. Career paths must provide space for women and excitement/interest for the Concorde generation.
Organisations are unable to meet the aspirations and needs of significant top talent. Hence, the responsibility of managing a career has shifted from the organisation to the individual.
One of the biggest challenges of this decade will be attrition. Attrition in India is running between 15 and 20 per cent, that means by 2020, 66 per cent of a firm will be new employees as opposed to today. So, who will provide the glue, the training around values? How will folklore and storytelling happen? This job will have to be done by senior management.
The next challenge is the behaviour of leaders. Every leader will be challenged to improve his leadership score and, thus, earn respect with the rank and file.
The future organisation will see a strong alignment between the core technical aspects of what the company is supposed to be good at and a strong culture. What kind of culture it will be is something the leaders and followers need to decide.
The future organisation will be built around teams. We will need to see talent in a team as opposed to talent in an individual. We will need to monitor the capability balance in the team. Teams will have to be autonomous and self-directed, self-deciding. That’s a far step from where we are today.
Every organisation says it is open and transparent. We will need to set a new benchmark in openness in this decade. I call this truth telling as opposed to whistle blowing. Truth telling will ensure that you will have more control and be more compliant. How do leaders encourage truth telling at all times?
The task for leaders is challenging.
The future leader will be one who is disciplined, humble and rich in social skills. Such a leader will move from the current three Es — Efficiency, Effectiveness and Exits — to a more democratic, harmonised workplace where the value will be unlocked through highly engaged colleagues who are more productive than competition. The future of leadership is in rich social skills, in being who you are — the warm leader.
(The writer is President, AIMA, and Sr. Vice President, Nokia for India, Middle East and Africa. This article has been adapted from a speech delivered at the NHRD CEO Conclave).