Article++ (The coming of the new organization – Peter Drucker)

This article is a fantastic tool to boost the emerging KM trade industry for especially those in the developing world who stand against bureaucracy by enlightening them of the necessary changes required to not just sustain 21st century business pressures but to lean forward towards an innovating organisation. Peter Drucker is a household name among old school managers besides the younger lot and when he points out the changing landscape of business organizational setups, demands and behavior, these old timers just have to listen.

Drucker associates the coming of the new organization with the advent of data processing technologies available, which although are not a prerequisit for an information based organizaion but without it, a setup can heavily risk drowing into a ‘swamp’ of data. How data processing tools have transformed an act of diagnosis into anaylsis bridges a huge gap between innovation and business operations. Such organizations which foster information turns every business issue into an opportunity, risks are precalculated and business decision success rates soar up.

But with the cavear comes the catch for any organization to parallel itelf as an information based organizaion. Organigrams have to be redesigned, with very little middle management layers, flatter structures and a shift of knowledge from upper echolons to front line workers who are also transformed from mere human hands to knowledge workers capable of working in cross-functional and sometimes cross-domain teams.

The way Drucker outrightly insults the existence of middle management pointing out that it merely plays a role of information relay which by the advent of better technology and better awareness of frontline workers is no longer required, sends out a very strong signal that (middle) management infact becomes inefficient if not a bottleneck.

This also brings about massive change in mindsets of people and their careers. In the coming of the new organization, where specialists are catered, there will be far fewer opportunities to jump to ‘management’ simply because of the lack of a substantial middle management layer. Secondly, in a knowledge intensive society, progress is deemed not by the promotion to management but by the specialization of knowledge and knowledge-based achievements within one’s domain.

Organigrams will also have time driven variations by the introduction of task forces instead of dedicated but sparsely connected departments and divisions. These task forces will be formed by a variation of domains, specializations and functions. Teams will be highly communicative and will participate in the entire lifecycle of an operation as compared to the traditional approach where one domain specialists/functional department becomes a major stakeholder at a particular timestamp in the operation’s lifecycle. These temporary task forces improves the organization’s cost efficiency and encourage the organization to carry out more frequent task forces which points towards an innovation friendly organization.

The bottom line that when workers start taking the bigger picture in mind by abstraction and secondly figure out the information flow between units, they take the track towards an information based setup. Such information flows exist between superiors and subordinates but according to Drucker, most of the information flow will happen within colleagues and vertical functions thus enabling greater abstraction and holistic view for these knowledge workers.

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