Managing for Knowledge: HRs Strategic Role

Pause For Thought: Is Your Organisation ‘Boundaryless’?

Table 4.1 contains a number of statements that characterize the boundaryless organisation. Take a few moments to think about and rate your own organisation as it is now. You may like to complete from an HR perspective and then at some point get your business colleagues to complete too, and then compare your responses. No doubt you will get different perspectives in some areas, at least it will provide some information on which to have a meaningful discussion. It will also provide an opportunity to gather success stories which can be used to help encourage and support future change.

Although survival in today’s business world requires flexible and adaptable structures, some writers and business leaders point out that this can create a number of tensions for organisations. Homa Bahrami (1996), for example, points out how in the traditional workplace the key area of focus is maintaining control, whereas in knowledge-intensive organisations flexibility and autonomy are critical. Autonomous organisations are characterised by innovation, local recipes, rapid response, future products and have a long-term vision. Bahrami argues that this requires a workplace characterised by the following attributes:

• Multiple centres – the traditional organisational model where the centre is all-powerful does not fit in a business world where organisations need to be constantly changing in response to ever-changing markets. Instead organisations need to structure themselves as a ‘federation’ or ‘constellation’ of inter-dependent business units that are more adaptable and able to support each other with their knowhow. The organisation then is both centralised and decentralised. The centre has a crucial role to play in ensuring cohesion between the various inter-dependent business units. It also has a role to play in ensuring a balance between stability and change and in providing the right steer at the formative stages of high-risk ventures. Each independent unit uses its own discretion about how to deal with business imperatives for their own area as they arise, but set within a clearly defined overall strategic framework.

• Diverse structures – in dynamic and ever-changing environments, organisations need to draw on a range of different structures: project teams, micro-organisations, as well as utilising core employees in different roles. They also need to draw on a blend of different management styles and cultural perspectives. The cultural diversity of an organisation’s top management sends out an important symbolic message to others.

• Multiple alliances – organisational structures that incorporate a number of strategic alliances, or collaborative partnerships, provide a means for pooling complementary capabilities, dealing with the need for rapid product development cycles, as well as providing an alternative way of building strategic flexibility.

• Cosmopolitan mindset – operating in a global business world requires everyone in the organisation to adopt a cosmopolitan mindset that incorporates different culture assumptions and values. Equally organisations need to be prepared to take advantage of having a pluralistic culture, one that can bring different perspectives and solutions.

• Emphasis on flexibility – the need to ensure flexibility in its people is as important as building structural flexibility. Organisations need to consider recruiting people who are experts in a given area but who are able and willing to apply their expertise to other areas. Employees, as much as the organisation, need to adopt a flexible mindset so that they can quickly adjust to new assignments and/or new business opportunities without the need for extensive re-training.

Another design consideration is that of whether to create Centres of Excellence, i.e. specialist work teams who can offer in-depth specialist knowledge accessible to the organisation’s diverse business, thus helping to prevent wasteful duplication. The concept of Centres of Excellence emerged in the last decade as large corporations began to reconsider the benefits of centralised versus de-centralised structures. They were initially seen as a solution to the problem of ‘wasteful duplication’, i.e. where one division spends tens of thousands of pounds on consulting fees to get a new business operation off the ground, only then to discover that another division had already implemented something similar.

As well as helping to address a specific business need, i.e. harnessing and capitalising on existing knowledge, there are other benefits too. First, Centres of Excellence can provide a way of reducing expenditure on external consultancy. If existing organisational knowledge is used more effectively, then organisations can make more effective use of their consultancy budget, targeting it at areas where in-house expertise is missing. However, for this to happen, managers need to be persuaded to consult with these centres, prior to initiating major projects, rather than going off and doing their own thing.

In addition, these centres need to ensure that they can provide a responsive service to the business, if not they will just become another bottleneck in the delivery process. Second, the establishment of Centres of Excellence can open up career opportunities for existing ‘knowledge experts’, providing a way of dealing with the issue of retention. They could also be used as valuable learning ground for future experts, providing that the organisation is willing to accept the overhead of releasing individuals from their existing responsibilities. Third, as the reputation of these Centres of Excellence grows it may be possible to sell this expertise to external businesses. This is a strategy that has been adopted by organisations such as BP and BG Technology.

However, the need for Centres of Excellence, as well as their core deliverables, is something that requires continually revisiting to ensure maximum value to the organisation.

In addition to establishing Centres of Excellence, organisations also need to consider how best to structure/design for building new knowledge linked to ensuring the organisation’s future success. This may mean setting up a physical department, similar to R&D, or it could be utilising virtual teams who have a brief to work on projects that are more future orientated.

A study of knowledge work within Fortune 500 companies by Susan Mohrman and colleagues^[1] concluded that with the right organisational design organisations are in a better position to deliver their business better, learn faster and change more easily. As Paul Myers (1995) points out, this finding suggests that line managers need to consider the organisational structures needed to facilitate knowledge building and sharing, rather than focus purely on technological solutions.

^[1]See Mohrman, S., Cohen, C. and Mohrman, A. M. Jr. (1995), Designing Team-Based Organizations: New Forms for Knowledge Work. Jossey-Bass.