Management practice has evolved tremendously over the last century. Since Frederick Taylor’s scientific management approach at the end of the 19th century, there has been a progression towards an increased focus on the human aspect of management. Bureaucracies are becoming less common and firms are opting for more decentralized organizational structures. However, decentralization is not a new phenomenon. In fact, some of the greatest military leaders throughout history have used a flat structure and segmented their forces into independent units. This organizational structure allowed the leader to adapt to changing circumstances on the battlefield more quickly and provided increased flexibility. Similarly, organizations in the 21st century need to adapt more quickly in today’s globalized economy.
There are two military leaders that stand out in history: Napoleon Bonaparte and Genghis Khan. Both men were extremely successful in military battle and regarded as military geniuses. However, it was not some esoteric knowledge that led these men to victory. The key to their success was the organizational structure of their armies. Both Napoleon and Genghis Khan broke down their armies into small independent units. The generals of these units were given missions, and they had the autonomy to make decisions on the battlefield. An organizational structure like this allowed the troops to move faster and adapt quicker than the enemy. The structure allowed the two men to deploy their forces, and gave them the ability to rapidly concentrate them on crucial areas of the battlefield. In today’s world, the pace of change is increasing, which forces businesses to remain innovative and to adapt to change effectively. A hierarchical, centralized structure is too rigid to be able to keep up with the rate of change. Microsoft is a company that has this rigid structure, which has hindered its ability to effectively take advantage of opportunities and compete in new market segments.
The future of management practice lies in rediscovering the methods applied by military greats like Napoleon and Genghis Khan. It starts with the organizational structure, which needs to allow for flexibility and streamlined communication. Flattening the chain of command and giving managers more autonomy within a set of guidelines will help in achieving this. How does communication allow growth? In order to grow, businesses must identify strategic opportunities, assess, and act on them for these ideas to gain momentum, all of which needs to be communicated up and down the line. A flat structure with fast-moving divisions allows for this process to occur more rapidly, which in turn leads to faster growth. Another critical advantage of a structure like this also allows for threats and changes to be communicated efficiently, which improves a company’s ability to adapt to change.
In order to implement a Napoleon-like structure, communication flow becomes very important and companies are going to need to find ways to communicate and share information effectively. Flattening and decentralizing the structure will aid in achieving this, but regardless, proper communication channels must be established.
We are in the middle of a transition in the demographic makeup of the work force. Baby boomers are retiring, and are being replaced Generation Y. This is a trend that will have a significant impact on workplace dynamics and on will require managers to tailor their approach to better suit this new generation. Remember organizational structure won’t work effectively, if it does not fit your people. Your goal is to take advantage of your people’s strengths.
People in this generation seek more variety in their jobs and plan on working in various fields throughout their careers. Providing Generation Y employees with more autonomy and variety will motivate them and entice them to excel. Establishing independent work teams is one way to give this generation the variety they are looking for.
A company that embodies the aforementioned principles of management is Google. Google is very agile in responding to threats, opportunities, and implementing new ideas. Their engineers have a high level of autonomy and are asked to dedicate a certain amount of time to work on their own projects. The company is broken down into small units, which can be self-managed. It is this agility and swiftness that has been the key to Google’s rapid growth and sustained success.
The speed at which Google can maneuver allows it to identify the latest trends and establish a presence. Rather than focusing on dominating one business or one market, Google has the flexibility to attack different markets and segments, as well as respond to the latest trends. Let me give you an example: The company recognized the rapid growth of mobile applications and the opportunity they present. In response to this, Google purchased AdMob, a company that provides advertising on applications, which established Google as a major player in the mobile app advertising market.
This type of agility can also be achieved in traditional manufacturing environments, as was demonstrated by Zara and Crocs. Crocs, for example, was able to develop a strategy and organize its production processes in a way that enabled the company to ship products more frequently, which went against the traditional practice of shipping bulk seasonal orders in advanced, and allowed the company to take full advantages of surges in demand by providing additional products. Rapid information flow, frequency rather than economies of scale have played a great role in their success. Zara on the other hand has a remarkable supply chain that keeps up and is ahead of the trends in fashion. It is not luck, but a very well organized structure.
In today’s business environment, most companies are structured to fight a traditional war, but they must be prepared to deal with fluid Blitzkrieg type warfare. A well-trained, motivated workforce in a decentralized organizational structure would better prepare companies to face the challenges of the 21st century. The first step companies can take to achieve this is to analyze the organizational structure, just as Napoleon had done when he took over the French army. Analyzing the very structure of the organization will allow leaders to pinpoint the areas hindering the company from being more agile and adaptable. In many cases the advantages of creating an organizational structure that fit people of the organization will create a strong enough momentum to increase efficiencies in your business and achieve greater success.
In the future, market gaps will be filled faster and barriers to entry will decrease in most industries. Following the advice in this article will give your company the mechanisms to succeed in the long run.