Organizational Misfit.
The future organization does not fit in the containers or the mindsets of the past.
Until around January 2020, most companies operated under the following five assumptions or beliefs:
1. The organization gives structure and directs work.
2. Tenure and experience are critical to advancement.
3. Most of the work is done inside an organization.
4. Fairness requires a common set of rules and ways of working that apply to all.
5. Most people are full-time employees of the company.
Here are beliefs that have already begun to replace current beliefs and will by the end of this decade completely supplant these traditional ones:
1. The organization enables talent to create structure and direct work.
2. Expertise and constant learning in a changing world are more highly valued than tenure/experience.
3. Most of the work is done outside an organization by suppliers and by accessing talent as needed.
4. Fairness means customizing programs for each talent and giving everyone equal access to those programs.
5. Most staff are either contract workers, freelancers, or fractionalized employees.
Because of these new beliefs and assumptions, organizations must rethink how they design everything, from compensation systems to decision-making processes.
Dump the charts!
To create a redesign that is effective now and for years to come, we need to think about structure more broadly than is typical. Most people think of business structures from an organizational-chart perspective. They envision boxes and connecting lines that indicate who reports to whom or the flow of goods and services from the company to various markets. That’s why when people talk about restructuring, they focus on things like flattening the organization and eliminating some of the lines or streamlining the supply chain.
While all of this is important, it’s just part of what needs to be redesigned. An organizational chart is a two-dimensional view—I’m advocating a three-dimensional redesign.
For years, we’ve fooled ourselves into believing that the organizational chart represents how the organization works. That was okay in less complex, less volatile times, but it’s no longer acceptable. Consider that organizational charts and maps indicate how leaders want the company to operate, but the reality often is quite different.
For instance, the maps and charts document zones of control rather than zones of influence. A title represents a position that may be vested with authority but not necessarily the authority to determine how work is done. These charts also impose clarity where there often is none. Business is messy, and operations often shape-shift based on circumstance, ignoring the flowchart. The official organizational structures are also limited in scope, failing to account for all the external partners, freelancers, and other outside groups that have become necessities.
Consider the static nature of organizational design, driven by internal factors (that is, areas of expertise) and client/customer categories. In an increasingly globalized world filled with new marketplaces and transformed by technology, this design must be more organic, adapting to external stimuli.
Tenets of organizational design.
On the most basic level, it means they must design structures from the outside in rather than the inside out. In a fast-changing world, companies must create their processes and procedures based on marketplace realities (that is, emerging competitors and changing talent mindsets) rather than relying on “the way things have always been done around here.”
They should also embrace multiple models of working rather that a single model. Given the multiplicities in workplaces today, models need to differ based on country, competition for talent, and whether the focus is on current business or innovations.
And finally, it means outcomes and goals take precedence over process and control.
Financial results, customer satisfaction, and talent attraction/retention should take priority over following strict procedures or maintaining tight control about how work is done.
Design discussed as a singular object is a mistake. Plural designs make a lot more sense.
For this reason, redesigning the structures must take the following factors into consideration:
Customer benefit. This may seem obvious, but company design often reflects internal requirements first and customers second. Given the increasing diversity and changing needs of customers, organizations should consider creating different designs for different customers. This might mean co-locating with a customer or integrating with customer suppliers
Talent advantage. In the past, points of differentiation included price, service, innovation, and so on. Today, the main differentiator is talent. Companies must organize in ways to ensure that their talent is satisfied and growing. Considering that talent often is spread across different locations, possesses different work-style preferences, and represents a wide demographic range, one organizational model doesn’t fit all. Instead, the model should accommodate the full range of talent.
Change adaption. The previous two points allude to this one: organizational design must be flexible, able to shift as changes occur. Competitors change. Laws change. Markets change. The design, therefore, must anticipate that these shifts will occur and be created in such a way that adapting a policy or revamping a process isn’t a big deal. This is an organic, evolving approach to design (versus an artificial, static one). To deliver on strategy, one needs to update the design continuously.
Permeability. Traditional designs are closed systems. Today, they need to be open. They must be capable of connecting and fusing with other companies in an increasingly con- nected, fast-moving world. A company and its deliverables grow by combining capabilities and products from different external firms or being part of those other firms’ deliveries.
Trust a key to Organizational Re-design.
To commit to this type of redesign requires trust—management must trust talent and teams to determine the best ways to drive financial results, customer satisfaction, and talent attraction and retention. By restructuring roles, talent takes the initiative while management guides and coaches.
This trust extends to empowering teams to solve problems and capitalize on opportunities in ways that make sense for their markets (rather than everyone following the mandate from headquarters). Management’s restructured role involves setting parameters—they grant their people freedom within a framework. They know where the guardrails should be erected to prevent teams from getting in legal difficulties or taking unreasonable risks.
Is your organization biased toward yesterday or tomorrow?
While many organizations have taken steps in this direction, most are not there yet. To assess redesign progress, the following questions might help:
Does your company possess agile systems and processes? Is it flexible when it comes to how and where work is done and how partnerships are initiated?
Can you deliver customized products and services? Does your organizational structure support personalization or is one particular system or process mandated?
Are the policies and protocols of your organization designed to facilitate trust among teams and customers?
This is a an extract from 2 pages of a chapter called Redesign the Structures from Rethinking Work which has been called “that rare book that simultaneously helps you look at the world, your work, and your life in new ways.”
CEO’s, Deans of Schools, Heads of Talent who have had access to the book believe it is the most comprehensive, yet distilled, highly realistic and yet future forward take to every aspect of work from strategy to talent to technology to financials. Available for pre-order. Turbocharge your career, unleash your teams and reinvent your company’s tomorrow! Learn more here.
Thriving in the Long Run.
Successful individuals and firms tend to have a commonality to their success.
Behaviors that unite them regardless of country, industry or culture they operate in.
Things that allow them to thrive consistently over long run
They all display a sense of perspective, an ability to be perceptive, a constant hunger to pioneer and a dogged constant persistence.
Perspective: With time and experience comes a sense of perspective.
An understanding that the world does not revolve around oneself or the firm.
This allows one to become more empathetic, generous and invest in relationships.
Relationships for the long run.
A sense of perspective also brings with it the realization that life and career while in one way are short in other ways they span decades and will bring a tangle of good and bad, ups and downs. To succeed one needs to grimace and march on in the bad times while not losing all sense of proportion and propriety when the force appears to be with us.
Perspective is also important to companies, so they see where they fit in their eco-systems and can determine both who to partner with but also to visualize their category broadly enough to see opportunities and threats outside a narrow slice of geography, time, or market.
Successful people and firms also put things in perspective when explaining and making their case. They place things in historical or other frameworks to build convincing stories.
Perceptiveness: The Cambridge dictionary defines someone who is perceptive as one who is “very good at noticing and understanding things that many people do not notice”.
This noticing and understanding can be about being emphatic in how one deals with people or seeing a niche or hiccup in a process that many may miss or to be self-aware of one’s weaknesses and mental models.
Today we live in a connected, collaborative world where people are looking for customized solutions. While data informs, insight and the wisdom are extracted by the perceptive.
Perception can be honed and grown and will be a key for success as it will be what helps differentiate carbon based analog feeling individuals from increasingly powerful silicon based digital computing machines.
Perception means being close to customers and market trends and to pay attention to the little signals. A combination of EQ and an increased sensitivity to the finer shade of things.
Our perception and their power and precision will be what will drive profitable results.
Pioneering: Long lasting firms innovate, invent and are idea driven. They do not let their roots tie them down but rather use roots to feed their wings to fly to the future.
These innovations can be across a range of a company’s system from supply chain to logistics to customer service to pricing to engineering breakthroughs to re-thinking their business.
To succeed as an individual eventually everyone needs to become who they are.
We need to find our voice and superpower and each of us in doing so pioneer by becoming special and differentiated in our own way.
Defining oneself is an act of pioneering.
Switching jobs, cities and goals are all acts of taking a different path and trading the known for the unknown.
These are all forms of pioneering.
Persistence: Part of persistence is continued practice.
Practice of a craft, a skill, an art.
A portion of it is patience and recognizing that the reaction to a thing is what will determine how the thing affects us and often not reacting but instead waiting is the most prudent thing to do.
A lot of persistence is recognizing that it is in the everyday doing, the everyday improvements, the everyday re-invention and repair after setbacks that forge us in the foundry and furnace of industry and life.
Persistence is practicing a daily resurrection.
It is sculpting each block of stone and placing them together that builds the cathedral.
Day by day.
Year by year.
The power of compounding skills, relationships, and returns.
How every “overnight” success comes to be…
Build Perspective. Hone Perception. Risk Pioneering. Remain Persistent.
AI, Humans and Work: 10 Thoughts.
This past Friday, I had the opportunity to present at the AI-volution of Culture 2.0 held at the Times Center in New York City. The event was created by Quilt. AI, a company on whose board I sit and featured the talk show host and comedian Trevor Noah, the incredible chef Massimo Bottura of Osteria Francescana, Katie Drummond the Global Editorial Director of Wired, and many other extra-ordinary presenters.
Given the density of talent the organizers allocated a total of ten minutes for me to speak about AI, Humanity and Work.
10 thoughts about AI, Humans and Work in 10 minutes.
1. AI is still Under-hyped. While Moore’s law doubled processing power every 18 months, AI is doubling its capabilities every six months or less.
Less than two years from Chat GPT most recent Open AI model GPT-o1 is capable of reasoning and returns output that should make every consulting company truly wonder about their business model. And this is just level 2. Coming soon is level 3 where AI works as an an autonomous agent ( probably by end of 2025) and then level 4 (AI that can create new knowledge) and finally AI that can operate like a firm before the end of the decade.
2. AI itself will be like electricity and is unlikely to be a differentiator for most firms. Every firm is likely to leverage the same foundational models such as Open AI, Anthropic, Gemini, Llama, and Mistral. Some will hope that their propreitary data they have be the differentiator. This may be true to a point but it will not be AI but how a company leverages, incorporates and supports its strategy using AI versus having a strategy for AI that will be key.
3. AI is not alive but can be thought of as a new species. Mustafa Suleyman the Co-Founder of Deep Mind and now at Microsoft has suggested that we think of AI as a new species that we are bringing into the world. How should we train, manage and consider legal and other frameworks for this species. It is not human but it will increasingly appear so.
4. Knowledge will be free and every knowledge workers job will change in 2025. Knowledge when it comes to facts, figures, data and the like will be meaningless since everyone will have the same access to information. If your firm is built on knowledge bases or your position is based on controlling knowledge it is time to re-think the model. The key will be wisdom, nuance, voice, taste as well as perspectives, points of view and plans of action around data, information and knowledge.
5. The key about AI is not to ask what AI will do to us but what AI can do for us. AI will be good for the world. It will be a slingshot that allows the small to compete with the large. It will create major breakthroughs in the field of science, education (personal tutoring for everybody possibly), medicine and many others. The CEO of GitHub predicts that we will end up with hundreds of millions of people being able to program in the next two or three years without knowing how to code helping generate a new wave of ideas and creativity. The key is to think about how to turbo-charge oneself and ones firm versus defending the status quo and fretting about change. With such a mindset the possibilities are endless.
6. The simpler questions are about efficiency and effectiveness. The real question is more existential. AI will deliver efficiencies by getting things done faster and cheaper and as importantly more effectively by unleashing insights and freeing talent to work on areas where humans excel and let the math and pattern finding and the rest be done by the machine. But the smart companies are thinking about how to re-invent, re-imagine and re-think their business. In the world we live today with distributed and unbundled work, next generation technologies and multi-polar globalization why are more companies not re-imagining their businesses versus just focussing on making yesterdays model cheaper and more effective?
7. Every company should embed, enhance and extend. Every company should at minimum embed AI into the firm’s processes to remain competitive. Better still they should enhance the company’s products and services. In addition to embedding AI and using it to enhance products and services, firms should consider how the technology will expand the definition of its products and services. A company’s best opportunities and threats are likely come from outside its immediate category and AI allows it to extend into new areas.
8. Every individual should embrace, adapt and augment. The biggest mistake any individual or leader can make is to outsource learning and expertise building to some other firm or person. Do not outsource your tomorrow and your ability to learn and grow. These are the early stages and there is not a lot of historical knowledge. As many of the long term experts in the field remind me very few of the firms that say they have deep expertise in the area even mentioned AI three years ago! Importantly the key concepts and tools of AI are easy to learn. Embrace AI by using it, learning it and finding ways to up ones AI quotient. Here is a way to upgrade one’s AI quotient. But embracing is not enough. We need to re-imagine our job and adapt what we do to reduce our exposure and time to things that machines will do well ( allocate, monitor, measure, delegate, process) and increase our exposure to what machines do less well ( create, build, mentor, guide, inspire). Finally think of how we can augment this new species. Not compete. Not ignore. Augment.
9. Future proof yourself by focussing on the 6c’s. Individuals and companies should invest in six skills to thrive in the new world. These are cognition (constant learning), curiosity ( looking ahead versus backward which is what machines train on), creativity (connecting dots in new and unexpected ways), collaboration ( learning to work with humans and AI species), convincing ( if everybody has the same knowledge the difference will be in understanding customer needs and creating stories to differentiate) and finally communication ( writing and presenting skills).
10. The most successful people and firms will go deep AI and deep HI. The true differentiator in the AI age will be HI. People will need AI to compete just as today without the web, mobile phones and other technology an individual or company cannot compete. But it will be human intelligence, human intuition, human insight, human imagination and human ideation will be the difference.
7 Steps to Transformation.
“Between the idea
And the reality
Between the motion
And the act
Falls the Shadow
Between the conception
And the creation
Between the emotion
And the response
Falls the Shadow”From “The Hollow Men” by TS Eliot.
A trait of leaders and individuals who lead successful transformation is that they excel in overcoming the gap between the idea and reality.
They achieve real and measurable organizational and business transformation.
They understand that the shadow is the gap between the plan and the outcome, the strategy deck and the business results, the possibility and the achievement.
Transformational leaders recognize that the single biggest challenge as well as the best enabler of overcoming the gap is focussing on people/talent inside and client’s future needs outside.
After the strategies, the acquisitions and the re-organizations nothing is really achieved.
Everything is easy in a Board Room or Consultant Deck but people get in the way.
But once people are aligned nothing is impossible.
Because companies do not transform. People do.
Seven Steps.
Alignment takes time and successful leaders are always managing transformation through a seven step program that closes the gap.
1) Confronting reality: Transformation means change and since change is difficult it must be made clear that there is no option but to change. Usually some combination of changes in peoples behavior and technology advancements gives rise to completely different business models, competitive sets or market expectations. The lack of urgency or clarity about the need to change is the most common reason transformations fail. This is sometimes true with companies led by long time leaders comfortable in the ways of the past who have high margin current businesses.
World class leaders and companies are never defeated. They decide to defeat themselves by chanting the following mantras:
Cannot sacrifice margin.
New competitors and markets are too niche or too unsophisticated.
Customer and clients will not accept the change.
We do not have the skills and this sounds like a different business.
All true. But that is why leaders are paid. Not to state the obvious but to take the company to tomorrow.
The single biggest driver of success is leaders who look at reality in the eye and do not turn away. They face the shadow.
And then they lead the company and themselves across it.
2) Simple and frequent communication: Change must be communicated again and again in simple ways. The use of analogies and stories. Examples from other industries. Progress updates. All in language that is human and understandable versus some corporate buzzword bingo.
This communication is not just internal but with clients and the analysts if the company is public as well as with suppliers and partners. Share the road map of where and why the changes are happening and why they provide future competitive advantage.
3) Realistic empathy: Transformation is always painful because it requires us to twist ourselves into new forms. To navigate a period of uncertainty and doubt. In the metamorphosis between a caterpillar and a butterfly there is a very ugly larval stage. It is important to signal the difficulty and commiserate with the challenges. Be aware there will be setbacks and pushbacks and often mid-journey corrections when one is deep in the shadow.
4) Detailing of personal benefits: To cross into the unknown and to take a risk there must be a clarification of what the benefits to the individual are versus just to the company. For instance they will learn relevant skills, be more promotable or be more hire able. Most employees do not have enough equity or long term loyalty to a company to be told that if it is good for the company it is good for them.
5) Aligned incentives: Successful leaders know that if they want to create new skills, new approaches and new behaviors they need to incentivize those new skills. When firms fail to navigate the shadow of transition it is usually because the incentive systems are still aligned to the business model and power structure of yesterday.
6) Investment in upgrading the talent mental operating system: Without a significant investment in training of new skills needed for the new world it is hard to transform. While some talent will be acquired from outside, successful leaders ensure that existing workers are provided with ways to upgrade their mental operating systems.
7) No sacred cows: This is the hardest in many ways. To succeed Domino’s decided their fifty year pizza recipe needed to be replaced and they were a pizza logistics company and not just a pizza company. Microsoft dropped its focus on Windows and eliminated the Windows operating division. Adobe dropped packaged software and moved past a creative only focus.
No division, no employee and no past tradition should be sacrosanct except that decisions must be legal, ethical, scientifically aligned and have a high chance of delivering mid to long term financial success.
Check how many of these seven steps you or your company are undertaking.
Also these seven steps are not just ways to transform companies but to transform ourselves to make ourselves more aligned with tomorrow. We need to face our own personal realities. Understand that change sucks. Invest in learning. Be willing to unlearn and let go.
The future does not fit in the containers of the past or the mindsets of the past.
Every one of us as and individual and a leader can transform and soar.
Now available for pre-order. More about the book including table of contents, endorsements from CEO’s, Deans and Futurists and places to pre-order.
Rethinking Work.
This post provides an update and a request before we return to regular posts next week.
The Update
For the past 18 months I have been working on my second book which after having been edited, fact checked, proof read and indexed by a team at HarperCollins is ready to go into production in Hardcover, Audible, Kindle and e-book formats.
Rethinking Work is for everybody who works, whether you are a longtime senior leader or a brand-new employee, whether you work in a large company or for yourself, and whether you work in a developed or developing market.
Work is central to our lives and as it gets redefined, nothing is as important as being informed and provided with tools to thrive in the coming transformation.
The book covers a range of topics including:
Who will people work for? A growing number of people are choosing to work for themselves while others are opting for greater control over who they work for. This will lead to more options both for employees and employers on how to structure their work.
What will organizations look like? Like nothing in the past. We will no longer have a single organizational model or design but instead have a wide range of operating styles, structures and sizes.
Why will people work? Two-thirds of workers under 30 are combining different gigs to not only satisfy their financial needs but to their own personal satisfaction and sense of purpose
Where will people work? In the metaverse. At home. In morphing offices that bear little resemblance to traditional workspaces. With team members in other countries and customers on other continents.
When will people work? Whenever. The 9-5 workday is already passing as efficiency lessens in importance to innovation, disruption, and agility.
How will leadership change? We are evolving to a new type of leadership from management focused to growth, agility and learning focused.
The book is divided into three sections.
The first section examines why we need to rethink work—the five factors that are causing traditional structures and styles to be ineffective.
The second section analyzes the ways in which work needs to be rethought.
The third section addresses what we can do about it—the steps that organizations can take to change themselves so they’ll be prepared for the Great Rethinking.
Every chapter is filled with data that will surprise you, insights that will make you re-consider many in going assumptions but most importantly actionable frameworks and approaches that everyone can use to thrive as an employee, team member and leader.
The Request
Rethinking Work will be published globally by HarperCollins on on February 4, 2025.
It is now available for pre-order wherever you buy books.
This link contains over a dozen sites from Amazon to Walmart to Independent Books to Porchlight (for bulk orders) as well as some blurbs for the book from prominent business and academic leaders: https://rishadtobaccowala.com/rethinking-work
If you have found the thinking and writing I share in this free thought letter for the past four years useful it would be terrific if you pre-ordered a book or two! And if you are in a position to buy for your team or firm look at the Porchlight link which gives you discount pricing for bulk orders.
Book sales are highly driven by pre-orders since more the pre-orders, more the books ordered by the various sellers and more merchandising support by stores and HarperCollins.
So while the book won’t be in your hands till Feb 4 ordering early can help make it a big success. So if you can please look at the different options when you scroll down this page or some of the sample links below and pre-order!
Here are the Amazon, B&N, Indie Bound( for Independent Book Stores), Walmart and Porchlight (for bulk books) links. Books are also available for pre-order globally at the country outposts of Amazon and other book sellers
And if you have not read my first best selling book Restoring The Soul of Business: Staying Human in the Age of Data you can learn more about it hereand order for immediate delivery. It is as timely today as when it was written selling hundreds of copies a month.
Here are direct pre-order links for Reinventing Work:
For Orders of 25 or More:
Link Here
Complimentary Tickets to see Trevor Noah, Massimo Bottura and many more in NYC on September 20 at the NY Times Center at the AI-volution of Culture 2.0
Some of you will remember that last year, I shared access to an event called the AI-volution of Culture hosted by Quilt.AI (I am on their board).
The second edition of this event is taking place in New York City on Sep 20. Speakers range from senior execs of large companies (Bel, McDonalds, Estee Lauder, Pfizer etc) to celebrities including Trevor Noah and the incredible world renowned chef Massimo Bottura - all discussing AI.
This year, I will be co-hosting the event along with the Founders of Quilt.AI.
I plan on sharing a preview of my second book in addition to hosting conversations on remaining relevant in the short, middle and long term.
Like last year I have some complimentary tickets available. Here is the event link and the code you can use to avail of the complimentary ticket.
Event Link: https://www.quilt.ai/ai-volution-of-culture
Code: Rishad