Mobilizing Minds

The scarcest resource today is not capital, but talent. This observation drove two McKinsey consultants to inquire about the factors that make some companies so successful. In the Western economy, they note that a growing proportion of businesses now rely on knowledge workers, that is, employees who must have access to information and exercise judgment to carry out their duties. In this context, the traditional recipes for success are no longer valid: after all, there is no point in trying to boost the productivity of knowledge workers by standardizing their tasks. Above all, traditional hierarchies turn out to hinder the free flow of information and collaboration so essential to success today.
The authors propose a new organizational model for "" the 21st century organization"":
– After years of matrix organizations supposed to compensate for the flaws of traditional hierarchies by facilitating communication across functional borders, the authors recommend returning to a simpler structure, by defining the ""backbone"" of the organization and establishing a clear line of governance (chapters 3 and 4). Indeed, they warn of the complexity created by matrix structures and of the confusion they can generate, often distracting people from core business issues.
– Around this backbone, they recommend establishing a flexible organization governed by market mechanisms, such as a market for talent (chapter 7) and knowledge (chapter 8). Rather than allowing strategy to be dictated by the structure, which leads companies to reproduce past models blindly, the authors recommend managing a portfolio of initiatives (chapter 6) supported by project teams that are formed as needed.
– To breathe life into this type of structure, two supportive measures are required, namely, fostering formal networks to promote horizontal communication among individuals assigned to different projects (chapter 6), and revising performance assessment practices to take account of the profitability of each employee and the ability of individuals to contribute to the performance of the whole (chapter 9).
A stimulating read for anyone who suffers from organizational bureaucracy.