The Evolution of Work: Understanding the Past to Shape the Future

The concept of the future of work has been around for quite some time, but it has gained more attention since the pandemic. The idea of a hybrid workforce has been at the forefront of discussions, but the future of work encompasses much more than just remote vs. in-person working. It answers questions such as: How should we think about organizational design against the backdrop of a rapidly changing environment? How do we decrease organizational and data silos while ensuring ownership and accountability? What models of leadership are effective in navigating complexity and building high-performing teams? How do we bring joy back into our work? How do we create space for humanity? Before we can begin to think about the future, we must first understand our past. Many prevalent leadership practices were codified in the early 1900s The history of the enterprise is essential to understanding where we are today. The enterprise as we know it started to emerge in the early 20th century, with the pace of change accelerating as we laid train tracks across the country, blanketed the world in electricity, and pumped oil out of the grounds. Our ability to be more productive was increasing, but capricious leaders and a largely illiterate workforce led to ad-hoc business practices and decisions guided by nothing but a good guess. As one might imagine, this was not entirely effective. Soon, Henry Ford visited a slaughterhouse in Chicago and saw the power of mass production. It was around this time that the roots of dehumanization within the workplace were born. Supported by the research of Frederick Winslow Taylor, Ford carried these principles into automobile production, significantly increasing the rate of production and lowering the cost to build. Academics during this time codified these practices and created a new curriculum that would shape the next 100 years of business: the Master of Business Administration.

These practices enabled rapid growth through the 20th century By the 1960s, college education was on the rise, and technology advanced, leading to automation. Our workforce was becoming smarter and even more productive. We were implementing business practices focused on efficiency, and the average age of a company on the S&P 500 was about 60 years. By the 1980s, enterprises enjoyed tremendous growth spurred by globalization. Layers were added to manage the swelling size of organizations. Staff groups grew as functions became increasingly centralized, and processes proliferated, shortcutting our critical thinking. Fear-based leadership styles became immensely popular as the educated workforce started to push back on enterprise leaders.

The 21st century wall of new needs & industry disruption Growth from efficiency gains (process improvements, cost-cutting, etc.) has a limit and we’re seeing that growth slow in large organizations. Meanwhile, the internet and technology have significantly lowered the barrier to entry, allowing hungry startups to take on the enterprise monoliths that previously dominated markets. In the past decade, the number of innovation groups increased dramatically in response as did the number of digital transformation efforts. Meanwhile, startups focused on meeting new and emerging customer needs that were non-obvious to their enterprise competitors. Or maybe they were obvious, but the focus on efficiency and process had prevented the roots of innovation (change) from taking hold. It’s no surprise that the average age of a company on the S&P 500 dropped to 12 years, and McKinsey is projecting that 75% of businesses currently quoted on the S&P 500 will disappear by 2027.

So where will growth come from in the 21st century?

Our hypothesis at Amplify is that meaningful growth won’t come from top-line or traditional efficiency gains. It’ll come from a new kind of efficiency gain: organizational performance. Organizational performance is critical to the success of any business. However, in today's rapidly evolving business environment, there are a number of internal and external forces at play preventing this. Here are five of the most significant external forces that are likely impacting your organizational performance:

New generational demands. The workforce today comprises four to five generations, including millennials and Gen Z, who have specific demands from their employers. They want a better work-life balance, more flexibility, and the opportunity to learn and grow. Organizations that fail to meet these demands are at risk of losing top talent to competitors.

Organizational structure is too bureaucratic. Many organizations still follow a traditional hierarchical structure, where decision-making power is concentrated at the top. This rigid structure slows down decision-making, reduces flexibility and innovation, and creates a culture of micromanagement. As a result, organizations may struggle to adapt to change, making it difficult to stay competitive.

Leaders aren't equipped to lead organizations through uncertainty. Effective leadership is essential in times of uncertainty. However, many leaders lack the necessary skills and experience to navigate their organizations through challenging times. Why? The model of leadership being taught is from a time where there was not this level of uncertainty. As a result, leaders struggle to communicate a clear vision, adapt to change, or inspire their teams to perform at their best. This can lead to confusion, a lack of direction, and low morale among employees.

Employees aren't engaged. Employee engagement is crucial for organizational performance. Engaged employees are more productive, innovative, and committed to their organizations. However, many employees today are disengaged and disenchanted with their work. They may feel undervalued, unsupported, or unappreciated, leading to absenteeism, turnover, and reduced productivity.

Digital disruption is eating the organizational structure. Digital disruption is transforming the business landscape, and organizations that fail to keep up risk becoming obsolete. New technologies, such as artificial intelligence, machine learning, and blockchain, are revolutionizing industries and creating new opportunities. However, they are also disrupting traditional business models AND the organizational structures that enable them. Organizations are facing challenges with data siloes and a lack of cross-functional collaboration, requiring organizations to redesign their organizational structures quickly to stay ahead of the competition. To overcome these external forces, organizations must focus on building the organizational capabilities that drive performance:

An organization that is designed to meet the needs of their employees. This goes beyond benefits and perks. Millennials and Gen Z look for development opportunities, a clear mission and values, and competent leaders. What would it look like to create the conditions for individuals to take stock of and transcend their blindspots and see errors as opportunities for personal growth? Creating an organizational that is deliberately developmental as been shown to increase company performance.

Empowered decision-making across the organization. An organization’s ability to sense and respond to external and internal is critical and it’s becoming increasingly difficult to do when the decision-makers are insulated from the truth. What would it look like to ask employees for new ideas on how to set goals, craft strategy, allocate resources? To organization within the bounds of clear accountabilities? Creating stronger relational responsibility and empowering employees to drive decision-making can lead to stronger engagement and a stronger strategy as it has the perspectives of many instead of a small, select few.

A strong bench of leaders who are equipped to lead through uncertainty. Organizations must invest in leadership development, training, and coaching to equip their leaders with the skills and experience needed to navigate a rapidly changing ecosystem and drive performance. What would it look like if we equipped leaders with tools to become more aware of themselves and of others? With the tools to make better decisions in times of uncertainty? Helped them build their knowledge of what it takes to build high-performing teams, grounded in behavioral science? A focus on leadership is the lynchpin of any organizational change. It has to start from the top.

A clear purpose, a culture of belonging and psychological safety, and a level of autonomy to engage employees. The research is clear, employees need a clear purpose, a sense of belonging the ability to take risks, and empowered autonomy to stay motivated, engaged and happy. What would it look like if we built cultures to be more human and humane? What if we equipped leaders and teams with new methods to be relationally effective? To have challenging conversations? To be more collaborative and less individualistic? A strong culture is the next competitive advantage. Is yours designed with intention to create the ecosystem required for success?

A (repeatable) process for evolving aspects of the organizational culture and design. In the same way that large organizations have been implementing entirely new systems and structures for enabling always-on innovation, we need to ensure that our business leaders and their HR partners have a repeatable process in place to ensure the organization’s design is aligned to the strategic needs of the business and that the culture attracts and retains top talent. In conclusion, these forces will have a significant impact on organizational performance. By understanding and addressing them today, organizations can stay competitive, adapt to change, and thrive in today's rapidly changing business environment.