Management Structures That Hinder Progress

Years ago, nearly all companies operated on a hub-and-spoke management structure, where significant decisions were referred to one formal boss rather than to whoever was best suited to make the call, regardless of hierarchical positioning. Nowadays, decisions have to made much faster and the hub-and-spoke model tends to slow the organisation
down, due to its inherent inability to enable quick, cross-functional, collaborative decisions.

In the hub-and-spoke model, each area is optimized to deliver results to and curry favour with the higher-ups (or, in the metaphor of hub and spokes, the centre). In today’s fast-paced marketplace, teams that need to wait for a leader to weigh in have lost the game before they start. Leaders instead need to paint a vivid horizon that inspires self-propelling teams to forge ahead with real-time collaboration — then step out of their way. That shift implies something really important about the changing nature of leadership.

Obviously, the shift in leadership competence requires complementary shifts in organisational structure, decision-making processes, and performance-management systems. Instead of a hub-and-spoke system, picture a racing track where each driverless team can compete successfully on the basis of four fundamentals:

Overlapping Goals: each individual and each team understands that they are pursuing one collective organizational goal.
Role linkages: each individual, team, and function will play a distinct role in the race while also supporting each other’s roles. Every individual has to be clear about how the individual, team, and organizational roles are linked.
Constant collaboration: at the foundation of this model is the fact that no one individual or team can win the race alone. They will win only if they play their roles to perfection and help others that they’re linked to.
Continuous reinvention: teams will continuously process new data, creating a landscape of learning and realignment across levels.

There are some signs of a movement away from hub-and-spoke management. One of the central tools of that system was the dreaded performance review and some large companies – including Microsoft, Adobe, Gap and Medtronic – are reported to have dispensed with it, as will Accenture later this year.

Management style has evolved over the last 50 years – and even more so during the last 20. The hub-and-spoke system must be consigned to history if a company is to survive in today’s fast-paced environment.

Are outdated management structures hindering your company’s progress?

Adapted from an article by Vineet Nayar, Harvard Business Review