Every year, Deloitte publishes its highly respected annual Global Human Capital Trends report. The 2016 edition, based on 7,000 responses from interviewees spread across more than 100 countries, bears the illuminating title The new organisation: Different by Design.
The title is well-chosen given that organisational design has rocketed to the top of the agenda for organisations globally. Of all the statistics in the report, the most interesting is that92% of senior executives and HR leaders worldwide rate organisational design as a key priority.
In fact, the research reveals, it is considered the most important trend of all – ranking ahead of the three perennial stalwarts of human resources management: Leadership, Culture and Engagement.
For many years, businesses have directed energy and investment into changing the behaviour of their people. What this research underlines, however, is a widespread acceptance that the time is ripe to take a serious and ongoing look at company structures, creating an environment where people can be successful, rather than trying to get people to fit an outdated model.
Of course, restructuring is nothing new in financial services. Few banks were left unscathed in the wake of the global financial crisis, and for many it was a case of savage retrenchment. Moreover, it has become increasingly rare to find major financial services organisations without an internal Head of Organisation Design.
The emergence of niche challenger banks and the move into payments by tech giants such as Apple and Google are just two of the proliferating threats faced by the traditional players. Fleets of foot competitors bringing market disruption are a major factor driving organisational redesign.
This is a global phenomenon. In February 2016, Australian regional lender Bank of Queensland became one of the latest banks to bow to the pressure for change, announcing it would be spending around Aus$15m on significant restructuring. Its chief executive Jon Sutton said in a statement that the rationale was “building a more flexible and efficient operating model, which is increasingly important given the accelerated pace of change in financial services.” He added that the aim was also to “improve the way we work by reducing duplication and manual processes and assist us in finding better ways to share capabilities across the group.”
The point about sharing capabilities is a good one and mirrors another of the important insights from the Deloitte report. As companies strive to become more agile and customer-focused, they are shifting their structures from traditional, functional models to flexible, interconnected teams.
This has led to the rise of a new organisational model – a ‘network of teams’. Teams are being built and empowered to work on specific projects, and coordinated by, or aligned with, operations and information hubs that Deloitte compares to military command centres.
One interesting aspect of this move to ‘pieces of work’ is that it will fuel a blending of interim and permanent roles. It has been well documented that the “jobs for life” mentality is long gone and organisations now understand that people are not joining a business with the expectation of a 10+ year tenure, but the completion of a defined role which may result in moving internally, or looking outside the organisation to progress.
The growing prevalence of the flexible ‘network of teams’ model also sits well with the rise of open innovation and crowdsourcing as forward-looking companies seek to access solutions from outside the corporation. Some companies are even harnessing a crowdsourcing mentality internally. Accountancy firm PwC, for instance, last year set about ‘crowdsourcing overtime’. Members of its 120-strong team of R&D tax specialists could volunteer to process claims outside normal office hours – thereby speeding up the service offered to clients – in return for a cash bonus.
The workplace is evolving fast and companies in the financial services sector cannot afford to stand still.
Following a recent briefing that she delivered for internal staff on the impact of Brexit, Head o...
Two-thirds of UK finance heads lament the “Brexit effect” on businesses of rising inflation and import costs
The “Brexit effects” of rising inflation and import costs, plus a slowdown in executive interest...