Boundary-Less Organization

organisational development change management

. This term describes an organisation that seeks to eliminate the chain of command, has limitless spans of control, and aims to replace departments with empowered teams.

. It aims to illuminate vertical and horizontal boundaries within an organisation and break down external barriers between the company, its customers and suppliers.

. The characteristics of this are

- a flattened hierarchy

- minimization of status and rank

- creation of teams that can cross hierarchies, disciplines, products, services, programs, functions, etc

- a low level of formalization

- more competitive decision-making practices

- creation of comprehensive information and relationship networks

. An example of the boundary-less organization is the lattice structure. This is different from the ladder structure found in most organisations where people are promoted up the chain of command and information is passed down from above. The lattice structure links everyone in the organisation with each other. Lines of communication run directly from person-to-person and team-to-team, free from management intervention. People who cannot handle this structure are those who like a clear understanding of 'who I am responsible to' and 'what I am responsible for'. To get the best out of the lattice structure, staff members need to create their own networks. Two examples of this structure are W L Gore and Associates, and Semco, ie

. W L Gore and Associates is a successful example of the lattice structure where almost all staff are referred to as "associates". Annually theses associates are asked to conduct the reviews of colleagues with whom they work most closely (around 20 people). Leaders who emerge from the reviews form committees to rank other associates on their contribution (financial, technical, etc) which then determines their compensation. Thus compensation is not based on seniority.

"... decision-making at Gore doesn't get reflected in the hierarchy, it gets reflected in where the powerbase is..."

Terri Kelly as quoted by Matthew Smith, 2009

As an organisation gets bigger, there is a temptation to introduce bureaucratic control systems. Gore has handled this by keeping staff numbers small at each location, ie below 200 people. This has resulted in a concept called "campus clusters"

- Another example of the lattice structure is what Ricardo Simmler has done with the Brazilian industrial manufacturer, Semco. He introduced a flat organisational structure, doing away with job titles, got rid of 60% of executives and let associates set their own salaries based on the their contributions to the different teams. This has been coined hyper-democratic business principles.

. Traditional hierarchical organisations' reactions to this management system can be

"...deeply disturbing to executives who've grown comfortable with power and perks of life in hierarchical companies. Leaders who have learned to rely on their titles to get things done are likely to view Gore's model with as much trepidation as envy..."

Gary Hamel as quoted by Matthew Smith, 2009

(sources: Stephen Robbins, 1998; Matthew Smith,, 2009)

 

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