The Future of Organizing — Characteristics of new organizations

As organizations navigate rapid technological advancements and global transformations, they are evolving into diverse forms from digital nomads to large global networks, all the way to decentralized autonomous organizations (DAOs). Strategic adaptability, focusing on core values, and long-term goals are essential amidst constant change. Leadership is shifting towards servant and transformational models, while relational intelligence is becoming crucial for team dynamics and customer value creation. AI-driven automation and dynamic, resilient operations are redefining business processes, emphasizing the need for transparent cultures and a relational workforce capable of adapting to new contexts while maintaining strong customer connections and building lasting legacies.

Diverse Forms of Organizations

There will be myriads of different forms of organizations, from digital nomads and solopreneurs to large global networks made up of entire ecosystems, and from face-to-face brick-and-mortar businesses to DAOs completely run by code living on a digital ledger.

Intelligent and Creative Evolution

I titled this part of the series “The Future of Organizing” because it is hard to tell what kind of organizations and hybrid models of organizations we will come up with. Humans are intelligent. Intelligence is creative. Intelligence finds ever-new ways to organize the flow of information (and matter) from input to process to output, channeling feedback into new input. Systems are the manifestation.

Organizations are the crystallization of how we organize ourselves.

And this is about to drastically change.

Order amidst Chaos

The world is in transformation and it is likely to stay that way for a while. That sense of stability, as we have seen it in some countries over the last decades, will soon be an echo of the past. We are in the liminal space between what was and what will be. Organizations need the ability to respond to these constant fluctuations strategically.

When old systems and structures are no longer sufficient and the new ones aren’t clear yet, it is wise to focus on the why first.

When everything is in transformation, we get to think about what we would like to create in the first place: bringing a desired order to the chaos. Instead of constantly reacting to the moment, leaving us exhausted and anxious for the next thing to occur, we should focus on a world we would like to live in, a brand promise we are willing to commit to, and then roll with the punches as they will come anyway.

Key shifts in how we organize ourselves

Technological and Human Evolution

There are key shifts in how we organize ourselves, resulting from the evolution of technologies like LLMs and the evolution of humanity as a species. This evolution had already been underway and was accelerated by moments like the pandemic, where we glimpsed new autonomy in a hybrid world and united humanity with a common threat and common interest beyond national borders.

Organizational Impact

These evolutions have shifted all aspects of the organization, including:

• What it means to be a leader
• How teams relate to each other and create value together
• The way we innovate business models and processes
• Operational structures and how quickly we need to adapt them to new strategies
• How we view “core business” versus innovation
• How our customers’ and employees’ stories shape our brand

In each of these domains, new relational capacities are required to keep pace with the transformations around us and the pervasiveness of AI and technology in our daily lives.

Purpose-Driven Leadership

Beyond achieving results, leaders get to be agents of transformation in service to the greater good

With the advent of AI, especially LLMs, there is a growing fear that AI will replace people in organizations. This concern is not limited to low-level workers; it also includes management and executives at the highest levels.

This will impact leadership and requires leaders to step up to a new level of leading. A recent study I was interviewed for found that AI pushes leaders to focus on servant and transformational leadership styles.

Source: Transformative or disruptive? exploring the impact of generative AI on leadership, Shields, Kevin David

Both servant and transformational leadership at the core are about relating.

They are about relating to self and learning to transform oneself toward more capacity to create, and about doing that for others, transcending oneself in the process.

Instead of purely hierarchical organizations with relatively static processes, future organizations will require leaders who can support teams throughout the organization in self-directed activity.

We don’t need leaderless organizations, but instead leader-full organizations, where everyone on the team is a leader, assisted by AI that tracks, manages, and documents those relationships and supports the collective genius.

Shifting Team Dynamics

From Co-Workers to Co-Creators

To harvest this genius, networked global teams will connect ad hoc to solve challenges and develop optimized processes and business models to address them. Life is a single-player game you can’t play by yourself. We all need each other and thrive on creating together. Children do it naturally. Then our respective traumas and breaks in psychological safety lead us to put up defenses, build walls, cement identities, and let that growing ego get in the way.

In school, we learn to compete with each other more than to co-create, especially under pressure.

To overcome creative disconnects and to allow for quickly forming adaptive teams who can create value together even under uncertainty, members of the team require relational intelligence to navigate their agreements with each other.

For this, they require authenticity and the psychological safety to bring about the necessary clarity to make good agreements in the first place, and to provide each other with feedback from a place of care when those agreements are broken. When we start with people and teach them to optimize the relationships between them toward pulling out collective genius, then we can harvest that genius to serve our customer in ever-new ways.

Focus on Real Value

From Corporate Bureaucracy to Customer Value Creation Assisted by AI

“The purpose of business is to create and keep a customer,” as Peter Drucker is often quoted. It is so obvious and yet so easy to forget again and again. It is easy to get lost in operational realities, in financial optimization, in balance sheet games, and in serving shareholders. What matters in the end, though, is the customer. Without that relationship with the customer, there is no business.

With constantly changing customer demands comes the need to continuously innovate.

Innovation and design thinking are about caring and feeling real empathy for your customers, not the tools and canvases.

AI is already providing astonishing tools for collaborative innovation, and if you learn how to relate to the AI, you can create magnificent products. But if you can’t look your customer in the eye and feel their pain, attune to the actual moment, and focus on what really matters, those tools are worthless.

Bringing an idea all the way to market requires deep support and resources, commitment from across the organization, and operations that can adapt to emerging needs.

Dynamic Operations

From Efficient Organization to Fluid, Adaptable, and Resilient Systems

With changing market and customer dynamics come shifting strategies. Rather than typical hierarchical models, we will see more continuous adaptive structures to address them. Not that hierarchy will go away, but it will shift more dynamically based on the context.

“Organization” will become more of a dynamic cluster of processes anchored around the delivery of a value proposition. Many of these processes will be fully automated and decision-making will be distributed across all domains from strategy and culture, to branding and community building, to information systems, sales and expansion, and ultimately operations with employees responsible for decentralized strategy.

Five-year plans do not make sense in a world where every year brings new surprises. Organizations are shifting toward scenario-based distributed planning, taking into consideration that we live in a world of uncertainty. The best we can do is to be prepared for alternative futures and track where things are going while running experiments.

To implement those strategies, we need resilient cultures and actually make culture a key priority. This does not mean making the office look pretty and offering some yoga classes. It means building a relational workforce capable of shifting with the context as needed. That is why community will become more important, both internal and external to the organization. Managing the information flow between them ensures that the brand and community around it can continue to expand, all the while supporting the whole endeavor with flexible operations in a remote and hybrid world.

Dissolving into a Portfolio

From Defined Structure to a Pipeline of Business Processes in Various Stages of Development

Most operations will become virtual and many will run entirely on code. Business will fracture from a seeming whole into a series of distinct business processes, in part managed by AI through stages of maturation: from idea to exploration, from incubation to acceleration and growth, to embedding it in the existing infrastructure and business lines, to expanding from there, and ultimately sunsetting it when things have changed.

When I was a young consultant, I loved doing functional decompositions of existing processes: how is it working? Who does what when? I loved creating swim lane diagrams with those diamond-shaped decision points. They always beckoned to be automated, especially if those decisions were based on rational logic. With AI, we face continuous automation while still needing human oversight. Someone has to maintain ownership. Automated innovation processes that move ideas from first signal to ultimate sunset are great, but someone has to ensure that things don’t go awry and take ownership.

For that, we need humans who are in relationship with their outcomes. We need humans who understand that failing is learning, and walking is controlled falling. In keeping a whole alive and thriving, we get to manage a portfolio of initiatives, hedging our bets appropriately while keeping the swarm oriented on what matters: the relationships that we build with our customers and each other.

Culture as Brand

From Hiding Behind Corporate Walls and Silos to the Transparent Organization

Culture is an ephemeral term that has many definitions. I always liked “how we do things around here,” as culture to me seems to be an emergent phenomenon of how each participant within it shows up for themselves and in relation to each other. In the past, culture was rarely talked about, and if it was, it was mostly made fun of or complained about. Then came the “startup” culture wave, the pandemic awakening, and finally the idea that culture matters is beginning to sink in.

Culture is what happens in our everyday as we collaborate to create value for our customers, and what happens when they use our creation.

In a transparent world, that culture directly translates into the organization’s brand.

Employee and customer stories already make up more of the volume of content than any marketing could ever catch up to. “Word of mouth” means something different in a hyper-connected world where everyone has a proverbial megaphone. Our relationships, whether internal or external, will define who we are and the wealth we are capable of producing.

What We Leave Behind

In the end, it’s about what we leave behind. The promises and brand promises, the agreements we made with ourselves and others, and how we showed up for them. That is wealth. That is our legacy. But we still have a ways to go in adapting to these new ways of being and these new ways of organizing ourselves.

At LUMAN, we have been supporting various size organizations from growth stages to global enterprises in seeding this future of organizing, and I will report more on successful tactics in my next installment.

For now, get curious about new ways of organizing. Here is just one collection of handbooks on decentralized organizing, and remember, as my colleague Margaret Wheatley wrote,

“There is no power for change greater than a community discovering what it cares about.”

More about how you can transform your workforce and yourself in the coming installments:

• Part 1 — The Relational Workforce in an Age of Transformation and AI — How need to activate relational intelligence and authenticity in order to relate productively and collaboratively create value
• Part 2 — The Future of Organizing — Characteristics of new organizations — purpose driven and with a new Cultural Operating System focused on relationships and value creation
• Part 3 — How to shift your cultural operating system — how you can use your innovators and early adopters to build internal capacity and cross the chasm to “a new normal”
• Part 4 — Learning cycles of the individual — the leadership development and resilience required for those willing to use the liminal space of transformation in order to actively create the future

Are you curious about the future? Already actively creating it? Want to learn more about transformation or share with me how you are mastering it? Please connect and reach out on LinkedIn, my website or if you are leading transformation at your company and can use some support via LUMAN.