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The End of the Corporate Ladder

Guest Author Blog: Cathy Benko and Molly Anderson, Authors, The Corporate Lattice: Achieving High Performance in the Changing World of Work.

The phrase “9 to 5” more aptly describes a campy 1980s filmthan the workplace today.

Globalization and technology are creating more virtual and dispersed teams, yet management practices haven’t kept pace.

One indicator—forty percent of offices typically sit vacant each day, a savings potential unrealized in many companies. The shift from an industrial economy to a knowledge one also means that 21st century work is less routinized and repetitive.

Project work, for example, has increased forty fold over the last two decades. Organizational hierarchies have changed over the same time as well with twenty-five percent fewer rungs for upward advancement.

Collectively, these changes are collapsing the corporate ladder model that was the dominant structure for work in the 20th century.

Performance and productivity today are more dependent on a highly educated workforce that is profoundly different from the one in place when the ladder model evolved.

Today fewer than 1 in 5 households have a full time spouse who works outside the home and a full time spouse who tends the homefront.

Women are now half the workforce in the U.S. and they are the primary breadwinner in almost 40% of families.

Men’s share of housework and child care is rising, and along with it, their work-life conflict which now ranks higher than women’s in dual career couples.

From Boomers to Gen X to Millenials, each generation is expressing that flexibility and career-life fit are a priority. Add to this mix the complexity of an increasingly multi-cultural workforce, and it becomes clear that workers’ needs, expectations and definitions of success simply don’t match those of the homogeneous workforce of days gone by.

Guest Author Blog
Guest Author Blog

Enter the Corporate Lattice

Lattice organizations are not simply reacting to these forces but rather are redesigning the foundations of work itself.

In the process, they are customizing the workplace to deliver both high performance for their shareholders and sustainable career–life fit for their talent. “More flexible ways to work are a path to better performance, to better productivity, to better returns for the corporation,” says Xerox chairman Anne Mulcahy . “This is a way of improving business results rather than just a way to accommodate employees’ personal lives.”

"Organizational hierarchies have changed...as well with twenty-five percent fewer rungs for upward advancemen" -Authors, The Corporate Lattice, Cathy Benko & Molly Anderson

In mathematics, a lattice allows for movement in all directions and each point can connect to all others, much like a high speed network. In organizations, the corporate lattice describes careers that can develop in multiple directions; work that has an array of options for how it is performed; and participation in solving problems and generating ideas that moves from top down to all in. We call these the “lattice ways.”

Lattice ways to build careers offer multiple paths for learning and growth. “Every function used to have narrow jobs with narrow progression structures,” says Mike Davis, senior vice president of global human resources at General Mills . “Now we’re seeing much more mixing and matching — cross-functional assignments, cross-country assignments, people taking time off for personal leaves and then coming back. It’s really quite varied.” Lattice organizations provide custom careers, enabling mobility across a variety of work experiences, and engaging employees so they do their best work. Employees also become more versatile, and that helps the company adapt more quickly to change.

Lattice ways to work rewrite the ladder notions of when, where, and how work gets done.

Technology is a critical enabler.

But mindset, management practices, and culture are just as important. Lattice ways to work focus on results and accountability. “Face time as a means to measure productivity of knowledge workers is becoming less and less relevant,” says Tanya Clemons, senior vice president and chief talent officer at Pfizer. “Management-by-walking-around measures are being replaced with means that more accurately measure contributions, including accomplishments relative to goals and team feedback and results.”

Companies that adopt lattice ways to work are achieving higher performance.

BOOSTING PRODUCTIVITY BY 25%

Frontier Communications chairman and CEO Maggie Wilderotter notes that thirty percent of Frontier’s customer service agents are working from home, and, on average, these workers are 25 percent more productive than those who work in call centers. Retention of work-at-home agents is also double that of agents who work at the center.

Lattice ways to participate invite, welcome, and expect ideas from everyone, regardless of position on the organizational chart — and companies that do so reap greater innovation as a result. They also cultivate a culture of transparency, essential for creating trust among diverse and distributed groups.

John Donovan, AT&T’s chief technology officer, created a mass participation approach to innovation that, by design, would not limit participation by the box occupied on the organization chart.

The process features a Web site that allows anyone (and Donovan is quick to underscore anyone) to contribute an idea, become a collaborator, or offer a challenge. “This is meritocracy at its best—a highly diverse set of people, in every sense of the word, crowd-sourcing and crowd-storming,” says Donovan. By the end of its third quarter, the site had more than twenty-four thousand members who generated two thousand ideas, and the first season’s winners have been funded and are prototyping their ideas.

Common to the lattice ways to build careers, work and participate is the enabler of a customized workplace that provides options for both employers and employees. Options create flexibility and adaptability. For individuals, options provide choices to integrate career and life. For employers, options provide a greater range of responses to the high rates of change and volatility in today’s business environment.

Combining the power of the lattice ways

Many companies have made some progress in at least one lattice way. But the majority of efforts remain piece meal, reactive and siloed. Lattice approaches are constrained by lingering ladder cultural norms, business rules and structures. By taking action on all three lattice ways and connecting them to each other, companies achieve a better payoff.

At Deloitte, for example, the benefits of combining lattice ways is apparent: Nearly 90% of those who perceive the three lattice ways in action are highly engaged. These employers are committed to going the extra mile to deliver results. By contrast, only 30% of those who did not perceive any lattice ways in their work experience are engaged.

"This is meritocracy at its best—a highly diverse set of people, in every sense of the word, crowd-sourcing and crowd-storming." -AT&T, John Donovan

Cisco’s reinvention of itself after the dotcom bust exemplifies a lattice-in-action organization. Cisco adopted a system of councils and boards along with social media and other technologies to increase collaboration across organizational chart silos. It had to work hard to make this new model successful. “We discovered collaboration was different enough from how we used to operate that it wasn’t enough to just put good leaders on the councils,” says Randy Pond, executive vice president of operations, systems, and processes. “We needed to shift our cultural mind-set and provide more structure to support this change.”

A new model for developing careers at Cisco has also emerged to support the shift—one that emphasizes lateral as well as vertical moves to grow high-potential, next-generation leaders with a broad understanding of different areas of the business. And options for integrating career and life have expanded as flexible work becomes the norm.

These efforts showcase how being a lattice-in-action organization can contribute to remarkable results. Cisco emerged from the recession of the early 2000s more profitable than ever, and it became one of the top one hundred largest companies in the world in market capitalization and revenue.

The old ladder belief that high performance and sustainable career-life fit are opposing forces is giving way to the new lattice reality: The two are mutually reinforcing — and inextricably linked. A lattice model is key to adapting to and tapping into the power of this shift.

__________________________
Cathy Benko, vice chairman and chief talent officer, Deloitte LLP, and Molly Anderson, director, talent, Deloitte Services LP, are co-authors of The Corporate Lattice: Achieving High Performance in the Changing World of Work (Harvard Business Press, 2010)

Have a book suggestion? Email me at bullishonbooks@cnbc.comAnd follow me on Twitter @BullishonBooks

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