Minimum Virtual Organization as a pitfall of the current crisis

Capgemini

June 3, 2020

The urgency of extreme virtual collaboration is a chance to be used for accelerated digitalization

For most organizations the last months have been everything else but business as usual. Crisis contingency plans have forced companies to suddenly run their largest ever “remote work experiment”. This unplanned stress test has put considerable pressure on existing processes, governance mechanisms, leadership models and collaboration formats.

Teams or entire business units have suddenly turned into a remote working mode. Without proper planning, this can quickly result in confusion, lack of shared information and motivation, impacting the productivity of work considerably.

On an organizational level, an external shock like the one that we are experiencing right now, can be both threatening and liberating. Most executives we interact with are fully aware that they steer an oil tanker, rather than a startup speedboat that quickly adapts to the new circumstances. The reality is that change is difficult to navigate without a shock of this scale. The shock creates a momentum, with a heavy shift in ways of working and a shared feeling that old rules can be broken. That moment is now.

Reinventing what is next

We are already seeing a shift in the way that people work, interact, take decisions and lead, while working remotely. And although we see these shifts happening, we cannot be certain that we have reached the maximum potential in the way we use technology, share ideas and realize projects in a virtual environment. It is very likely that the current phase is just good enough to accommodate urgent changes. There is more room for organizational resilience to better navigate future shocks by enabling people to work from any place, and remaining flexible to react to changing market and customer needs.

In our opinion, companies must seize this current opportunity to accelerate their transformation towards becoming an adaptive and virtual organization that is future ready (and why not – fun to work at). Thereby, we holistically evaluate 8 dimensions of the Operating Model, whereas we focus on the following 5 dimensions; Organizational structure, processes, collaboration (part of the dimension culture), and infrastructure (part of the dimension workplace).

From current collaboration models to the virtual organization

While technology-centric companies may find it easier to focus on collaboration tools by setting up video sharing and conferencing tools, collaboration formats and trainings for everyone to successfully use them, we believe that becoming a virtual organization requires the simultaneous activation of those five dimensions: Organizational structure, governance, processes, collaboration and infrastructure.

Organizational structure – Changing the organizational structure just because large parts of the company cannot physically work together seems to be an inappropriate step. However, the crisis and the virtual working mode still have an impact on the structure – so that it takes a back seat even in traditional companies (more similar to already adaptive and agile companies). The focus shifts on the workflow to effectively piecing the right people together. Nevertheless, a feeling of belonging, stability and purpose is necessary – especially in times of the current crisis, but also in the largely virtual work. So even if the organizational structure loses in dominance, it still has a valuable function. Companies should define this focus of the function of an organizational structure for themselves from the experience of the crisis and translate it into normality.

Governance – Making decisions and managing the company are critical to success at all times anyway. In the current situation, this criticality is even more pronounced. However, if executed correctly, collaborating virtuall offers a lot of potential to make decisions better and in shorter cycles as well as to set control impulses. COVID-19 Task Forces show how effective and easy it is to gather experts for decisions virtually and that reactions to external influences quickly lead to decisions. The communication of decisions and steering impulses is possible within seconds to large parts of the company when using the appropriate collaboration platforms and tools.

Processes – They already dominate the organizational structure in modern organizations. At a time when the vast majority of employees work in physical isolation, the ability to have efficient processes becomes essential. They are characterized by the ability to provide a common thread and orientation for daily work, but also enable the possibility to measure success. Equally important is the intuitive, comprehensible and sufficiently detailed description of work processes – unfortunately, this has often been neglected with the introduction of agile methods. For a sustainable and successful virtual collaboration, it is essential that everyone is aware of their share in the added value, that the individual process components interlock seamlessly and transparency about whether and in what form all relevant services of an organization can be performed in the expected quality.

Collaboration – Setting up the right collaboration tools is a first step but it will be by far not sufficient to grasp all exploitable benefits. Leaders will have to adapt their ways of interacting with their teams, clear virtual collaboration guidelines will define the right formats for virtual or hybrid meetings with designated facilitators, coaches and champions. A culture of experimentation and continuous learning is at the core of success. (For more information on virtual leadership, please click here.)

Infrastructure – The right IT infrastructure needs to be flexible, secure and easy to adopt by all employees, including external contractors or gig workers. All employees need to have access to remote back office tools, cloud-based data, enough broadband when using collaboration tools, on the go or through a VPN from home.

Design and launch your minimum virtual organization

The current crisis outlines a harsh opportunity to critically reflect on the organization’s ability to transform into a digital workplace capable to grasp a wide set of benefits, from talent attraction to productivity and resilience in case of external shocks. The design of the dimensions must be supported by appropriate program and change management.

While most organizations have already initiated the transformation towards a virtual organization, we are only at the initial start of a trend that will continue beyond this crisis. Frontrunners will create a nucleus of a virtual organization, a Minimum Viable Organization (MVO) and start small to iteratively transform the whole organization.

For more information regarding the iterative implementation, the “Minimum Viable Organization”.
For more information regarding the holistic Operating Model, the Organizational Dexterity Framework.
For more information regarding our Organizational Transformation offer, click here.

Co-authors

Markus Cramer

Senior Director | Innovation & Strategy

Capgemini Invent

Carolina Spiess

Senior Consultant | Innovation & Strategy