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How talent is challenging the traditional concept of organisation

HR Centre

A couple of months ago I had a very interesting conversation with a senior HR leader in a reasonably-sized technology business. They were looking at an organisational re-design. Nothing earth-shattering in its own right, but the reason behind it was fascinating – very few of their employees aspired to be senior leaders in the traditional hierarchical sense. They didn’t want the stress and the long hours.

It reminded me of another conversation ten or so years earlier. I was speaking at a conference, in Toronto I think, the exact location is a little blurry. However, I remember with absolute clarity what was said.

Talent has moved on in its thinking - and organisations need to evolve

Even then, I had been talking about how talent was becoming ever more consumerised and that organisations would need to become far more flexible in accommodating talent’s preferences in their interaction with work and organisations. Bear in mind that this was before the recent boom in hybrid working. In the Q&A session following my talk, an individual in the audience made a comment, the essence of which was “the trouble with the younger generation is that they don’t want to work hard”.

My response was “well, that’s great news!”. I went on to describe how I felt that my own generation had taken the concept of the “9 to 5” job and turned it into the “100 hour a week” job and that this cycle had to be challenged at some point. Furthermore, if this was how the talent we needed was thinking, then work itself would need to evolve in line with this.

Well here we were, a decade later, and this conversation about organisational re-design seemed to support the view that this was actually happening. Think about what has happened since 2020. The events-driven shift in interaction with work has unleashed a wave of consumer choice in talent markets that we are still coming to terms with. Here, in this simple statement relating to organisational structure, was a really brave piece of thinking; a response to a developing trend which turned traditional thinking on its head.

Yet if we look around, there are actually signs of this developing challenge all over the place. A key finding from our rapid learning curve sparked by the pandemic was that talent was thinking about organisations in a different way than organisations were thinking about talent.

“We learned that talent was thinking about organisations in a different way than organisations were thinking about talent”

One obvious way is the very different interpretation of the word “career”. For a large proportion of the talent sought by our organisations, this word has an expansive and diverse feel, incorporating a mix of different experiences across potentially many different organisations and even several different “mini-careers” within a working life. Contrast this with an implicit underlying assumption in most organisational talent models of a career being “the time you spend with us”. This is just one example of the fact that talent has moved on in its thinking while organisations, largely, are continuing with models which may have had their day.

The reason why this organisational structure comment referred to earlier made a big impact on me was because of its implications. What it was really saying was that, in that organisation at least, there was a recognition that the traditional model of hierarchy was no longer the beat to which people want to march. Yet so much of our organisational thinking (and people strategy) is based on the assumption that people want to, and we need them to want to, progress through a hierarchy. Challenging this is challenging at the very heart of traditional organisational thinking.

And yet this should not be a surprise. We have talked for many years about how the changing landscape, and in particular globalisation and digitisation, are driving an increasing need for skillsets of “network leadership” over hierarchical leadership. This increasingly requires leaders to bring together diverse sets of skills and knowledge from different sources to work on specific issues for specific periods and then potentially dissolve them in order to reform them elsewhere. Yet even knowing this, we have continued to develop leaders in the main around a traditional hierarchical model.

Talent has drawn a 'line in the sand' around purpose and work-life balance

But the leadership implications of this are not where this chain of thought ends. It begins to pull together wider trends and developing movements. Some of these are easy to connect into this. For example, the ‘line in the sand’ which is being clearly drawn in many talent populations around what is deemed acceptable work-life balance. It turns out that this is rather different to the reality that we have allowed to develop in our cultures, where years of cost restructuring have resulted in an organisation which actually relies on individuals working beyond contracted hours and/or contracted responsibilities. History shows that we are skilled at removing people and cost from organisations but very poor at removing work. It is hard to imagine how some of our organisations would continue to run if everyone walked out of the door at 5pm and we weren’t on our phones answering emails out of hours. Work expands to fill the space available. We have yet to see how well it can contract.

Workplace stress is becoming commonplace. Of course, we should not expect to put our feet up and chat our way through the days, but where does the frisson of accountability become a negative force in our lives which saps energy and even impacts health? Anyone wishing to get a handle on this should ride a 6am commuter train and observe the weary, downcast faces on many of the passengers.

Beyond the world of work, there are other symptoms which further bolster this line of thinking. There is a growing search for purpose and values, especially in the younger work generation. Talent is keen to understand where an organisation stands and what it is doing for good. Many of our organisations will be increasingly challenged as to the degree to which they really mean what they say in their paragraphs on Corporate Social Responsibility in the annual report and in their hiring and advertising. Do they really give a damn or are they looking at CSR as allowing them ‘room to operate’? A harsh accusation perhaps, but one which is being increasingly scrutinised by the talent we rely upon.

“Organisations will increasingly be challenged as to the degree to which they mean what they say on purpose and values”

Another driver for a strong focus on purpose and values comes from a growing disenfranchisement with institutions in general. Every day we see examples which serve to erode our faith in the institutions of government, democracy and big business. Research clearly shows that the generations entering work, but also those already in it, are feeling this strongly and looking for organisations to drive wider social outcomes beyond investor dividends. The growing wealth divide in many countries is also playing a key role. Elements of this are connected to a growing sentiment at odds with a traditional commercial model which gives such prominence to remunerating institutional shareholders.

One can follow the logic of this argument easily, albeit in a superficial and naïve way. Notwithstanding all the reasons why many organisations currently rely on institutional shareholding for investment and risk diversification, this model can justifiably be accused of being complicit in implicitly positioning people as costs, driving continual pressure on investment in people development and being a factor in a lack of historic wage inflation.

The need for a fundamental rethink

What we have here are signs. These are signs that attitudes are beginning to coalesce into movements which will at some point impact, or further impact, our notion of organisations. As these causes continue to be taken up by the talent that our organisations need, we will have to face bigger questions and challenge a traditional model which has not really evolved much since the 1950s. We have already started this. Witness the seismic shift for many organisations in adapting to the dam breaking on non-office working. The turbulence from this is still being felt and global talent markets have changed forever as a result. Would this have been quite so steep a learning curve had we not resisted and held back this movement for so long, well past the point where it was a pent up and unsatisfied need? What we released with our rapid enforced shift in work arrangements was not just an increase in hybrid working practices, but a turbo-charging of consumer choice in talent markets. Now it won’t go back in the box and we should expect further ‘waves’ of desired change to hit our organisations for which we need to be better prepared.

“There are bigger questions here than what our org charts of the future will look like”

The remark which catalysed this – the organisation looking to evolve its structure to recognise a declining desire for talent to move into traditional hierarchical leadership positions – is just one dimension to think about. There are bigger questions than what our org charts of the future look like. A completely foreseeable challenge is “how do our organisations of the future work when those in it are working fewer hours?” Do our outputs need to be scaled down, do we invest heavily in AI, do we end up reversing years of headcount reduction or do we look for new ways to achieve more with less which do not conflict with new attitudes around acceptable stress and life balance?

Do we need to think about ways to shift the balance between the desires of our shareholders and the remuneration of our employees so they are better able to deal with increasing costs of living and such that organisations play a very real role in wealth redistribution? What would this mean for our model of running a business in the future?

Will we need to focus on the purpose and social value of our products and services – and I mean really focus, not reverse-engineer a relationship? Or will those organisations who currently have products with a less direct connection with a social outcome begin to find it harder to attract or retain talent? Who knows.

Perhaps the very concept of certain organisations will be up for challenge. Might certain types of organisation evolve to be more like agencies or hubs, dynamically connecting together skills from around the world to drive outcomes which benefit all?

Let’s be clear, I’m not saying that any of this will definitely happen; but what I am saying is that it definitely could if we extrapolate some of the trends and growing movements we see around us. We already know from our post-pandemic experience that some of our established organisational approaches to talent have been exposed as outdated. Organisational thinking has been stable for some time now, but there are signs that a fundamental rethink may be needed. And this time it is likely to push beyond policy and into our foundational concepts of organisation. It won’t land everywhere at once, but the indications are that it is coming and we don’t want to be caught napping. Perhaps some of us should even take the lead, ahead of being forced to. After all, in the world of consumerism, those first to market with what consumers want tend to steal a march. Whatever, let’s not be so complacent as to imagine that organisations won’t have to change beyond a new coat of paint on an old door.

Professor Nick Kemsley

Associate Faculty, Henley Centre for HR & Organisational Capability
Published 19 June 2024

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