Project Management Institute

Flat, Flexible Organizational Structures

The Trend Booms On

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Feature Editor: Paul Dinsmore

FLAT, FLEXIBLE ORGANIZATIONAL STRUCTURES: The Trend Booms On

An amazing number of papers (35) were grouped under the track heading “Flat, Flexible Organization Structures and Projects” at INTERNET'S 10th World Congress on Project Management held June '90 in Vienna.

Does this giant literature spotlight signify that “lean and mean” structures are now “in”? Are more dynamic organizational models now generally recognized, along with the techniques for adjusting company culture and individual management styles to fit the needs of lateral management? The papers presented provide some insight into these questions.

PREMISES

Here are some of the premises given in the prefacing remarks to the section of flat, flexible structures (FFS) as set forth in the INTERNET Proceedings:

  • Middle management will continue to shrink at dramatic rates (down to one-third of previous number of managers).
  • Levels of management will be cut; in many cases by as much as 50 percent.
  • Titles and organization ranking will fade into the sunset.
  • FFSs are needed to trim costs and to create capability for solving new complex problems.
  • Developments in information and communications technologies have made the FFSs possible.
  • New qualifications are needed for the professionals who will perform new roles which will in turn be perceived differently.

HIGHLIGHTS FROM THE PAPERS

The papers dealt with themes like project-oriented structures versus matrix structures, organizational consequences of management by projects, human behavior in the FFS, and how to go about attaining the FFS, all backed up by numerous case studies. These are some of the highlights gleaned from the paper and sessions of the 10th World Congress.

  • Managers are already seeing the hierarchy disappear as corporate boundaries, titles, tasks and departments become increasingly blurred.
  • Making the organizational change to the FFS means breaking old patterns, taking risks, creating new visions, and establishing commitment for organization members.
  • In effective FFSs, the customer is brought as close as possible to the organization so that the final user's expectations are met.
  • Top management and direct, production-related employees favor “lean and mean” organizations; middle managers resist the change.
  • FFSs may not be applicable in all situations; a setting of change, ambiguity, and multiple-projects is a pre-requisite.
  • Projects conducted under FFS may be internal (within the organization), external (performed by third parties), and “internal trade projects” (performed in conjunction with other corporate subsidiaries).
  • Artificial Intelligence (AI) may offer means for reaching a new quantum level in flexible, agile organizations.
  • To maintain performance standards, successful FFSs will operate under some form of total quality management program.
  • Tools used in FFSs call for multi-project planning, scheduling and tracking capabilities that will adjust to constantly shifting scenarios.
  • A logical organizational response to the chaotic times is the project-oriented company using flat, flexible structures.
  • Early stages in the life of complex projects are particularly critical, thus the need for free-flowing structures that will address that need.
  • Moves to the FFS may not be crowned with glory; backpedaling results when structures are improperly designed or training is inadequate.
  • Empowerment (the acceptance and prudent energetic use of delegated power) is the key to the success of the FFS.
  • Organizationally speaking, nothing is potentially more disastrous than the concept “never change a winning team.”
  • FFSs are often associated with matrix organizations, which in turn require coupling with work breakdown structures (WBS) and overall corporate strategies.
  • A corporate policy establishing clear criteria on risk management takes on particular importance in FFSs.
  • Effective FFSs are perceived as a systemic approach to performing human activities, with emphasis on the human part.

SO WHAT'S NEW?

Ken Blanchard of One-Minute-Manager fame stated at a February meeting of the National Speakers Association in San Diego, “Everybody keeps asking me for something new. I tell them, ‘We keeping looking, but you still haven't done the things I told you to do five years ago!’”

The same may be true for the application of the flat, flexible structure.

There are surely some new twists, but a lot of the old stuff still isn't being done. The World Congress conclusions reflect this paradox.

Since the days of matrix organizations-which, if not synonymous, are certainly first cousins of the FFS—managers have been faced with the challenges of (1) creating a more flexible, free-flowing organization, and (2) making it work once it is formed. The battle in developing and implementing these FFSs is an on-going one, although the reasons for going to the FFS vary.

“If what you're doing isn't working, then do something else, ” is the reactive maxim that justifies much organizational change. There's also the proactive concept of making a move in anticipation of new situations not yet happening but looming on the horizon. And then there's the idea of “change for the sake of change”—to keep people on their toes and create new opportunities. No matter what the reason, the trend as reflected in the papers reviewed, is definitely toward more flexible organizations.

The move to the FFS is more behavioral than structural, since the objective is to knock down the walls created by structural constraints and teach people how to work without such a rigid, lethargic framework. Effective FFSs are those achieved through some sort of organizational change model. A model proposed by Graham [1] suggests that changes in organizational behavior require a strong phased approach in which each phase reinforces the previous one as shown in this sequence:

Define new behavior, which requires a strong lead and mandate from top management.

Teach new behavior, through management development programs, that involve all levels, including senior management.

Support new behavior, through revamped measurement and reward programs.

Model new behavior, through actions and deeds.

Once the organizational behavior has been adjusted, the “structure” itself loses some of its relevance. The organization begins to follow the newly-defined behavior, not because it has been so “designed” structurally, but because organizational change has taken place.

CONCLUSION

In terms of organizational development, the spotlight remains squarely on flat, flexible structures as shown by the strong showing of papers at the INTERNET Congress. The FFS will be effective to the extent that it is handled less as an organizational structure and more as a behavioral change model. When that concept is grasped, the move to less structured, more agile organizational models becomes a simpler task, involving adjusting employees' behavioral patterns to the requirements of “leaner and meaner” organizations.

REFERENCES

1. Graham, Robert, J. 1989. Project Management as if People Mattered. Bala Cynwyd, PA: Primavera Press.

2. INTERNET, Management by Projects, 10th INTERNET World Congress Proceedings, vol. 1. Vienna, Manz Verteg.

 

Paul C. Dinsmore is author of Human Factors in Proiect Management, Revised Edition (AMACOM, New York, 1990), and is principle of Dinsmore Associates (affiliated with Management Consultants International).

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October 1990

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