Designing Digital Organizations

Designing Digital Organizations

          
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Designing Digital Organizations

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    A Wide Spectrum of Design

    BCG and the MIT Center for Information Systems Research (CISR) mounted a two-year research project focused on designing digital organizations. We studied more than 40 companies, collaboratively and individually, in a number of industries. Some of the companies, such as Schneider Electric, had been established more than a century ago, while others were born in the 1980s and 1990s. The youngest company in our sample, Salesforce, was founded in 1999.

    In terms of business and organization design, the companies we studied span a wide spectrum. At one end are companies such as Valve, a video game maker (Half-Life, Counter-Strike) that has a flat organization. Really flat. No one has a boss, and no one has a title. Employees spend 100% of their time on self-directed team-based projects. However, each team member always knows what his or her job is on any given day. As Valve’s employee handbook puts it, “Although people at Valve don’t have fixed job descriptions or limitations on the scope of their responsibility, they can and often do have clarity around the definition of their ‘job’ on any given day. They, along with their peers, effectively create a job description that fits the group’s goals. That description changes as requirements change, but the temporary structure provides a shared understanding of what to expect from each other. If someone moves to a different group or a team shifts its priorities, each person can take on a completely different role according to the new requirements.”

    At the other end of the spectrum are companies that run according to highly formal and codified business systems that describe their operating models in great detail. These systems have, for example, detailed goals, objectives, plans, playbooks, role descriptions, policies, meeting agendas, and performance metrics. Procter & Gamble’s Integrated Work System specifies the amount of time a manager must be on the factory floor each day, what the agenda for a shift change meeting should be, and what activities a line operator must execute.