There are currently problems within large organizations in the world. Mature companies carry legacy, with relation to technology and culture that creates a barrier for change. Furthermore, the hierarchical structure leads to loss of accountability that leads to bureaucracy and lack of innovation.
What is proposed is an organizational design that is independent and interdependent without the hierarchy that exists in today’s organization that will allow flexibility and adaptability within an ever-rapid changing business world.
Business have attempted mimicking organisms in business, but due to human nature, businesses tend to a multilevel hierarchy to manage.
Using the analogy of evolution from a single cell to complex organism, a company starts as a generic single cell organism. The company grows into a more complex cell, but never split into smaller more specialist cells. This leads to a larger single cell organism that has multiple functions, but cannot adapt due to the size. On a change in environment, the organism dies or survives as a less influencing in the bigger ecosystem, the same way businesses die due to the lack of adapting to new circumstances.
The impact is that organizations grow as one big cell, growing to large in size, but never evolves. In the business world, this leads inflexibility and non-adaptability.
To ensure an evolving and flexible business, the concept of a cell orientated business, defined as an organic organization is proposed. The structure and functioning of the organic organization can be explained as follows
The most basic organism is a single cell organism. Breaking down the cell, it contains the following main components:
- Nucleus – contains the DNA of the cell. In business, this can be seen as the common ethos, culture, strategy and experience of the business in the market that it operates. It also allows each “cell” to use only the DNA required to fulfill their function instead
- Cell membrane – keeps the cell together and is a barrier. This can be applied to boundaries of the business or function within the business. It can also be seen in business as the responsibility and hand-over points.
- Mitochondria and Chloroplasts – this generates the energy for the cell. In the business, these are the functions that ensure that there is resources to complete the work, may it be raw materials, capital or enablers.
As the cell evolves, the DNA becomes more complex and the cell also becomes bigger. If it becomes too big, it splits into two cells, generating a replicate of the original cell with the same DNA. With further evolution and splitting, some cells might become specialty cells to support a more complex organism. A business can start with a small cell containing people, completing all the functions without specific role. The culture of the business and informal governance forms the DNA. DNA of the business isn’t complex, but with growth, formal governance and growth in the culture of the business adds to the complexity of the DNA.
The essential component that ensures the sustainable existence is the fact that each cell is interdependent on each other, therefore a symbiotic link is required. The link in business can be on a people, operations (input/output) and/or IT level. Each specialist business cell can be measured according to the specialty, instead of attempting to implement a one-size-fit-all approach. An example will be to try and measure R&D on cost cutting.
Each cell contains what is needed to manage the specialist function. The cell should not grow bigger than 150 people, as it breaks the structure by losing connections between people. As stated, each cell will be an independent entity, therefore will manage their own support functions e.g. Human Resources, Finances. Yet, to “grow” the DNA, each of the support functions should still share best practices and learning in forums to ensure the efficiency of the organic organization is valid.
The flexibility in this type of structure is the ability to create new specialist cells and with the symbiotic links, leverage on existing cells outputs to adapt to an economic change or opportunities. This flexibility can also be used to remove inefficient cells from the organization or cells that has no value to the organization due to changes in the economic environment
- Autonomous teams requiring minimal supervision or management.
- Removal of management hierarchies from large organizations.
- Ability to create new companies by mix and match of business cells.
- Measurements of each special function are more specific to the function instead of a one-size-fit-all approach.
- Accountability is focused upon a cell instead of lost in the hierarchy of management.
- Removal of silo orientated mentality by creating the most flat structure possible.
- Business will still exist even if one cell dies.