Ever since humans moved from wandering tribes to towns and villages with governments thousands of years ago, we’ve been organizing our communities and businesses the same way – as hierarchies.
But as the pace of change accelerates and the cost of transacting and coordinating declines, traditional forms of organizing are giving way to a new form that rejects the hierarchical approach in favor of smaller, self-sufficient teams, decisions made by group consensus, and data controlled by a collaborative network that eliminates the need for a central authority.
What will the future organization look like? The contours are already becoming clear.
Barriers surrender to future forms
In my new book, Driving Innovation from Within, I outline seven of the most common barriers to innovation, also known as IN-OVATE (Intent, Need, Options, Value blockers, Act, Team, Environment). These barriers stop innovation in its track, making it impossible for employees to push through their great ideas and for companies to become more innovative.
But forward-looking companies like Haier and Netflix are finding new ways to break down these barriers, revealing the exciting future forms of organization that will emerge, forms that liberate employees to innovate and impact the world.
Current barrier: When facing obstacles, would-be innovators abandon their original intent, eventually giving up looking for chances to innovate.
Future form: Organizations that survive in the future are going to give employees their intent back and turn them into internal innovators.
Current barrier: Because companies often have complicated strategic plans that they don’t make clear, employees don’t understand what kinds of innovation their organizations need, and so they look in the wrong places and then propose ideas of little strategic value.
Future form: We’re going to evolve from overly complex strategic plans into a simple statement of purpose that tells our employees what the company and the world need.
Current barrier: Would-be innovators often focus on too few innovative ideas – or worse, just one – rather than generating a constant flow of new ideas often stimulated by casual “water cooler” conversations with other innovators.
Future form: Since casual collaboration helps innovation thrive, we’re going to see innovative ideas coming not from boardrooms but from our hallways.
Current barrier: Innovative ideas are often inconsistent with – and therefore disruptive to – a company’s current business model. Therefore, the company will raise value blockers that inhibit a new business model from forming around a new idea.
Future form: Instead of just one established way of delivering value, we’re going to see organizations adopt an ecosystem of business models that give employees greater freedom to change the world.
Current barrier: Organizations tend to ask employees to prove an idea will work before giving them permission to take action, putting them in a fatal catch-22: they can’t take action, so they can’t prove their idea will work, so they can’t take action.
Future form: Companies will recognize that innovations require you to take action first in order to prove your idea will work.
Current barrier: Traditional organizational structures hamper innovation by using siloed hierarchies that move slowly.
Future form: We’re going to move toward agile teams that can move quickly and reconfigure at will.
Current barrier: Getting support for new ideas is difficult, if not impossible, because the environment that helps established organizations sustain their core operations also tends to hinder internal innovativeness.
Future form: We will see a new environment evolve, as our organizations shift toward more open platforms where employees can find opportunities and rally resources to change things. We’re going to see a seismic shift in organizations, from asking employees to operate within a confined job description to one that gives them an open structure that allows them to pursue and test ideas outside of their stated role.
Gary Hamel has been pointing toward this future for years, saying, “The outlines of the 21st-century management model are already clear. Decision-making will be more peer-based; the tools of creativity will be widely distributed in organizations. Ideas will compete on equal footing. Strategies will be built from the bottom up. Power will be a function of competence rather than of position.”
Will your organization adapt, or will it fall behind?
Kaihan Krippendorff is the author of Driving Innovation from Within: A Guide for Internal Entrepreneurs (Columbia University Press, 2019), and founder of the consulting firm, Outthinker. Outthinker boasts that the growth strategies and innovations it has created have energized countless organizations, teams, and individuals and generated over $2.5 billion in revenue for Fortune 500 companies. Kaihan was shortlisted for the 2019 Thinkers50 Innovation Award.