Designing Digital Organizations

Designing Digital Organizations

          
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Designing Digital Organizations

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    Control and Alignment Mechanisms

    Many of the companies we studied have formal planning, control, and alignment mechanisms for developing overall strategies, setting goals and objectives, and ensuring that decisions made at all levels of the organization are in sync with the strategies and with each other. As companies rely less on formal corporate hierarchies for command and control, these mechanisms need to be adapted for a flatter, more collaborative working environment.

    Since 1999, Salesforce has embraced a mechanism called V2MOM (vision, value, methods, obstacles, and measures), which guides management thinking on achieving objectives and helps employees focus on their individual goals and expectations in the context of the organization’s goals.

    Marc Benioff, one of the founders of Salesforce, developed V2MOM and has referred to it as a secret management process that helped the company achieve a high level of organization alignment and communication while growing at breakneck speed. He wrote in his book, Behind the Cloud, “At Salesforce.com, everything we do in terms of organizational management is based on our V2MOM. It is the core way we run our business; it allows us to define our goals and organize a principled way to execute them; and it takes into consideration our constant drive to evolve. The collaborative construct works especially well for a fast-paced environment. It is challenging for every company to find a way to maintain a cohesive direction against a backdrop that is constantly changing, but V2MOM is the glue that binds us together.”

    As the CEO of Salesforce, Benioff defines the top level V2MOM for the company on the basis of input from the management team. His direct reports then create their own V2MOMs, which are in sync with Benioff’s. The process cascades down to individual contributors—everybody does a V2MOM. At each level, the methods and measures are negotiated by an employee and his or her manager. In general, major decisions about what to do are made at the top, but deciding how to execute is determined throughout the organization.