– Has the traditional organisation come to the end of its shelf-life?
The Organisation is perhaps the greatest invention of our time. The phenomenon of individuals, teams and communities coming together and organising themselves to produce things of value has arguably done more to advance our quality of life than any other invention.
It is almost impossible to find any human activity or artefact that is not made possible or vastly improved by this concept of organisation. Take a simple activity such as making a slice of toast. The bread you use is the result of farmers, millers, bakers, stores and a multitude of other organisations each contributing in a small way to get that loaf to your table. The same principle applies for the toaster you use, the spread on your toast, the electricity you need, and the list goes on. It’s a broad set of organised and integrated components that all work together in vast supply chains that allow you to enjoy tasty, fresh and well-toasted bread in the morning. It’s fair to assume that thousands of people and hundreds of organisations have in some way contributed to you being able to enjoy that everyday moment.
Still, despite organisations being a marvel of our time, they are not the happy, robust and resilient places we would want them to be. Consider the implications of the following five data points:
1. Organisational life expectancy: -80%
The average lifespan of organisations listed on S&P500 today is 18 years, compared to 90 years in 1935 and they are almost four times more likely to perish than was the case in 1965 (Martin Reeves, 2018).
2. The collective trust crisis
Globally only about 5 in 10 people trust organisations to do the right thing (Edelman Trust Barometer, 2018).
3. Crippling inefficiencies
Organisations, on average, still operate very inefficiently and lose value as a result of poor execution. Marakon Associates believe that organisations only realise 60% of the value of their strategy because of poor execution and breakdowns in planning. (Mankins & Steele, 2005).
4. Dysfunctional teams and the great divide
The basic idea behind organisations is that people with different skills and strengths collaborate to turn raw materials and resources into something with value. Remarkably then, it appears as if about 75% of cross-functional teams are deeply dysfunctional (Tabrizi, 2015).
5. The disengagement conundrum
Recent research published by Aon shows 35% of employees globally are disengaged, it is clear that we are still a long way from organisations that are purposeful, happy, engaging places for all or most of its employees.
Even though most organisations are falling short of their potential of being sustainable, high-performing, engaging, and thriving entities, we increasingly see the rise of organisations that successfully challenge the old paradigms of organisational structures and mindsets. Companies that are remarkably resilient, prosperous, trusted in the communities they operate in, and that do execute their strategies effectively. Organisations that have found new and innovative ways to collaborate and provide highly engaging experiences for all their employees.
These companies are showing us that there’s a better way which is a topic we are going to explore in much more depth in a series of future articles.
Stay tuned!
