When I first began studying business in high school, organization structure options typically included versions of bureaucratic, matrix, functional or divisional structures. However, in recent years an increasingly unpredictable, constantly changing business environment has resulted in the need for more flexible organizations. Originally created in the late 1960’s by W.L. Gore Associates, the lattice (hierarchy free) organization structure is becoming more prevalent today.
The lattice organization structure is characterized by self-management as this structure has no hierarchy and no defined leadership. Gore describes the lattice organization structure as one that involves:
‘Direct transactions, self-commitment, natural leadership, and lacks assigned or assumed authority.’
The lattice organization structure has been successful at Deloitte and could be considered to be suited to organizations similar to the ones I featured in my past posts on self-management and results-only work environments such as Morning Star and Best Buy’s corporate headquarters.
Here are the pros and cons of the lattice organization structure:
- A lattice organization structure can facilitate the creation of an ideocracy where anyone in the organization can contribute ideas regardless of position and how long they’ve been with the company. The benefit of this is that the best ideas can prevail and organizations can benefit from ideas they may not have heard in more hierarchical organizations where lower level employees often have a more limited voice.
- Employees have greater freedom to cross train and learn different aspects of the business and expand their knowledge, skills and expertise by not being restricted to one specific functional area.
- A lattice organization structure can also enhance employee retention as employees are empowered by having an almost unlimited amount of learning and development opportunities.
- Organizations utilizing this flat organizational structure can achieve competitive advantage from increased flexibility to adapt faster to the changing environment.
- Not all employees have the ability and self-discipline to thrive without management, creating the potential for a chaotic work environment. The flexibility of the lattice organization structure enables employees to shape their careers by working in different teams making roles hard to define. As a result the creation of policies, compensation and performance standards is challenging.
- Lattice organization structures have been most successful in new organizations. To transform from a hierarchical to a lattice organization structure is plagued by implementation challenges. As a result, organizations looking to become more flexible should look to incrementally change their structure, taking on some aspects such as self-managed teams; avoiding radical change.
Would a lattice organization structure work in your organization? Share your thoughts in the comments section below.
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CrowdSourcing is a collaborative open call approach to problem solving and idea creation. One such example is Google’s Project Glass, which involved the company sharing an idea for future technology and requesting feedback from the public to create consumer driven products. Recently I read a research paper from McKinsey Quarterly by Arne Gast and Michele Zanini on the idea of crowdsourcing corporate strategy, which I will discuss in this blog post.
Why consider this approach?
So often an organization’s strategy suffers from a lack of diverse perspectives and lack of leader understanding of the operational challenges their employees face. As a result strategies are often created that sound great in the boardroom but have the opposite impact in practice. Leaders that fail to consider the implications of their strategic decisions on front line employees, may experience implementation challenges from employees who do not support the organization’s strategic vision.
Benefits of this approach
By incorporating perspectives from front line employees, strategies are less likely to be flawed relative to those created in isolation. Crowdsourced strategies have the potential to be more insightful and actionable. Employees are likely to become more engaged as they learn that their opinions are encouraged and can make a difference. As a result of greater employee involvement, implementation is easier and employees are more likely to support the company’s strategic direction.
CrowdSourcing strategy in practice
Companies that have adopted this approach range from the obvious: Wikimedia to companies that were not founded on collaborative content creation such as 3M, HCL Technologies and Rite-Solutions. HCL Technologies rethought their business-planning process to create greater transparency and to generate more diverse feedback and insights on their business plans. In 2009 the company launched an online platform called My Blueprint and invited more than 8,000 employees to view 300 posted business plans. Interested individuals gave detailed, actionable feedback on the plans and quality insights were obtained. By including others in the process, opportunities for cross-unit collaboration were more easily identified. Overall crowdsourcing enabled the company to gain fresh perspectives to greater analyze their business plans and focus on specific actions to take to achieve desired results.
While the concept of crowdsourcing strategy is a very new idea, this concept has great potential to improve decision-making, avoid group think, eliminate ideas that would not work well in practice and to create visions that are more meaningful to lower level employees. What do you think? Would your organization be open to crowdsourcing their strategy? Share your thoughts in the comments section below.
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E-commerce company Airbnb, began in 2008 in San Francisco as a house-sharing website, helping people to find a place to sleep for the night when local hotels were sold out. Today Airbnb has over 100,000 listings in 192 countries and has expanded to incorporate other rentals such as parking, storage, bikes, cars etc.
The video below sums up Airbnb’s basic concept:
Airbnb CEO Brian Chesky, intends Airbnb to become an online marketplace enabling small businesses and entrepreneurs to participate in what he refers to as the “sharing economy.” Current users are typically independent and have an average age of 35 years old. It is hoped that Airbnb can eventually enable its users to locate or offer almost anything they want to rent, while managing the transactions through Airbnb’s online transaction management system. Chesky, recognizes that Airbnb’s scope is potentially endless, though caution is needed:
“There are so many things we can do; the most challenging part of this is to figure out what not to do.”
The current issue of Fortune magazine suggests that Airbnb may even have the potential to become the next eBay. Indeed, this e-commerce company has made money from day one, by charging a commission fee of 6 – 12% on each transaction. The company has certainly been successful in winning the support of high-profile investors including actor Ashton Kutcher and LinkedIn founder Reid Hoffman.
Whether or not Airbnb can realize their vision will like any other company be based on their ability to outpace their competition. Imitation websites for bikes, ride shares, office space and other things have emerged and as the company diversifies it will also face competition from other websites that allow small businesses to have online storefronts such as Amazon, eBay and Etsy. Airbnb hopes to differentiate themselves by paying close attention to detail to all aspects of their service, by being user-driven, and by focusing on ease of use with their 3-step buyer and seller transaction process.
Interested in learning how to use Airbnb? Check out the video below:
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Ever since I began this blog 3 months ago, I’ve been waiting for an excuse to do an entire post on a new innovative idea from one of my favorite organizations: Disney. Fortunately for me given Disney’s innovation and creativity it didn’t take long. This week Disney began testing their high-tech FastPass (part of their NextGen project) at their Magic Kingdom park.
The current system: Since 1999 Disney theme parks have offered a virtual queuing system through use of a FastPass. Guests insert their park ticket into a machine at one of the busiest attractions and receive a ticket to return later in the day and skip the line. Typically guests can only get one FastPass every two hours and only a certain predetermined number are issued each day. FastPass holders cannot use their FastPass prior to its listed time, but in spite of its one-hour time slot it is unofficially (based on my experience as a cast member and guest) valid at any time throughout the rest of the day. The FastPass is essential for some attractions such as Soarin’ over California which in my experience typically has long lines.
The proposed system: Disney’s NextGen project is a “next generation experience” technology project rumored to cost over $1 billion. Part of this project is expected to result in the creation of guest wristbands implanted with RFID microchips. Prior to arrival guests may be able to pre select a number of attractions for FastPass, reserve show seats, book character-greeting slots etc. This information would then be downloaded into the RFID microchips, to interact with sensors located throughout the Disney parks and resorts. Additional attraction interaction features may also occur based on the information obtained on the chip on the guest’s specific interests.
The “test sensor posts” and the current FastPass
The current test: This week at Disney’s Magic Kingdom park in Orlando, FL blue RFID sensor posts with a Mickey mouse symbol have been temporarily installed throughout the park. A small number of selected guests have been given bands to scan and test. As they scan their band, reservation data is sent to a cast member’s iPad. The bands are intended to provide faster access to attractions than the current FastPass system.
The full extent of what Disney’s NextGen experience could be, is still under wraps. But one thing is for sure the scope for what RFID technology could do to enhance the Disney park’s experience is potentially endless. I know I would love to test this technology, but what do you think? Share your thoughts in the comments section below.
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