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People entering the workforce today want to do things differently, and it’s critical that we, as multi-generational employers, figure out how to support them all quickly. The newer generations want more autonomy, and the reality is that entrepreneurial people exist at every level of every business. Yet traditional bureaucracies hold them back until they gain an influential position.
When structuring an organization – either starting another company or entering into a startup and structuring from scratch – you have more options than the traditional top-down structure. In our experience, there are better ways of organizing that bring out the full potential of each individual and drive business growth. But fair warning: this model is more than just sliding seats – it’s a total redesign of the bus.
Related: How an Adhocracy Drives Entrepreneurial Growth
Adhocracy as we see it
Unlike a traditional bureaucratic business model, adhocracy is a flexible and adaptable organizational structure where groups are formed when needed for a particular purpose. The ad hoc, problem-solving work groups of the adhocracy create a business environment that is more conducive to innovation.
In our ‘adhocracy’, non-hierarchical business units run independently with their customer portfolio, but they are ultimately part of our organization. Within each business unit, there are specific leadership roles: Our “executive squads” — an operations person, a finance person, a technical person and a business development person. Not unlike a C-suite, each brings its expertise to be part of a collaborative leadership team to support a business unit. And we mean support – this isn’t an old-fashioned top-down structure.
Our business units, named after constellations, are all supported by one platform: “Hubble” – the brain of the ecosystem. If I wanted to bring a technical team to a business unit team, we could use Hubble to identify the right people, their location, time zone and rates. We can also use it to seek out specific expertise for a new project or to transfer someone to a team that needs it.
Related: 5 Tips to Consider When Designing (or Redesigning) Your Organizational Structure
Stimulate agency and entrepreneurship
The adhocracy model emphasizes leadership – encouraging more people at different levels across the company. The ability to tear things down and put them back together makes for organizational fluidity. Teams can identify issues to quickly resolve and take action, achieving greater and greater efficiency.
Each business unit has the autonomy to design what they run and how they want to run it. They control their growth to meet the project needs, which benefits the greater growth of the company. They see how their efforts can positively impact the business, leading to more ownership, camaraderie, and ultimately less revenue. It also ensures healthy competition: who is getting bigger or better at pursuing our goals? When more people feel empowered to try to make a difference, more people will take the opportunity and try.
Related: Establishing the Structure for Organizational Growth
Follow our advice
This model empowers everyone to rise, be leaders and drive the growth of their unit and the company. People can broaden their experience within one company, making them more likely to stay than to look elsewhere for other opportunities. The products we build for our customers make them better and make us better. We don’t stop anyone.
But this is not a model for an organization that wants to stand still; you must have the following recipe for it to work.
1) Fancy radical change
To drive the company-wide mindset shift needed to make this model successful, a strong group of C-suite-level believers is needed to effect a radical shift from a typical organizational structure. It cannot be achieved by teams alone. At our company, we have moved from being an organization that passes guidelines to allowing individual business units to operate in the service of their customers. In fact, we encourage our clients to make this transition in a restructuring because we see how it can benefit them, but they realize it requires a radical change.
2) Find the right people and rethink their roles.
Find back office people from within the organization who are capable of this mindset shift and position them to enable these teams. Our executive squads make things happen in our company, so the rest of us support what they need. My role in HR shifted to being more proactive and involved with these leadership teams as strategic growth partners. Look for people with the natural ability to think like a leader, solve complex problems and seek opportunities to learn.
3) Stay flexible.
Changes happen often: mergers, mergers, shifts, expanding portfolios and exploring new industries. Teams can grow to the size they need to handle any project. We have split business units. We have allowed business units to join. We gave birth to business units with baby business units. We embrace fluidity – if it makes sense for the executive team, we’re all for it.
4) Beware of the threat of silos
These business units can grow large at some point, making silos more difficult to avoid. A business in silos breaks the smooth communication between them that is necessary to support a healthy adhocracy model, so we have to be careful not to let them arise. If you follow the Dunbar Theory, then 300 is a critical number. As you go bigger, it becomes inevitable to get more silos. Consider these numbers to limit size for individual groups, but leave them the flexibility to form and grow alliances.
At my company, we devour new books on great business theory, absorb it, and get to work on what’s most likely to work for us. It ensures that we continue to develop. If there was a better, more proven way of structuring, we would take a critical look at it and see if it’s worth it. In most cases, change will happen anyway, so we might as well anticipate it. For now, this model puts us in the best position to do just that.
Related: Breaking Down Silos, Building Cross-Communication