Google transalation of interview with Yves Morieux conducted by François Vidal et Jean-Marc Vittori Source: https://www.lesechos.fr/idees-debats/editos-analyses/les-entreprises-adoptent-des-organisations-de-moins-en-moins-efficaces-1002730#Xtor=AD-6000
INTERVIEW - Companies have not yet adapted their organization to digital technologies, says consultant Yves Morieux, director of the BCG Institute for Organization. They have complicated their organization to the detriment of their effectiveness. To change the game, we must put the managers in the heart of the action.
Economist Paul Krugman explains that "productivity is not everything, but in the long run it's almost everything". In France in the 1960s, it grew by 7% per year, which caused the doubling of the standard of living in ten years. Today, it increases by less than 1% per year. At this rate, it takes more than a hundred years, about six generations, for the standard of living to double. We are now in a zero sum game. An essential factor is at work, which escapes economists: companies adopt matrix organizations, more and more complicated and, therefore, less and less effective. They started in the 1980s before accelerating the movement. Of 650 large global companies with more than 10,000 employees, 31% of them had a matrix organization in 2006. Today, they are 77%. And France is at the forefront in this area.
No. The matrix promotes cooperation within the company and is essential in an increasingly complex economy. But most companies do not know how to make this type of organization work. Too often, the matrix is added to a hierarchical structure. Complication is added to the complexity. The best indicator of this trend is the flowering of committees of all kinds so that the hierarchy can respond to new problems. As a result, a process that took three days on average takes eight today. Still on average, it takes seven steps to validate a decision. Managers spend only 30% of their time adding value. The rest of the time, they report on dozens of performance indicators. They handle the complication, with planned tasks that have less and less meaning. Work involves sweat, but sweat does not always involve work ... So teams do not move with the right instructions. France is distinguished in this race to complication, with a time spent in meetings that has increased in recent years eleven times faster than elsewhere!
Businesses keep adding more. A company has, on average, multiplied by six the number of indicators it uses to evaluate its performance. The system has become almost thirty-six times more complex! And every day or almost brings a lot: compliance, integrity ... It will become even more complicated.
Incidentally, has this complication played a role in the appearance of the movement of "yellow vests"?
Absolutely. Our "yellow vests" that manifest for their standard of living are also a consequence of this phenomenon. Political leaders can do little to avoid business complication, but it is as if some citizens are trying to reduce complexity: "Since the economic world does not know how to deal with it and it destroys our standards of living, Well, let's destroy the complexity. All that is known as populism has as its common feature an attempt to stem complexity: through barriers, walls, cutting ties, leaving a union or seeking to overcome interdependencies. But what characterizes the complexity is that it is not reduced. We can de-globalization the exchanges of goods or services, not the information and the data, any more than the climate. When we repress the complexity here, it comes back elsewhere. One can only face it - that is the meaning of the famous "at the same time" - or ignore it at one's own risk. Political leaders can create rules of the game, put a good regulation in globalization, which is a way to deal with complexity. But the economic world has a key role to face complexity without becoming complicated.
The rise of agile organizations, inspired by the world of start-ups, will it not help to fight against complexity?
On paper, one could hope for it. But this so-called "agility" is counterproductive when it is misunderstood and poorly implemented. The "project mode" that allows a limited team to carry out an initiative in a short time is often added to the existing organization and therefore to the hierarchy. Beyond that, the emergence of new technologies that would increase productivity causes, on the contrary, embolisms by automating complexity. For example, the number of e-mails sent to more than ten recipients has doubled in ten years. We still have not found the form of organization that can reap the benefits of the information and communication technology revolution. Businesses continue to work as in the 1960s.
In just a few years, Netflix has transformed La Poste's delivery of DVDs into a leader in the production of programs and video-on-demand on the Internet. Its management principle is not to control by structures and procedures but consists in setting up a context that encourages good behavior. Through its management methods, Netflix creates a context such that the most useful behavior for everyone coincides with the one that the company needs here and now, even though no structure or job description could decree in advance the behavior required since it depends on the circumstances. This management principle is very close to what I call "smart simplicity".
This is not the first time that technology has disrupted production. What had happened during previous industrial revolutions?
With the steam engine, the work has moved from home to the factory, with tremendous returns to scale. With electricity, energy has been decentralized, with a much larger radius of action than pulleys - and infinitely lower losses. Frederick Taylor then conceived how to use scientific work. Today, management has not yet transformed to exploit the immense resources of new technologies. It is not by piling up flat visions of the world that we construct a spherical vision.
I agree with the idea of removing the inefficient "bullshit jobs" whose existence only complicates business operations. But that does not mean that we must also remove management positions. On the contrary, managers have never been so indispensable since they fulfill their mission of declining the strategic objectives of the company on a daily basis. Are the leaders you meet aware of the problem?
When you ask a CEO what are the benefits of digital for his business, he usually has no answer to give you. This is indicative of this managerial revolution that remains to be done, and which is the missing link in productivity.
The company must give more autonomy to its managers and thus leave more room for quality, subjectivity, judgment, common sense. We must accept the vagueness, even apology - even in maths, fuzzy logic has made progress! In France, this autonomy of the managers is particularly important, because the requirement of fairness has led to dispel any subjectivity in the evaluation of the performances. But in increasingly complex businesses, the obsessive search for clarity and fairness can become counterproductive.
We must first understand what managers really do today, how they bring value. It may sound obvious, but it's actually very difficult. None of the classic management tools are useful here, nor is the job description, organization chart, or process knowledge. There is always a distance between prescribed work and actual work. At the time, Taylor understood the real work, detected idle time - even sabotage. We must again measure this distance between the prescribed and the real by mobilizing the advances of the social sciences. With this audit, it becomes possible to put the managers in the heart of the action, with their teams, a place that most of them have deserted for a long time to fall back to meetings or their office. Concretely, how does this repositioning translate?
The manager must manage a system, not individuals. It does not have to make the decisions anymore, but to create the conditions for the teams to make the right decisions. Above all, it must foster cooperation in the company. Cooperation is a horizontal process that can not be measured at the individual level, but it has to be evaluated and this evaluation is necessarily subjective. When we can do without the subjectivity of the manager, we can do without the manager himself. And to manage a system, the manager must be in the field, master the technique. Today, the complexity is much less seen from the top than from the bottom: this gap must absolutely be reduced. The manager can then ask two essential questions to each of his colleagues: how can I help you? And what help can you bring? The power relationship in business is inherently asymmetrical. Employees depend more on the manager than the other way around. But by asking these questions, the manager can put this inevitable relationship of dependence in the service of the common good. In this new organization, what becomes the entrepreneur?
He impels the change. This impetus can not be delegated to the CFO, the Human Resources Manager or the Director of IT. It must come from the top because the change is systemic, it is about the system itself. The entrepreneur is no longer a conductor. He is the chief innovator of the company itself.