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October 20, 2005

The 21st Century Organization

McKinsey publishes free (but registration required) articles on the web.  One this week concerns new organizational structures and supporting technology for increasing the productivity of knowledge workers.  Key graphs:

"About half a century ago, Peter Drucker coined the term "knowledge worker" to describe a new class of employee whose basic means of production was no longer capital, land, or labor but, rather, the productive use of knowledge. Today, these knowledge workers, who might better be called professionals, represent a large and growing percentage of the employees of the world's biggest corporations. .. These talented people are the innovators of new business ideas. They make it possible for companies to deal with today's rapidly changing and uncertain business environment…

"The inefficiency of these professionals has increased along with their prominence. Consider the act of collaboration. Each upsurge in the number of professionals who work in a company leads to an almost exponential—not linear—increase in the number of potential collaborators and unproductive interactions. Many leading companies now employ 10,000 or more professionals, who have some 50 million potential bilateral relationships...One measure of the difficulty of this quest is the volume of global corporate e-mail, up from about 1.8 billion a day in 1998 to more than 17 billion a day in 2004. As finding people and knowledge becomes more difficult, social cohesion and trust among professional colleagues declines, further reducing productivity…

"Four principles for the new organization:

1.       Streamlining and simplifying vertical and line-management structures by discarding failed matrix and ad hoc approaches and narrowing the scope of the line manager's role to the creation of current earnings

2.       Deploying off-line teams to discover new wealth-creating opportunities while using a dynamic management process to resolve short- and long-term trade-offs

3.       Developing knowledge marketplaces, talent marketplaces, and formal networks to stimulate the creation and exchange of intangibles

4.       Relying on measurements of performance rather than supervision to get the most from self-directed professionals."

Lots more in this interesting article.

Posted by DavidK at October 20, 2005 04:29 PM | Permalink

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