With rapid technological advancements disrupting the way organizations work, paired with intensifying competition from more nimble organizations that quickly adapt to changing market demands, organizations are under pressure to remain relevant in the market. The siloed bureaucratic organizational structures of the past that focused on effectiveness and efficiency rather than speed and agility are no longer effective.
Leading organizations are breaking down siloes and redesigning their workforces to be able to continuously adapt to change amidst the uncertain digital environment. To achieve this, companies will need to build more collaborative teams, boost employee engagement and productivity and create an agile organization to fuel innovation.
The “team”, according to leading HCM industry analyst Josh Bersin, is evolving into the fundamental organizational design principle of a company. He states that redesigning the workforce for greater adaptability requires a shift away from hierarchical organizational structures toward models where work is accomplished in teams.
Building a team-centric workforce requires a flat and open organization where employees work together in teams and collaborate across departments and even across geographical locations. Designing a team-centric workforce means that individuals transparently share information and seamlessly transition from one team to another based on project requirements rather than remaining in siloed departments with a top-down approach.
The team, according to Bersin has primarily been driven by a shift in employee demographics as more millennials and Generation Z have started to enter the workforce. Younger employees that are just entering the workforce desire greater flexibility in how, when, and where they work, and are open to adopting unconventional organizational structures that are more team-centric. These “digital natives” thrive on social media technologies outside of work, and they expect similar connectivity tools within the workplace.
Stephane Kasriel, CEO of global freelancing platform Upwork, believes that this new wave of employees is likely to “reshape work as we know it”. Millennials and Generation Z already account for 38% of the workforce, and that figure is expected to surge to 58% within the next decade.
In fact, adoption of team-based models is becoming increasingly popular. Deloitte’s 2019 Human Capital Trends survey reveals that 31% of respondents now operate mostly or almost entirely in teams, with another 65% saying they are hierarchical but have some cross-functional team-based work. These teams break down hierarchical reporting structures and openly collaborate by sharing goals and projects, allowing information and feedback to flow openly, and reward one another for their skills and abilities.
Despite the growing significance of teams within organizations, only 32% of respondents in Deloitte’s Global Human Capital Trends survey say they are designing their organization to be more adaptable and team-centric. According to McKinsey & Company, the biggest challenge for HR leaders looking to build team-centric organizations is proper governance from executives. This involves aligning company resources with strategic priorities and providing managers with the coaching needed to become well versed in agile ways of working.
Although it is beneficial to enable teams of employees to independently make small-stakes decisions, companies can ensure that teams remain aligned to the overall organizational strategies.
Here are some of the steps that HR leaders can follow to create agile teams within their organization and ensure long-term success: