Each spring, McKinsey’s global managing director Dominic Barton meets with the leaders of about 15 global organizations to get advice on our emerging ideas. Last year, Dom invited me to go along, but there was a price of admission: putting some thoughts down on paper about the “organization of the future.” As a firm, we had a number of research initiatives underway connected with this theme, and although they were far from complete, Dom suggested we start getting feedback. I sketched out three big priorities (embracing digital tools, achieving agility, and nurturing new kinds of leaders), which our advisors found hard to disagree with but urged us to investigate further.
As we did, we realized that our terms needed to be sharpened. “Organization of the future” implies that there’s a single structural solution to the demands being placed on today’s companies, but that’s simply not true. Instead, as this issue of the Quarterly suggests, every company should be thinking about how it “organizes for the future,” by which we mean reconciling the need for organizational stability with the reality that technology-enabled changes in business processes and workforce automation are rapidly uprooting traditional pillars of company confidence.
In their article “Organizing for the future,” my colleagues Aaron De Smet, Susan Lund, and Bill Schaninger suggest that part of the answer is workplace labor platforms—digital tools that may, ironically enough, help us strike a more human balance. Ericsson chief human resources officer Bina Chaurasia describes some of her company’s early efforts to build globally integrated processes on such platforms.
The importance—and challenge—of rethinking the organization at the moment is highlighted in three other articles: “Four fundamentals of workforce automation” summarizes the early results of a major McKinsey research effort on the automatability of activities (demonstrated technologies could automate as much as 60 percent of labor activities in the United States) and jobs (just 5 percent could be completely automated). “Agility: It rhymes with stability,” meanwhile, offers advice for designing a backbone of structures, governance arrangements, and processes that enable dynamism. And Roche CEO Severin Schwan suggests what it takes to build an innovative organization.
Leadership implications abound, starting with how to maintain organizational health amid rapid change. As executives seek to do so, they should bear in mind new McKinsey research suggesting that leadership behavior that works in healthy organizations is less likely to work in struggling ones, and vice versa.
Inspiration for embattled leaders can come from many sources. Jeffrey Pfeffer, a professor at Stanford University’s Graduate School of Business and the recent author of Leadership BS, suggests five books that he thinks can help. And McKinsey’s Nick van Dam and Els van der Helm explain why leaders who don’t get enough sleep could be damaging their organizations. Manish Chopra, also of McKinsey, offers a personal reflection on how meditation has been a useful coping mechanism in his case. These are valuable reminders that while many of the challenges to the organization come from technology (robots, artificial intelligence) and the seemingly unstoppable pace of competition, people remain at the center of how we will adapt.
Speaking of adapting, you might notice that this issue of the Quarterly has an updated look. We hope it helps you enjoy our ideas—the rigor and relevance of which we don’t intend to change.
Download the full issue of McKinsey Quarterly 2016 Number 1 (PDF–2.9MB).
