Sensing a Need to Operate Differently

Human Resource Executive Online

This excerpt from "The Corporate Lattice," by Cathy Benko and Molly Anderson,
highlights some of the work Pitney Bowes has done to transform its workforce
operations and culture.

"We're really having to learn how to change our work processes so that you can
have people halfway around the globe working on the same thing," says Mike
Davis, senior vice president of global human resources at General Mills. "Our
global teams are telling us the work process has to change, because if team
members have to wait to check in on every step, they lose a whole day waiting
for replies on check-ins across time zones."

Pitney Bowes has adopted these concepts as the underpinnings of its
transformation from a product company selling postage meters to a solutions
company helping customers manage their "mailstream." For most of its history
(more than one hundred years), the company manufactured and serviced
postage machines.

Its workforce was highly segregated among employees in factories, customer
service, and management. Most factory workers performed a single task in the
line, usually from memory. Their work was repetitive and routine.

By the mid-1990s, newly appointed (and since retired) CEO Mike Critelli has
intensified the company's focus on mailstream management, with greater
investments in technology to produce digital mail machines customized to
customer specifications.

This shift changed the "how" of the company's work, because building and
servicing the new machines involved a high level of interaction with customers
and was technically more complicated than in the past.

The transformation required a fundamental change in the company's operations,
starting at the factory floor and moving all the way to the top. Factory
workers were rearranged into self-directed teams that read blueprints and did
troubleshooting in real time. Factory foremen learned how to be coaches who
inspired teams to perform, no longer relying on a command-and-control approach.
Engineers and the sales force, and eventually even the finance and marketing
departments, switched from a task-based view to a results-driven, team-based
one.

Pitney Bowes is not alone in sensing the need to operate differently. A number
of companies have adopted flexible teams as their basic operating unit.
Companies use cross-functional project teams that form and disband as needed
instead of having tasks move serially from department to department. "As
companies become more global enterprises, careers are increasingly being built
on demonstrating skills at marshaling resources of more temporary teams than
permanent structures," says General Mills' Davis.

Notes Pfizer's Tanya Clemons, "It stands to reason that being continually
adaptive in response to the ever-changing marketplace requires three things:
more autonomy on the part of the individual, greater global collaboration among
virtual team members, and a vast proliferation of project-based work."

Indeed, the average number of projects has increased fortyfold in the past two
decades. The United States had almost 8 million project workers in 2006, with
1.2 million net job openings in project-based industries likely each year until
2016.

To put it in monetary terms, the Project Management Institute estimates that
approximately one-fifth of global GDP spending, or about $12 trillion, is now
spent on fixed-capital projects such as power plants and factories.

For most of the twentieth century, companies were organized in either
functional silos or individual business units (or both). As an early sign of
the emerging lattice, starting in the 1970s companies began to adopt a matrix
organizational structure to increase information sharing and speed the
assignment of resources to new areas.

In contrast to a functional organization, where an employee has one manager and
is a member of one department like sales or production, employees in a matrix
structure often have one "solid line" and other "dotted line" bosses. For
example, a salesperson might have one reporting line up to the head of sales
and a second reporting line to the regional manager. People work in
cross-functional teams by the very design of the matrix structure. Matrix
organizations bring with them their own set of challenges -- including, at
times, employees' receiving conflicting directions from multiple bosses, a lack
of single-point accountability for success or failure, and political infighting
over resources. But matrices provide compelling benefits too. They promote
collaborative working styles and enable business decisions that consider
multiple perspectives such as function, product, customer, and geography.

Lattice organizations foster these positive behaviors along horizontal
structures, bringing the best resources and information to bear on intersecting
issues and opportunities. For example, widely dispersed virtual teams -- often
with a variety of experts based in different global locations -- are delivering
strong results.

Fifty-four global teams studied in thirty-one companies, including Intel,
Textronic, and Royal Dutch/Shell, were found to be not only more productive but
also more innovative than face-to-face teams.

According to the study, "Far-flung global teams make decisions faster with more
input from others and develop policies that are implemented worldwide with
fewer problems than conventional teams meeting face-to-face often and
regularly." Teams find productive ways to communicate, partner together, and
tap in to the power of diversity.

Collaboration is an important enabler of dispersed ways of working. In addition
to capitalizing on the best qualities of matrix reporting structures and
far-flung team configurations, lattice organizations are going even further
along the path of job redesign.

Just as an easily reconfigurable production system is a success factor for mass
product customization, so too is the design of modularized jobs -- unbundling
activities that make up traditional jobs so that work can be allocated in a
greater variety of ways among team members, increasing opportunities for
efficiency, learning, and fit with life -- a key element of the lattice
organization.

Static, task-based job descriptions are being replaced with competency-based
descriptions to provide more adaptability in how work is divided up and
accomplished from one day to the next. Job modularization is also enabled by
team-based control and decision making about how projects get done and who is
responsible for which piece.

The film business is an example of a highly adaptable and fluid work structure.
The entire industry is project based, with teams composed of "diversely skilled
members who work for a limited period to create custom and complex products or
services."

One study showed that only 19 percent of people in the industry were employed
exclusively by one firm. The rest worked as subcontractors and had
"boundaryless careers." Team members decide among themselves how to accomplish
the tasks at hand, customizing the fit between work assignments and individual
abilities and circumstances. The needs of the business and the needs of the
individual are matched in real time.

The lattice organization rethinks who does what, with an eye toward
making movement across and within teams as seamless as possible. Given the
highly contextual nature of how and what work gets done, a company's task is to
provide teams with the tools needed to manage the right match between the
company's needs, the capabilities of team members, their career-life needs, and
the career-enhancing developmental opportunities that projects afford.

"Work units have to collectively make these decisions, and they have to make
them based both on the needs of the work and the needs of the employees,"
explains Lotte Bailyn, a professor at the MIT Sloan School of Management.

"It can't be done individually. It has to be done collectively by the people
who work interdependently. It needs to involve people in decisions about how to
get a product or service out productively and address the needs they have in
conjunction with achieving this result."

One example of the approach is physicians, who among the elite professions have
the highest proportion of people working fewer than thirty-five hours a week
beginning in their late thirties. Doctors' ability to work part-time later on
seems to be a payoff for the grueling hours of residency early in their
careers, and it appears to ease transitions between periods of working and not
working.

Economist Claudia Goldin and her colleagues at Harvard University found that
doctors move in and out of the labor force, interrupting their careers for a
year or more at a time, with far less financial penalty than in other
professions, such as financial services and law. Such career-life transitions
are possible because of a restructuring of the way work is done in many medical
specialties. Instead of going solo in individual practices, doctors are often
employed in group practices, which function as teams that jointly configure
their schedules to provide high levels of accessibility and quality care for
patients at a sustainable pace and workload for doctors.

In obstetrics, for instance, doctors in group practices take turns handling the
demanding times they need to be on call for births and sometimes rotate the
patients so that women get to know every doctor who might eventually deliver
their babies. Medical practices like these have, surprisingly for the nature of
the work, turned out to be models of group work and flexibility.

Redesigning jobs so that people can more readily move from one job to another
greatly enables career-life fit, but it also delivers on the career-enhancing
developmental opportunities people seek. A large-scale study of functional
flexibility -- conducted at thirty-six hundred Dutch companies employing more
than eleven thousand people in a variety of industries -- showed "a positive
relationship between functional flexibility and skills development," in large
part because people felt they had "greater autonomy in directing their skills,
involvement in decision-making, and access to training."

In another example, three health care organizations in the United Kingdom
changed their approach to staffing so that many of their people could step into
several different roles, depending on the need for workers at any point in
time. These organizations found that the arrangement created increased
opportunities for staff development -- a competitive advantage in a tight labor
market.

As market uncertainties rise, companies look for options to deploy their
people. By designing jobs with an eye toward development of transferable
skills, companies gain adaptability.

Rethinking work creates a nimble organization that can operate with efficiency
and effectiveness. In the case of Pitney Bowes, the work redesign led the
entire organization to be more customer-focused and ultimately more profitable
than before.

According to Amy Titus, a former BearingPoint consultant who was involved in
the Pitney Bowes transformation, the shift resulted in "everyone in the chain
adding more value, in part because they understood customer needs, and in part
because they were much more engaged in their work."