The future company is relatively flat, comprising a number of distributed, autonomous resources, human, digital and hybrid, that are guided by an explicit orchestration function. To achieve this model, integration of applications and resources will be a key requirement.
Salesforce research shows that the customer experience that companies provide is as important as their products. To deliver the best possible customer experience, businesses must shift away from silo-design principles to a model that minimizes process friction and more resembles how living organisms grow and flourish.
Living systems are flow-based. They circulate resources throughout the organism and its environment. A small number of pioneer organizations have already proven the effectiveness of this flow by design paradigm, demonstrating that flow-based designs can be better for the customer, better for the company and better for the environment than their silo equivalents and, as a result, represent a new, more sustainable business model for the future. These companies have also shown us that innovation at scale will require the adoption of new business models and flow-based design principles. In a series of articles we’ve been introducing the seven Flow principles and describing how they are emerging as world shapers in the early decades of the new millennium. In this article we are highlighting the principle of Integration.
So far, we have shown that everything and everyone in the post-COVID world is going to become increasingly connected, increasingly decentralized and increasingly autonomous. Employees are going to continue to work wherever they feel safe and productive, customers are going to continue to shop online and expect speedy home delivery. Students will do more of a mix of online and in-person learning, More and more services will be delivered remotely, cars will become autonomous and robot-taxis and drone delivery services will become the norm. Seniors will want to age in place and telemedicine, connected health devices and concierge services both online and in home will support them.
For nearly all companies a big question is beginning to loom: how should they go about managing their resources in such a new world when they’re actually designed for the exact opposite conditions? In this article we will focus on how they should go about managing their distributed employees, suggesting a new model based on the principle of Integration and on related technological advances.
THE “STRUCTURE” OF MANAGEMENT
In the Old Normal, management was conventionally a matter of hierarchy, not of expertise. An individual employee was the de facto manager of the employees directly beneath them in the company’s org chart and a de facto subordinate of the employee above them in the same chart. The act or practice of Management was never called out explicitly because it was taken for granted that the primary responsibility of the “owner” of each box on the chart was the management of everyone else in it. Likewise, nowhere on that org chart would we find “Management” as a function, division or department in the same way we would Sales, or Marketing, or Finance for example.
This hierarchy was supported and reinforced by the physical workplace. A manager, working from a private office, would oversee their direct reports working in the ranks and files of cubicles outside their door, or would figuratively oversee them from a higher floor. In meetings it was implicit but well established practice that, depending on the layout of the room, the managers would sit at the place of greatest visibility, wherever they could see and be seen by their reports most clearly. There were rules to be followed, authorization and approvals to be gained, even etiquette and behavioral norms to be observed. And of course office attire, office hours, company signage, ID badges and security, the canteen, company communications and events, all helped to establish belonging, or at least fit.
In the New Normal, however, where the employees are working from home or indeed from anywhere, and where few of the old ways of establishing, demonstrating and reinforcing hierarchy exist, the traditional command and control, direct supervision model of management that was already creaking at the joints now feels significantly outdated. And while that sounds like a good thing, none of the old ways of establishing identity or belonging exist either, which sounds less good. Meanwhile, our colleague Tiffani Bova, describing a recent Forbes Insight study on employee experience, writes that the study:
…identified a correlation between employee experience (EX), customer experience (CX), and growth. The study found that companies that were hyper focused on enhancing their employee engagement ultimately had higher customer engagement levels and revenue growth. More specifically, these companies amassed 1.8 times more revenue growth (nearly double) than organizations that solely focused on customers. Conversely, the respondents indicated that solely focusing on customers did not correlate to higher EX or revenue.
In short, it may be more difficult than ever for management to focus on the employee experience but it’s also demonstrably more important than ever.
ORCHESTRATION – THE INTEGRATION OF DISTRIBUTED, AUTONOMOUS RESOURCES
So what can companies and their leadership do? Because the New Normal is still so, well, new there are no tried and true examples of distributed employee management. There are, however, analogs and precursors that might be productive. We asked ourselves if there are any other types of resources that are already Flow-based, meaning distributed, autonomous, connected and mobile, and the most compelling example we came up with was autonomous vehicles (which we have already discussed as an example of flow here and here). We then saw that for all the autonomous vehicles that are privately and individually owned there are also emerging models, like Mobility as a Service (MaaS), where they are managed as fleets. And when we looked at the way these fleets of autonomous vehicles are being managed, what we found was the world of Orchestration.
Resource orchestration and service orchestration are already established practices in the world of software, where “the goal of orchestration is to streamline and optimize frequent, repeatable processes. Companies know that the shorter the time-to-market, the more likely they’ll achieve success. Anytime a process is repeatable, and its tasks can be automated, orchestration can be used to optimize the process in order to eliminate redundancies.”
Mulesoft, the world’s leading software integration platform, further defines the goals and the benefits of application orchestration as follows:
“Application or service orchestration is the process of integrating two or more applications and/or services together to automate a process, or synchronize data in real-time. Application orchestration provides a) an approach to integration that decouples applications from each other, b) capabilities for message routing, security, transformation and reliability and c) most importantly, a way to manage and monitor your integrations centrally“.
So when we’re talking about the management of digital resources in contemporary enterprises, where we want to maintain individual resource autonomy and yet still coordinate a great many of them towards a common goal, orchestration is already a key principle. Orchestration is Integration, but critically it is not point to point or hard-wired integration which creates dependencies and inflexibility. Orchestration is dynamic integration which creates almost endless opportunities for reuse and reconfiguration.
Fleet orchestration is a logical extension of this principle, still applying it to software but this time to software that controls physical resources, like cars, buses, and other vehicles, whose primary function is mobility — travel and transportation — rather than information processing. These vehicles are called “autonomous” because they no longer rely upon a human operator or driver and instead are controlled by this embodied software, being mostly sensor or AI based.
In some ways fleet orchestration is not so new. Taxi schedulers and distribution companies have been faced with the challenges of resource allocation and journey optimization for years or even decades. In the world of MaaS, however, fleet managers will need to handle far higher volumes with mixed demand types, mixed resources types, and with far more complex requirements for integration with external entities like automotive manufacturers, mapping companies, regulatory entities, payment infrastructures as well as both individual and business customers in both on demand and scheduled settings.
For example, Bestmile, a transportation software startup, has developed a Fleet Orchestration Platform which, according to the company’s website, “can manage autonomous and human-driven vehicles, supports on-demand and fixed-route systems, integrates with multiple transport modes, and provides flexible applications for travelers, drivers, and operators. Its AI-powered algorithms orchestrate fleets with ultra-efficient ride matching, dispatching and routing proven to move more people with fewer vehicles with predictable operator and passenger KPIs.”
The benefits of fleet orchestration can be enormous: “Our [Bestmile] study found that 400 shared vehicles could do the work of 2700 Chicago taxis with predictable ride times and wait times. An MIT study found that a fleet of 3,000 taxis could meet 98 percent of demand served by New York City’s 13,000 vehicles with an average wait time of 2.7 minutes. UT found that one shared autonomous vehicle could replace 10 personal autos with wait times between a few seconds and five minutes.”
The question is, can this orchestration model extend to companies and the management of their own resources, human as well as digital?
APPLYING ORCHESTRATION TO HUMAN RESOURCES
John Kao, Chairman of the Institute for Large Scale Innovation, has come to a similar conclusion as we have about the need for change in organization and management paradigms:
Unfortunately, our leadership playbooks often remain largely frozen in time, originally designed for the authority and control needed to keep industrial bureaucracies functioning efficiently. But we are in the midst of a fourth industrial revolution that requires agility, rapid innovation and fluid, networked organizational designs. The commandant must give way to the orchestrator, the machine to the network.
Corporate IT departments are already beginning to reflect this shift. In the world of Agile DevOps practices, teams are self organizing and autonomous and they apply orchestration principles to their release activities. According to Digital.ai:
With Release Orchestration, DevOps teams are able to model software delivery pipelines, coordinate automated tasks with manual work, integrate a variety of tools for building, testing, and deploying software, and use data to identify bottlenecks and areas for potential areas for improvement.
And a small but increasing number of companies are applying the Agile philosophy to business functions outside of IT, including Marketing, HR, Legal and beyond, leading towards what has been called Enterprise Agility. McKinsey has described the benefits of this approach, showing that Employee Engagement, Customer Satisfaction and Operational Performance can all be improved by it in its March 2020 paper Enterprise Agility: Buzz or Business Impact?
A key feature of Agile enterprises, according to the article, is that they “can quickly redirect their people and priorities toward value-creating opportunities. A common misconception is that stability and scale must be sacrificed for speed and flexibility. Truly agile organizations combine both: a strong backbone or center provides the stability for developing and scaling dynamic capabilities.”
Orchestration is the connector between the backbone and the dynamic capabilities, between the strategy and shared purpose of the organization as a whole, its customer-focused missions and its autonomous resources. Putting this into practice will not be simple, and should itself follow an agile process, starting with a very small subset of customers journeys.
A critical thing to note here is that the orchestration function is not supervisory in the traditional sense. Orchestrators are not hierarchically more senior than the teams executing the missions. They neither “own” the resources, nor the missions, nor the customers. They are flow-based, rather than silo-based, in the sense that their performance metrics are based on customer success, speed and throughput, not on the size of their budget or on the number of employees they manage
As companies become more and more data-driven, as AI takes an increasingly central role in the operations of a company, so orchestration and other related functions will become increasingly evident and important. As in the fleet orchestration example, we can expect to see Planning and Forecasting, Performance Tracking and Business intelligence become more central components of the organization’s decision making tool set along with Orchestration itself.
We have already suggested that the organization of the future may be like an autonomous car, or even a spaceship, but perhaps really it is more like a fleet of them. In this model, the future company is relatively flat, comprising a number of distributed, autonomous resources, human, digital and hybrid, that are guided by an explicit orchestration function. The job of this orchestration function will be to create “missions”, using multiple, symbiotic intelligences, that anticipate and respond to customer needs, match them with the right resource or team of resources, and then entrust the successful and timely execution of the mission to that team.
This article was co-authored by Henry King, a business innovation and transformation strategy leader at Salesforce. Henry King is an innovation and transformation leader at Salesforce and author of Flow Design, a new design paradigm for organizations and experiences based on the principles of movement and connections. King is a former CIO with 30 years of consulting and executive experience, both in the US and internationally, with expertise in innovation, design thinking, and information technology. King also teaches innovation and design topics at the School of the Art Institute of Chicago and the Institute of Design.
Credits to Vala Afshar