Seven Contours of the 21st Century Organization

Mine was not the best high school, but we had some perks. I got to take an economics class at Yale my senior year, my small cohort mostly went on to Ivy League colleges, and I got to leave school at 12:30pm.

A bus picked a few of us up, before lunch, to head to the Educational Center for the Arts where I, as part of the visual arts program, learned the power of contour.

You are standing before a model or still life, brush in hand. But before you fill in the details of hair color or texture, you must rapidly draw a contour. Stepping back, taking in the big picture, you rapidly carve out the “white space” around what you are drawing. The resulting scribble becomes your map plotting the lines within which you fill in the details.

As organizations evolve into a new 21st century form, driven by more rapid change, digital models, and purpose-driven enterprises, the contour of the organization of the future is emerging. As Gary Hamel wrote, “The outlines of the 21st-century management model are already clear.”

Nearly every organization today claims to prioritize innovation and growth. And yet the organizational norms of the 20th century persist, blocking what leaders say they want most. As the environment demands greater agility, we see pressure building from within. Innovation wants to get out. But it is being stopped.

Forward-looking organizations are recognizing the blockages to internal innovation and starting to remove them. Their new approaches reveal the organizational contour of the future.

If you understand this contour, you can start adapting. What will it take to start moving your organization into 21st-century form?

To understand this, we interviewed over 150 internal innovators asking each to describe what organizational barriers to innovation they face. We tabulated their answers, revealing seven most commonly cited barriers. We then looked at new approaches some organizations are adopting to remove these barriers. The result is a framework for the organization of the future:

Mindset

We are moving from organizations run by managers to those led by intrapreneurs, who act proactively without guidance to see, select, and rally the resources to pursue new opportunities. Narrowly defined, stable roles become replaced with broader, ever-changing ones.

Strategy

From top-down to distributed strategic decision-making. Instead of decision-making being monopolized by a few at the top, it will be dispersed. This will require strategy to become simpler statements of purpose rather than prescriptive plans, so everyone can understand what matters.

IDEAS

From scientific to design-led conversations. Strategic conversations will shift from boardrooms to hallways and evolve from pursuing “What is right?” to “What is possible?”

Experiment

From proving to trying, from valuing results to prioritizing learning. Strategic planning holds a bias toward killing off new ideas, because it asks innovators to “prove it.” To escape this trap, organizations will start putting learning over proof, which means experimentation over plans.

Business models

From one business model to an ecosystem of business models. The premise of the “disruptive innovation” rests on the assumption that organizations operate one business model. But smart organizations are evolving into an ecology of multiple business models. Try to define what Amazon’s or Alphabet’s business models are and this fact becomes plain. Organizations are realizing that planting a field with one strain of crop is more vulnerable to disease than a diverse ecosystem.

Team

From rigid hierarchies to agile teams. For decades our organizations have been structured into divisions and departments. But a new unit of organization is emerging as the most important. Whether you call them teams or tribes or squads, the principle is the same: a small, multi-disciplinary group is more appropriate for the 21st century than a pyramidical army.

Politics

From central planning to platforms. Corporations are simply centrally planned structures that seek to effectively distribute people, capital, assets, and ideas. We have long given up central planning to run our economies. New microeconomic realities are enabling corporations to similarly abandon central planning and evolve into open platforms that empower people and ideas to compete within open markets for capital and assets.

Are you part of the 21st century organization?

Put these seven elements together. Imagine what they imply for future leaders of YOUR industry. What will that future, 21st-century, agile, dynamic, innovative entity look like?

Will it be you?

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