If you want to go fast, go alone. If you want to go far, go together
It might sound a bit of a cliché, which out of context it most certainly is, still there is plenty of underlying truth to it. In order to get things done it very often works out better when approaching the tasks as a team. An organization is a group of people working together to achieve a goal or accomplish a mission. Sometimes the organization is temporary and will be disbanded after a specific target is reached. Many other times the organization is more permanent and will continue to exist for many years. There are breweries in Europe who are centuries old and date back to the Middle Ages.
Over time private companies and public organizations have been shaped by technology. When the industrial revolution changed the factory, it made it possible to produce 24 hours 7 days a week. This could only work when the supply line to the factory was working well, providing for energy, raw materials and labor. This lead to new professions like procurement, recruitment, inventory control, accounting, etc. in order to keep the factories working.
Mass production required also an higher level of standardization, frictionless transportation, education and other demands that only a good functioning government can provide. With the Industrial Revolution the demands on public services explode as well, leading to more active governments and expanding bureaucracies. And where governments were setting up new rules and regulations it allowed also the creation for new commercial service providers like consultancy, accountancy and most of all legal services.
In the last century these new developments have defined the company. Most businesses will have a finance department, an HR department, a marketing department, a sales department, etc. to support the primary operations of the company. You can kind of draw a generic organizational chart for many companies and this will probably not be far off compared to the actual chart. With the arrival of information technology most companies just added an IT department to the flock.
Information Technology itself needed to mature first. It was more experimental and fragile at the beginning than many IT managers will let you believe. When it started to mature and it lead to the digitization of many services it opened new possibilities for organizations. New digital businesses emerging at the beginning of this millenium didn’t work with the standard template. They were working in multi-functional teams and had a very small support staff. They were also relying on mostly generic IT systems to do most of the routine work. These new ‘disrupters’ could build empires in relative short periods of time and they provided a new template for the organization of companies and others.
Often ‘old’ companies were trying just to copy the superficial aspects avoiding the more fundamental changes they needed to do. They would update their office with a table tennis table, bean bags and a ball pit. They would hire scrum masters to do agile projects with post-it notes covered walls. They would implement a New Way of Working without actually changing the corporate culture and hierarchical structures. For many consultants this is a feast, plenty of projects that are interesting and new without actually being asked to address the underlying problems. Often management asks for the results without being willing to give up some level of control or without being willing to make changes to their own behavior.
Traditional organizations are based on the assumption that information flows from one department to another. Financial information is the domain of the financial department but other departments still need to know their budgets, their expenses, their revenue, etc. Digital organizations are based on the assumption that all information is available all the time and to everyone who needs it. There is not so much an information flow but an information lake. When organizations do not need to manage that flow of information than they can organize themselves in a different way. There is a certain level of democratization of information that enables organizations to become less hierarchical, compartmentalized and status oriented and more people oriented, open and results oriented.
Working within the concept of digital organizations I have made further distinctions and expansions on the following area’s: