In this Section – we have few important goals. First, we would like to help you with foundations and clarifying the terminology – that’s why, we are going to explain each configuration in details: Simple structure or Personal Enterprise, Machine Bureaucracy or Programmed machine, Professional Assembly or Professional Bureaucracy, Adhocracy or Project-based organization, and Super-structure or Divisional organization. We will describe each, explain when to use it, and the challenges each configuration is facing. Second, you will start recognizing distinctions between the configurations in terms of how to do Strategy, apply your Leadership skills, what your employees might expect from you and the company, and similar – all this as only at a glance, building expectations for the upcoming Sections.

Next, we are going to talk a bit about current trends in terms of “Uberization” of economy and raising influence of a GIG culture – we expect these trends not just to stay, but even to strengthen, requiring from all configurations to further adjust, most likely by “borrowing” some elements from an “Adhocracy” in order to increase the Agile capabilities.

Finally, since we are talking about organizational structuring, we are going to open this Section with some basic elements like Division of labor, Departmentalization, Authority, Coordination mechanisms and Informal organizational structure. If you are already familiar with those, you can skip this lesson.

Mastering Organizational Structuring: Fundamentals offers a comprehensive exploration of the fundamental principles underlying effective organizational design. Delve into the intricacies of division of labor, departmentalization, authority, and coordination, as you uncover the key components that shape the structure of modern organizations. From defining individual roles to delegating decision-making authority, gain insights into the delicate balance required to achieve optimal organizational performance. Explore common coordination mechanisms, from mutual adjustments to standardized approaches, and understand how each mechanism influences corporate culture, leadership style, and decision-making practices. Additionally, discover the importance of informal organizational structures and learn how to identify central nodes, knowledge brokers, and peripherals within your organization. Whether you're an entrepreneur, business leader, or new manager, this course provides invaluable insights into the critical role of organizational design in driving success. Join us on a journey of discovery as we unravel the complexities of organizational structuring and empower you to navigate the ever-changing landscape of modern business with confidence and clarity

Mastering the Personal Enterprise: Unveiling the Simple Structure offers a detailed exploration of the foundational organizational structure commonly found in small family businesses and entrepreneurial ventures. Discover the key characteristics of the simple structure, including its loose division of labor, minimal hierarchy, and reliance on direct supervision. Gain insights into when and how to effectively utilize this structure type, from the early stages of company development to dynamic environments requiring agile decision-making. Explore the potential benefits and challenges associated with the simple structure, from its ability to foster agility and innovation to the risks of centralization and dependence on a single leader. Whether you're a small business owner, aspiring entrepreneur, or organizational leader, this course provides invaluable insights into harnessing the power of the simple structure to drive success and growth. Join us on a journey of discovery as we unlock the secrets of the personal enterprise and empower you to navigate the complexities of organizational structuring with confidence and clarity.

Diving into the Programmed Machine: Exploring the Machine Bureaucracy delves into the intricacies of one of the most prevalent organizational structures found in large corporations and manufacturing firms worldwide. Gain a comprehensive understanding of the key components and characteristics of the machine bureaucracy, from its emphasis on standardization and hierarchy to its reliance on control mechanisms and formalization. Explore the roles of each organizational cluster, including the dominant operating core, crucial mid-line managers, and supporting techno-structure. Understand the strategic apex's role in driving efficiency and performance improvements while grappling with challenges such as mechanization, stifled entrepreneurial spirit, and power struggles. Discover when and how to effectively implement the machine bureaucracy structure, from stable environments to matured companies seeking operational excellence. Join us as we unravel the complexities of the programmed machine and empower you to navigate its challenges and opportunities with confidence and clarity.

Unlocking the Professional Assembly: Navigating the Professional Bureaucracy invites you to explore the intricate dynamics of organizational structuring tailored to highly skilled professionals. Delve into the essence of the professional bureaucracy, a structure designed to cater to the complexities of markets demanding specialized expertise and personalized service. Discover how the focus shifts from centralized control to empowering the operating core, comprised of seasoned professionals adept at addressing intricate client needs.

Explore the core components of the professional bureaucracy, including the dominant operating core, strategically aligned mid-line managers, and the supporting techno-structure. Gain insights into the delicate balance between expertise and authority, where professionals wield power through their specialized knowledge and skills. Understand the role of mutual adjustments as a primary coordination mechanism, fostering collaboration and adaptability among teams.

Uncover the nuances of strategic apex involvement in a professional bureaucracy, where administrators support rather than dictate operations. Examine the challenges inherent in this organizational model, from fostering loyalty to expertise over company allegiance to navigating coordination issues and fostering innovation.

Join us as we unravel the complexities of the professional assembly, empowering you to leverage its strengths and overcome its challenges in pursuit of organizational excellence and client satisfaction.

Discover the Divisional Structure: A Strategic Approach to Market Segmentation

Explore the divisional structure, a dynamic organizational model tailored to diverse markets and products. Learn how mid-line managers lead autonomous units, driving agility while maintaining strategic oversight.

Uncover how divisions are strategically crafted to serve specific markets, empowering leaders to tailor strategies to meet local needs. Understand the role of the strategic apex in steering performance and aligning objectives.

Examine factors driving adoption, from market diversity to internal dynamics. Navigate challenges, including headquarters' role and balancing performance metrics with broader social impact.

Join us to unlock the potential of the divisional structure for organizational success

Adhocracy (Project-based structure) is designed for complex, dynamic environments where innovation is crucial. It organizes experts around ad-hoc projects, like creative agencies or film studios. The structure is fluid, changing frequently to fit diverse projects. Teams are often temporary, with permanent support staff and flexible expert roles. Power is delegated to project teams, promoting innovation and adaptability. It's suitable for environments requiring frequent product changes and innovation. Challenges include human reactions to uncertainty and balancing flexibility with efficiency.

The "Uberization" of the economy and the rise of the Gig culture refer to the trend of leveraging technology to connect freelancers with clients, similar to how Uber connects drivers with passengers. This model has expanded to various industries, such as Airbnb for hospitality and Udemy for education. The Gig culture emphasizes short-term, project-based engagements, facilitated by platforms like Fiverr and Toptal. These platforms offer a wide range of services, attracting both small businesses and larger contractors. The shift towards freelancing has evolved from simple tasks to complex professional services, with platforms now offering top-tier experts. This trend is reshaping traditional employment models, emphasizing service-as-a-product, equal partnerships, and results-based incentives. It also allows for remote work and global collaboration, offering fulfillment over stability. The rise of the Gig culture, fueled by technology and the COVID-19 pandemic, is expected to impact the future of work and organizational design, with elements of adhocracy becoming increasingly relevant.

Here, we are going to deeply explore different configurations from the perspective of Strategy. And, you should be aware of two things: strategy content and strategy approach.

Strategy content is about what you are going to do and how – and many books are written about that. Yet, how someone should approach his strategy in a given context is not that common. Either strategy should be a deliberate choice or emerging through experimentations and pilot projects; or should you separate strategy formation from the implementation and when; or is strategy a challenge characteristic only for those at the top, or more collectivistic approach should be applied – all those and many other nuances can be studied the best – only through understanding different organizational configurations, and their drivers.

That’s why, we are not going to explore strategy content in details, but to go straight to individual configurations, explaining their key challenges, core approaches, and implications on the structure.

And, if you need more groundwork about Strategy itself – we recommend you to look at the Resources section where you can find an e-book from our, another course, focused on this attractive topic.

Strategy within a Simple structure revolves around entrepreneurship, vision, and adaptability to market challenges. The key challenges include creating a market fit for the product, scaling the business, and expanding into new markets or products. Entrepreneurial vision guides strategy, supported by Design Thinking for product development and Blitz-scaling for growth. As the business scales, standardization becomes important for efficiency and predictability. The entrepreneur centralizes power and drives decision-making, embracing risk and rapid growth. Over time, the focus shifts to establishing structure and systems to exceed the founder's limits, learning from other organizational typologies for continued success.

In a Machine Bureaucracy, strategy is driven by efficiency and optimization within a stable market environment. The focus shifts from innovation to improving profitability through standardized processes and procedures. Key challenges include pursuing external and internal excellence, adjusting offers as needed, and achieving operational efficiency. The core approach involves deliberate strategy formation led by a strategist (typically the CEO), with technocrats responsible for strategy formulation and implementation oversight. Implementers execute the strategy under technocratic control, using tools like Porter's 5 Forces, PESTEL analysis, and financial modeling for planning and profitability estimation. The structure emphasizes formalized and programmed analytical thinking, prioritizing implementation and operational control over creativity and innovation. While successful in maintaining stability and efficiency, this approach may struggle to adapt to market disruptors and can stifle entrepreneurial spirit in favor of rules and procedures.

In a Professional Bureaucracy, the strategy is heavily influenced by the expertise and relationships within the operating core of the company. New projects often arise from client relationships and external factors, such as industry discoveries or talent acquisition, significantly impact strategy. The Strategic apex plays a role in recognizing market trends and bringing in reputable experts to open new markets or introduce new services, as well as developing a culture that values expertise and promotes the company's values. Key challenges include the granular nature of strategy, as it relies on individual initiatives rather than a holistic, deliberate choice. Strategy creation is more of an emerging process, driven by collective measures undertaken by experts throughout the company who negotiate priorities and workforce allocation. Expert power, not position, is central to these companies, and mission and culture play significant roles in shaping strategy. As a result, the strategy must serve the specific needs of individual experts rather than solely focusing on profitability targets.

In a Divisional structure, the Strategic apex manages the company as a portfolio, while the Middle line managers lead individual divisions, daughter companies, or profit centers. Corporate strategy focuses on determining the businesses the company operates in, while Business strategy concentrates on how to compete in the market. Key challenges include effectively managing the portfolio of divisions, each at different stages of development, and ensuring competitiveness in the market. The core approach involves utilizing tools like the BCG matrix to categorize divisions and tailor strategies accordingly. "Cash cows" provide stable financing, "Stars" require investment for growth, "Question marks" need support and improvement efforts, and "Dogs" may be divested. Performance measurement is crucial, with managers fighting for autonomy and acting as CEOs of their divisions. At the Strategic apex, administrators and technocrats focus on control and analytical thinking, while Middle line managers strive for autonomy by developing structures that allow them to produce necessary reports and plans internally. This approach may lead to inefficiencies but allows for custom-made strategies tailored to each division's market.

In an Adhocracy structure, the organization is project-based, and strategies emerge from recognizing successful solutions rather than imposing desired ones. Companies in this structure constantly adjust to dynamic environments and rely on experimentation and learning. Key challenges include navigating ambiguity and learning from experimentation while maintaining a strong vision. Strategies may be perceived as non-existent, lost, or wrong, requiring effective management to facilitate learning and prioritize initiatives. Adhocracy teaches companies to react in the absence of centralized authority and focus on learning processes in novel situations. The core approach involves experimentation, learning from projects, and adapting strategies based on what works best. Design Thinking techniques can be useful in leading project teams and finding innovative solutions. Implications on the structure include the need for liaison roles between Strategic apex and Middle line managers, who must negotiate and persuade others. Ad-hoc task-related working groups are common, requiring collaboration across different fields and creating a matrix structure within the organization.

If you are not coming from SEE, most likely you have never heard of Mr. Miroslav Mišković, probably the most prominent Serbian business tycoon, who created one of the largest business empires within the Balkan region – Delta. Since he is a bit older gentleman now, he spends his time sharing with public his own thoughts on business, and one story about building systems is very colorful that we decided to share it with you. It goes as the following:

“One day, I was sitting at my office, and have noticed that all my closest associates were so busy, totally immersed and occupied with business, rushing from one meeting to another, people waiting for them to ask for something, and similar. And, I was sitting aside, not relevant to any one of them! Honestly, at first, I felt jealous a bit. So, I started thinking – what’s going on here?

And, this is the moment when each business owner has to realize that if you want to create a sound team and future leaders of the company, you have to create a system first! Delta is no longer Mišković deciding for everything and for everyone, it’s a system, and that system runs the company and makes decisions.”

This Section is all about this – creating systems that run the company – we will talk about when it is suitable, and when it is not. And, how to actually achieve that! We will walk you throughout specifics of each configuration by discussing traditional managerial systems like long-term planning, budgeting, performance-targeting system, incentive, decision-making, and indoctrination systems.

After all, we will share our own thoughts and some research papers about expected influence of AI and similar technological breakthroughs on managerial systems.

Large organizations rely on various systems to improve decision-making, control, and strategy implementation. These systems can be categorized into three groups: management systems, core systems, and support systems.

1. Management Systems: These are essential for leading the company and include planning, budgeting, performance targeting, indoctrination, and decision-making systems.

   • Long-term Formal Planning System: Focuses on long-term goal setting and action planning, aiding CEOs in refining their strategy and distributing it effectively.

   • Budgeting System: For short-term planning and resource allocation, ensuring better assessment of results and cash flow distribution.

   • Performance Targeting System: Sets operational and financial targets (KPIs) to enhance efficiency, often using benchmarking for comparative analysis.

   • Incentives System: Aligns individual managerial goals with organizational objectives, often based on financial rewards or stock options.

   • Decision Making System: Defines rules and structures for decision-making processes, managing risk exposure and control.

2. Core Systems: These are crucial for operational aspects such as design, manufacturing, marketing, delivery, and procurement. They focus on quality, productivity, speed, cost, and customer satisfaction.

3. Support Systems: These systems support daily activities and include HR, IT, payments, finance, and accounting systems.

The process analysis is essential for understanding these systems and identifying areas for improvement. However, this discussion primarily focuses on management systems and tools commonly used from a managerial perspective, emphasizing how and when to apply them effectively. These tools include long-term formal planning, budgeting, performance targeting, incentives, decision-making, and indoctrination systems. Each system plays a vital role in enhancing leadership decision-making, control, and strategy implementation within organizations.

In a Simple structure, typical of small companies or Personal Enterprises, managerial systems are rudimentary as most activities are directly managed by the Entrepreneur. However, external pressures such as fundraising or expansion may necessitate the development of basic systems.

For instance, while an oral strategy may suffice internally, external stakeholders like bankers or venture capitalists may require formalized documents like a Business Plan or financial forecasts. As the organization grows, internal chaos prompts the emergence of functional groupings and basic forecasting and tracking tools.

Complex tasks often rely on external consultants or freelancers due to the lack of permanent specialized staff. Platforms like Fiverr or Toptal facilitate easy access to such expertise. Nonetheless, a deeper understanding of managerial systems often requires exposure to more complex organizations.

In a Machine Bureaucracy, characterized by a large number of employees and dispersed locations, indirect control through rules, procedures, and quantitative performance measurements is essential.

Long-term planning may be less crucial compared to budgeting and scheduling activities for strategically important projects, emphasizing efficiency and stable growth rates. Performance targeting systems, incentivizing operational efficiency through benchmarking and KPIs, play a significant role.

Decision-making authority rests with the Strategic apex, with a formal hierarchy dictating communication channels. Indoctrination systems focus on training employees with basic skills, emphasizing standardized behavior and adherence to priorities, rules, and procedures to maintain operational efficiency.

Machine Bureaucracies prioritize efficiency and standardized behavior, sometimes at the expense of basic human respect, particularly in less developed communities.

In a Professional Bureaucracy, characterized by expert employees dealing with non-standardized tasks, long-term planning focuses on managing what is under direct control rather than predicting future outcomes. Emphasis is placed on key projects, strategically important clients, and optimizing budgeting and scheduling activities.

Performance targeting and incentive systems play a crucial role in motivating experts to increase sales and control expenses, often requiring negotiations and securing buy-in from employees. Decision-making processes are less top-down and more collaborative, with lateral adjustments and initiative facilitation.

The indoctrination system is vital in cultivating a workforce of experts with standardized knowledge and character traits, fostering a sense of belongingness and promoting the organization's values and culture. This approach enables experts to confidently handle complex tasks and represent the company effectively to clients.

In a Divisional structure, managing a portfolio of units requires sophisticated managerial systems, particularly in financial control. Long-term planning is critical, evaluating and comparing business strategies within divisions based on return on investments. Financial modeling aids in strategy quantification and the creation of system-wide plans.

Performance targeting systems set objectives for each division, aligned with budgets, schedules, and incentive systems for mid-level managers. Decision-making systems standardize how important decisions are made within divisions, providing guidelines for mid-line managers.

An indoctrination system emphasizes creating value for shareholders, aligning with Milton Friedman's philosophy. Mid-line managers are motivated to achieve targets set by Strategic apex, enjoying autonomy in pursuing goals while being indirectly controlled to ensure alignment with company objectives.

In an Adhocracy, characterized by dynamic and complex environments, deep, long-term planning is challenging. Instead, focus is on project-based management, with detailed scopes, budgets, and schedules developed for each endeavor. Resource utilization is optimized across projects, with attention to revenue increase, cost optimization, and people management.

Motivation is fostered through performance targeting and incentive systems, with KPIs tailored to core operations and benchmarks. The Indoctrination system emphasizes deeper appeals, such as creating art or landmarks or something similar depending on the industry, in order to drive employee devotion and performance.

Decision-making is participative, seeking consensus and buy-in through negotiations, reflecting the diverse backgrounds of individuals involved. These themes are revisited throughout subsequent sections.

The rise of AI and other technological trends is reshaping organizational challenges across industries. From finance to logistics, HR to marketing, AI is automating tasks at an unprecedented rate. For instance, in finance, 90% of descriptive and diagnostic analytics are predicted to be fully automated by 2027. In logistics, robots are increasingly handling sorting and loading tasks, while AI manages demand forecasts and inventory planning.

Virtual Reality (VR), Augmented Reality (AR), and the Metaverse concept are also revolutionizing work. They enhance remote collaboration, simulate work processes and products for engineers, revolutionize retail experiences, and even offer training for surgeons.

Speculation abounds about the future, including the possibility of remote truck driving via VR or AI-controlled vehicles. These trends are not just buzz; they are reshaping how we live and work, with implications that will endure.

Here, we are planning to walk you through few interesting topics:

- To explain different leadership styles in general;

- To present how leaders operate within different configurations; and

- To deal with a challenges caused by Remote and Hybrid work.

Regarding the topic how leaders operate within different configurations, we are going to explain what is their core focus, which coordination mechanisms dominates and why, what is the most common communication approach they use, how they earn their own authority, and what would be some core challenges they are all facing.

I hope you are going to enjoy!

This lesson delves into the diverse spectrum of leadership styles, drawing parallels to characters from the iconic Star Wars series. Just as Sith Lord Sidious urges young Anakin Skywalker to explore all aspects of the Force, leaders are encouraged to embrace various styles to exert influence effectively. The lesson outlines different leadership styles:

1. Transformational Leaders: These individuals inspire change by articulating a compelling vision and mission, rallying others around shared values, and fostering commitment to organizational goals. Unlike transactional leaders, they focus on intangible motivators rather than simple exchanges of rewards for performance.

2. Charismatic Leaders: Similar to transformational leaders, charismatic leaders ignite passion and commitment among followers. However, they also cultivate personal admiration and loyalty, generating positive emotions and a sense of connection with their followers.

3. Coalitional Leaders: This style emphasizes leveraging power dynamics within and outside the organization to achieve goals. Leaders form alliances with various stakeholders, negotiate agreements, and navigate political landscapes to drive change effectively.

4. Machiavellian Leaders: Unlike the positive aura of charismatic leaders, Machiavellian leaders prioritize personal power and influence, employing tactics like fear, deception, and manipulation to maintain control and achieve objectives.

5. Complementary Leaders: Recognizing that no single style fits all situations, complementary leaders adapt their approach based on context, blending different styles or gravitating toward one as needed.

The lesson underscores the importance of understanding stakeholder dynamics and power structures in choosing the most effective leadership style, akin to navigating the diverse challenges faced by leaders in real-world scenarios.

In this lesson, we explore leadership styles within the context of a simple organizational structure, characterized by agility, direct supervision, and informal communication channels.

Leadership Focus: The primary focus is on fulfilling the company's vision and mission, navigating disturbances and fostering innovation to ensure survival and progress.

Coordination: Direct supervision is the main coordination mechanism, where one person takes responsibility for guiding and controlling the work of others. This approach enhances work efficiency in organizations with relatively simple tasks and few hierarchical levels.

Communication: Informality characterizes communication channels, fostering a supportive atmosphere where team members readily assist each other. The leader plays a crucial role in resolving interpersonal issues.

Authority: Authority is earned based on the leader's ability to establish the company, solve problems, and prove the viability of their vision in the market. Respect and judgment stem from the leader's achievements.

Key Challenges: In the early stages, leaders face challenges such as shaping their vision, gaining trust, handling risks, and managing various aspects of the business single-handedly. As the company grows, challenges shift to sustaining growth, maintaining profitability, and transitioning from a sole decision-maker to establishing organizational infrastructure. This transition may necessitate a change in leadership style or leadership itself to meet evolving business needs.

In the context of a Machine Bureaucracy, the leadership style is characterized by a focus on operational excellence and the implementation of rules, procedures, and systems to transform the organization into a well-oiled machine.

Leadership Focus: The primary emphasis is on exploiting existing ideas, market positions, and resources to achieve operational efficiency and improve the mechanics of how the system functions.

Coordination: Standardizing work processes and pushing employees toward achieving set targets are paramount. Techno-structure plays a crucial role in programming employees and standardizing responsibilities, qualifications, and communication channels.

Communication: Communication is formal and impersonal, following a formal chain of command. Mid-line managers are responsible for directly supervising the operating core and addressing disturbances to ensure smooth workflow.

Authority: Authority is based on formal positions, typically earned through years of service. Leadership positions are often filled by experienced engineers, with support from elite members of the techno-structure, such as those from finance and control.

Key Challenges: The focus on operational excellence may lead to a decline in creativity, with new products often being modifications of existing ones rather than genuine innovations. This can result in a shift towards a control-oriented mindset, relying heavily on metrics such as ROCE and market share rather than market signals. The departure of individuals with strong entrepreneurial spirit and agile approaches may further exacerbate these challenges. Market disruptions may necessitate a radical turnaround, requiring a shift in leadership style, organizational culture, and structure.

In the context of a Professional Bureaucracy, the leadership style differs significantly from that of a Machine Bureaucracy due to the nature of the work and the expertise required.

Leadership Focus: Operational excellence is still a priority, but the focus shifts towards fostering a culture of excellence within the domain of expertise. Leaders serve as role models and focus on coaching and mentoring to help individuals become the best versions of themselves in their respective fields.

Coordination: Standardization of skills is the primary coordination tool, as complex issues require highly trained individuals or teams to address them. Decentralization is enabled through this standardization, allowing experts the freedom to apply their skills autonomously.

Communication: Communication is formal and impersonal, but there is a strong emphasis on respect and professionalism, especially when dealing with clients and sensitive information. Negotiation and mutual adjustments are common due to the reliance on scarce expertise, leading to occasional politics within the organization.

Authority: Authority is earned based on expertise, and individuals are continually honing their skills through direct exposure to clients and lifelong education. Many experts prioritize staying active and loyal to their practice rather than pursuing formal leadership positions.

Key Challenges: Similar to Machine Bureaucracy, Professional Bureaucracy may struggle with internal innovation. Instead, it relies heavily on external sources of innovation and continual education from relevant authorities to stay current in the field.

In the context of a Divisional Structure, leadership dynamics differ significantly from bureaucratic organizations. Here's a breakdown:

Leadership Focus: Strategic apex focuses on fostering a performance-based culture, scalability, and portfolio management, while Mid-line managers manage individual divisions and must adhere to these standards while also implementing their own strategies within their units.

Coordination: Standardization of outputs is the primary coordination mechanism, with quantitative targets such as ROCE, market share, and budgets serving as benchmarks. Mutual adjustments and standardization of work processes are not feasible due to low interdependence between divisions and the need for divisional autonomy.

Communication: Formal conversations are limited, with a preference for direct and personalized communication between Strategic apex and Mid-line managers. Both parties seek informal communication to build deeper bonds, trust, and mutual respect.

Authority: Strategic apex derives authority from position and coaching ability, while Mid-line managers derive authority from their ability to meet targets and effectively manage their divisions.

Key Challenges: Challenges include the fear of inefficiency due to performance control by analysts who are not deeply involved in operations, leading to duplication of resources or activities by Mid-line managers to prepare for challenges and maintain autonomy. Power struggles between Strategic apex and Mid-line managers often arise, with one pushing for efficiency and the other defending autonomy.

In an Adhocracy, leadership is agile and focused on facilitating innovation and adaptation within project-based organizations. Here's a breakdown:

Leadership Focus: The primary focus is on fulfilling the mission of projects, emphasizing creation and innovation over traditional performance measures. The leader prioritizes the physical realization of the project's goals, with financial metrics being secondary to the purpose outcome.

Coordination: Mutual adjustments serve as the key coordination mechanism, requiring individuals to collaborate, communicate, and adapt to overcome novel situations and pursue innovations. Egos are set aside in favor of achieving the project's objectives.

Communication: The leader must be actively involved on the ground, creating liaison devices such as working groups or task forces specialized for addressing specific project issues. Decentralization and delegation are selective, based on task requirements and the quality of individuals involved.

Authority: Authority is earned through a combination of expertise, political savvy, coaching, and negotiation skills. Leaders navigate ambiguity and leverage their character to calm situations, foster collaboration, and find mutually acceptable solutions while adhering to project constraints.

Key Challenges: The pursuit of innovation and experimentation can lead to inefficiency, making it a temporary configuration for companies until they achieve breakthroughs or solve critical issues. Project management methodologies are relied upon to refine budgets, project scopes, and schedules amidst the drive for exploration and innovation.

In this lesson, we are going to focus on the following:

Challenges:

1. Supervision: Remote work reduces direct oversight, requiring leaders to find alternative coordination methods.

2. Team Dynamics: Isolated remote workers may struggle with team cohesion and communication, demanding innovative leadership approaches.

3. Training: Remote onboarding and skill development present challenges, necessitating creative solutions for effective training.

4. Inequality: Disparities between remote and on-site workers can arise, requiring leaders to address fairness and inclusion.

Benefits:

1. Talent Access: Remote work expands the talent pool, enabling organizations to tap into diverse skill sets from around the world.

2. Boundary Flexibility: Remote setups prompt organizations to reconsider traditional boundaries, potentially reducing costs and increasing flexibility.

3. Cost Savings: Remote work reduces office space expenses, contributing to lower fixed costs and improved financial efficiency.

By proactively addressing these challenges and leveraging the opportunities presented by remote and hybrid work models, leaders can drive organizational success in the evolving workplace landscape.

Here, we would like to emphasize perspectives of employees, depending on applied organizational configuration and the clusters they belong to. That’s why, we are going to start with a “followership” concept, as another side of the same coin to the previous leadership topic.

After that, we will explore individual configurations emphasizing what drives individual employees, and what should be strong and weak points of each configuration.

Finally, we would like to explore current trends in more details regarding “the Big Resignation” movement – what are the key drives, and how companies can fight back.

This lesson explores the often-overlooked aspect of leadership: followership. It emphasizes the importance of understanding why and how employees decide to follow a leader and contribute to serving a mission. Key points include:

• Followers are essential to organizational success, as they get the job done, work in the best interest of the company's mission, challenge leaders, support leaders, and learn from them.

• Different typologies of followers exist, such as Kelley's and Chaleff's, which categorize followers based on motivation, support, and challenge they provide to leaders.

• The lesson highlights the need for leaders to recognize and appreciate the role of followership in organizational dynamics, and it provides resources for further exploration, such as a TEDTalk on "the art of followership."

Understanding followership is crucial for leaders to foster a collaborative and supportive environment within their organizations.

This lesson explores the dynamics of staff within organizations that operate under a Simple structure, often found in startups and small companies. Key points include:

• Employees in Simple structures are typically generalists, adaptable to various tasks and needs of the company.

• Their motivation stems from loyalty to the leader's vision, a sense of community, and the diversity of their job duties.

• Strong points include high adaptability, willingness to cover for colleagues, and a sense of ownership in the co-creation process.

• Weak points may include dependence on an emerging leader, intense workloads, potential for chaos in the absence of a formal system, and lower pay.

Understanding the dynamics and motivations of staff in Simple structures is crucial for leaders to effectively manage and support their teams in these environments.

This lesson delves into the dynamics of staff within organizations operating under a Machine Bureaucracy structure. Key points include:

• Employees in the Operating core typically perform repetitive tasks for modest salaries, leading to a lack of self-driven motivation.

• The Techno-structure and Mid-line management may exhibit a "silo effect," with distinct clusters of employees focused on their own responsibilities.

• Different clusters of employees are driven by various factors, such as fulfilling basic needs for those in the Operating core, maintaining order for the Techno-structure, and seeking power for Mid-line management.

• Strong points include efficiency and organizational goal fulfillment, while weak points include dissatisfaction among certain employee groups, high turnover rates for boring jobs, and potential polarization due to remote work practices.

• Strategies to address weak points may include enriching or enlarging jobs, automation, and managing the impact of remote work practices on different employee groups.

Understanding the dynamics and motivations of staff within Machine Bureaucracy structures is essential for leaders to effectively manage employee satisfaction and productivity within these environments.

This lesson discusses the characteristics of staff within organizations operating under a Professional Bureaucracy structure:

• Employees are well-educated experts in their fields, often serving clients with complex issues.

• Mid-line managers, recruited from the Operating core, may exhibit competition and political behavior, while other employees may feel less relevant, similar to Machine bureaucracy structures.

• Staff in Professional bureaucracies are driven by a sense of serving others, social contribution, status, and respect earned through expertise.

• Strong points include efficiency in organizing large numbers of employees, driven by intrinsic motivation for continual improvement and professional accomplishment.

• Weak points include the potential for homogeneity among employees, standardization of knowledge reducing creative potential and innovation.

Understanding the unique motivations and dynamics of staff within Professional Bureaucracy structures is crucial for leaders to effectively leverage their expertise and maintain high levels of performance and satisfaction.

This lesson explores the characteristics of staff within organizations operating under a Divisional structure:

• Divisional structures, common in large companies, often feature numerous hierarchical levels and significant power struggles and politics.

• The Strategic apex aims to establish a performance-based culture with clear measurement systems, but values like social responsibility may be lacking.

• Employees are often driven by internal competition, seeking status and power within the organization. The focus is on demonstrating superiority in managing business arms, launching profitable initiatives, and climbing the hierarchy.

• Properly managed, this drive for success can be beneficial for the company, fostering innovation and adaptation.

• However, such environments may become unhealthy, leading to dissatisfaction among employees and contributing to movements like the "Great Resignation."

Understanding the motivations and dynamics of staff within Divisional structures is crucial for leaders to navigate the complexities of internal competition and power dynamics while fostering a healthy and productive work environment.

This lesson discusses the characteristics of staff within Adhocracy organizations:

• Adhocracy is a fluid organization focused on individual projects, where employees may move between projects based on current needs.

• Operating core employees may experience a sense of engagement and bond with projects and leaders that resonate with them.

• Support staff play a crucial role in enabling multi-project companies and often have a longer-term perspective on the organization.

• Employees in Adhocracy organizations, resembling freelancers or consultants, seek exciting projects and enjoy the freedom to choose their work.

• Strong points include flexibility for both the company and employees, with the ability to select projects and roles.

• Weak points may include risks for employees who rely on project-based work for stability and the potential for stress from long hours and constant change. Understanding the dynamics and motivations of staff within Adhocracy organizations is essential for both leaders and employees navigating the unique challenges and opportunities of this operating model.

This lesson discusses "The Big Resignation" challenge in response to the Covid-19 pandemic and examines the shift in employee perceptions and values. It explores the old-world realms of employer-centeredness, career-centeredness, clear hierarchy, location and time-bound work, and paycheck-to-paycheck mentality. Conversely, it delves into the new-world dreams of solopreneur-centeredness, fulfillment-centeredness, equality, location and time independence, and multiple income streams. The enabling infrastructure includes online platforms, remote work, co-working spaces, and self-education. Organizational responses include adapting business models, rebalancing power dynamics, and considering the possibility of employees returning. Understanding these dynamics is crucial for organizations seeking to navigate and address the challenges posed by the changing landscape of work and employee expectations.

I don’t know how much you are familiar with a work of Frederic Taylor and the complementary phrases like “Taylorism” and “Fordism” that shaped management practice for the entire 20th century – analyzing and chunking operations that simple, plain workers can do (initially demanding jobs) more efficiently than experts. After all, that’s how Henry Ford revolutionized automobile industry – instead of relying on expensive top-notch experts building entire car – he pursued the way where a simple worker is specialized for a single fraction of a job – either dealing with the front left wheels day after day, or specializing for something else along an assembly line.

Well, it seems that time has gone for vast majority of people – AI, Remote jobs, Marketplaces, and other technology-driven innovations force us all to reshape not just the basic skills, but the entire approach how we work. Basically, we are all getting a bit – entrepreneurs, allowing the company we work for to be more agile, to adapt faster to market changes, and innovate better.

Since this Section is all about skills, and where technology plays an increasing role – here, we are going to try to be a bit predictive in terms how the companies and employees will both adjust to the requirements of the “Future of work”. And, the point is not to give you “ready-made” answers per se, but to trigger your thinking and help you find your own answers.

This lesson explores the relationship between skills, technology, and the need for organizational agility. It highlights how the design of individual job positions can impact the rigidity or agility of an organization. Two key dimensions, variety and work analyzability, are discussed as guiding factors for organizational design. The Perrow's matrix, which categorizes tasks into routine, craft, engineering, and non-routine, is introduced to illustrate different types of tasks based on variety and analyzability.

Routine tasks, characterized by low variety and structured procedures, are contrasted with craft tasks, which require high skill levels and adaptability. Engineering tasks exhibit potential variety but follow certain patterns, while non-routine tasks involve high variety and are difficult to program. The discussion emphasizes that while routine tasks may require little authority delegation, complex and diverse tasks necessitate employee empowerment and decision-making autonomy.

Two types of organizational design are compared: mechanical and organic. Mechanical design aims for predictability through centralized decision-making and strict monitoring, while organic design promotes flexibility and empowers employees to solve problems autonomously. The lesson concludes by noting that these different organizational structures lead to distinct employee behavior, required leadership styles, and strategic responses.

This lesson discusses the skills required and the training programs typically found in organizations utilizing a Simple structure. This type of configuration relies on generalists who can perform various tasks within the company, often due to its small size and inability to accommodate specialists who may not be fully utilized.

In Simple structured companies, there is generally a lower level of skill sophistication, although exceptions may exist, especially in high-tech startups. Training programs in these organizations are often informal and on-the-job, facilitated by more experienced colleagues. The lack of a clear strategic plan at the detailed level means that new skills are acquired as needed rather than through structured, proactive planning.

The lesson also highlights the impact of current market trends, such as the availability of services through platforms like Fiverr or Toptal and training programs offered on platforms like Udemy. These trends make it easier for Simple structured organizations to stay adaptable by providing access to outsourcing opportunities and skill development resources. Additionally, the possibility of larger companies outsourcing parts of their operations creates further opportunities for the emergence of new small companies in the future.

This lesson discusses skills and training in Machine Bureaucracy organizations, known for high specialization and routine tasks. Training for Operating core staff is typically in-house, while Techno-structure professionals may undergo a mix of in-house and external programs. Mid-line manager training varies. Anticipated skill gaps are expected in response to AI and the GIG culture, potentially leading to downsizing of certain roles and increased organizational agility.

This lesson discusses skills and training in Professional Bureaucracy organizations. These firms rely on expertise and non-routine activities, requiring delegated authority for on-the-spot problem-solving. Training programs focus on skills and attitudes, emphasizing self-development and adherence to industry best practices.

However, technology advancements, particularly AI and remote work trends, are impacting this structure. Remote work has become more common, challenging the traditional client-expert relationship. AI, Marketplaces, and GIG culture are providing clients with alternative options, potentially reducing the importance of established companies. In fields like medicine and education, telemedicine and online learning platforms are disrupting traditional models, raising questions about the future of brick-and-mortar institutions.

In response, professionals must adapt to remote work practices and the increasing influence of AI. Companies need to maintain client relationships amidst technological changes and evolving market dynamics.

In Divisional structures, the future of skills within individual divisions will largely depend on their unique configurations. The focus is on the Strategic apex and Mid-line, and their evolving relationship.

Technologies like big data analysis, machine learning, and AI are vital for these companies, aiding the Strategic apex in remote control and decision-making. Analytical skills are crucial for managing portfolios effectively and identifying areas for improvement.

However, true leadership and innovation lie in the hands of the Mid-line. There may be a shift in power dynamics within and between divisions, with a greater need for leaders to facilitate organizational agility and drive necessary changes.

In Adhocracy structures, driven by fluid project-based organization, there are key anticipated changes in skills and organizational dynamics:

• Overall Impact: The Gig economy's rise means more short-term contracts and project-based work, influencing other structures towards flexibility and project focus.

• Operating Core: Experts in this core must enhance core skills and entrepreneurial acumen, including leadership and negotiation, to navigate between projects and clients effectively.

• Mid-line: Managers overseeing diverse ad-hoc teams need advanced project management, leadership, and coaching skills to establish cohesive remote teams quickly.

• Support Staff: Supporting roles like headhunters and PR experts must improve project management and leadership skills to facilitate project execution effectively.

The diminishing impact of a university degree is a contentious topic, influenced by shifts in life and work. Several factors contribute to companies paying less heed to formal education:

• Talent availability: Globalization allows access to skilled professionals worldwide, prompting companies to consider retraining local talent over relying solely on overseas candidates.

• Pace of technological advancement: University education cycles often lag behind rapid technological developments, rendering some traditional education obsolete compared to on-the-job retraining.

• Job relevance: Many roles, like digital marketing, don't mandate a university degree, with platforms like Udemy offering viable alternatives for skill acquisition.

While universities remain relevant for certain fields requiring specialized knowledge and equipment, adjustments in their approach may be necessary. However, for less specialized roles, on-the-job training can be a viable alternative to formal education.

As a manager, are you going to let the culture to be develop organically, or you are going to navigate it more consciously? More managers choose the second option – yet, do we really understand the nuances needed for such delicate task?

In order to help you – we are going to present you a dynamic approach to classifying organizational culture – how it develops over time. After that, we are going to explore it in more details regarding individual configurations. Our main focus will be differences in core values between them, and common approaches how the culture is developed (or imposed) in each configuration.

I hope you are going to enjoy!

In understanding corporate culture dynamically, leaders begin by defining the mission and values, answering the question of why the organization exists. Culture is expressed through behavior and is shaped by stories that highlight key values, as exemplified by Miranda's lesson in "The Devil Wears Prada" and Simon Sinek's emphasis on leadership values in his TED talk.

Lawrence Miller's dynamic approach categorizes corporate cultures into seven types, aligned with the organization's lifecycle and leadership style: Prophet, Barbarian, Builder & Explorer, Administrator, Bureaucrat, Aristocrat, and Synergist. Each stage reflects changing focus from innovation to control, with corresponding shifts in leadership style and organizational priorities.

As a leader, understanding the evolving culture within your organization is crucial for fostering the right environment. Whether bringing order to chaos, injecting innovation into bureaucracy, or fostering renewal in decline, effective leadership starts with clarifying the "why" and promoting values that resonate with the team's ethos.

In a Simple structure or Personal Enterprise, entrepreneurial spirit and vision are paramount. These organizations prioritize survival and exploration, constantly seeking innovation and new opportunities.

Transitioning from a Prophet and Barbarian phase to a Builder and Explorer phase, core shared values evolve. Key values include:

1. Survival-driven mindset: The shared belief is centered around overcoming challenges together to ensure the company's survival.

2. Problem-solving focus: Direct, informal communication and action-oriented behaviors are common, fostering a culture of addressing challenges head-on.

3. Visionary leadership: The leader's articulated vision and mission drive the organization forward, with centralization of major decisions around their ideas.

Values emerge through trial and error, with practices that prove successful over time becoming ingrained in the company culture. Additionally, the leader's character and beliefs heavily influence the organization, with hiring practices and socialization reinforcing these values among employees.

In a Machine Bureaucracy, operational excellence becomes the guiding principle, shifting the focus from innovation to efficiency and order. Here, the emphasis is on controlling and optimizing existing operations rather than expanding into new markets.

Key shared values include:

1. Methodological approach: Operations are broken down into routine, repetitive tasks, allowing for efficient execution and easy monitoring for deviations from set standards.

2. Chain of command: Employees are expected to obey authority and follow established procedures, with operators executing tasks according to predefined protocols.

Values are imposed through:

1. Translation of best practices: Lessons learned from experience are codified into rules, procedures, and manuals, providing a structured framework for operations.

2. Socialization process: New employees undergo comprehensive training to internalize company rules, procedures, and communication norms, ensuring adherence to established protocols and maintaining order.

In a Professional Bureaucracy, where experts deal with complex tasks, core shared values differ from other organizational structures:

1. Expertise is paramount: Being an expert in one's field is highly valued, often more so than holding a managerial position.

2. Lifelong learning is essential: Continuous skill refinement is necessary to stay relevant and avoid becoming obsolete.

3. Reputation attracts quality clients: As an expert's reputation grows, they can be more selective with clients and projects.

4. Formal communication is key: Given the sensitive nature of client issues, maintaining professionalism and privacy is crucial.

Values are instilled through:

1. Strategic talent acquisition: Seeking individuals who are driven to excel and continuously improve, with the confidence to lead in challenging situations.

2. Socialization and role modeling: Newcomers learn from established experts through observation, mentorship, and participation in challenging projects.

3. Alumni club importance: Introducing newcomers to successful former employees reinforces the value of the career path and fosters a sense of possibility and achievement.

In a Divisional structure, the Strategic apex aims to control individual divisions and ensure long-term business success, emphasizing performance-driven culture:

1. Managing by results: Success is measured objectively through targets, progress reports, and budgets, emphasizing measurable impact over subjective opinions.

2. Skin-in-the-game concept: Mid-line managers are delegated significant power and responsibility, with rewards for success and consequences for failure, fostering fairness and accountability.

3. Internal competition: Emphasis on overall results drives promotion of the best-performing units, fostering an environment of "survival of the fittest" and potentially sacrificing human considerations for financial success.

Values are instilled through:

1. Selecting the right managers: Hiring managers motivated by power, money, and status ensures alignment with the competitive landscape and organizational goals.

2. Aligning performance with incentives: Remuneration systems are designed to reward individual achievements while connecting organizational performance with individual success, allowing freedom in achieving targets.

3. Promoting role models: Fairness and consistency in promoting and rewarding performers fosters a performance-driven culture, avoiding nepotism and maintaining focus on results.

In an Adhocracy, a project-based company, shaping the culture is crucial for success and fostering repeat business. Key shared values include:

1. Emphasizing impact or social contribution: Projects are driven by vision and mission, attracting team members who are passionate about making a difference.

2. Promoting collaboration and co-creation: Success relies on teamwork, emphasizing collective effort over individual expertise.

3. Adopting a mindset of project or short-term engagement: Team members understand that their roles may vary from project to project, focusing on contributing to the overall success rather than personal recognition.

4. Prioritizing evolution over immediate results: Projects often require experimentation and iteration, encouraging a focus on continuous improvement.

Values are instilled through:

1. Recruiting team-players: Hiring individuals who are not only experts in their field but also collaborative team players.

2. Socialization and team-building: Strong leadership is essential for fostering a team spirit among experts from different backgrounds, similar to how football coaches build cohesive teams.

Congratulations on completing the course: “Up the Organization: Core Leadership and Management Skills”. I really hope that you are satisfied – as promised, we have explained:

- How McKinsey’s 7S elements affect the organization and your Leadership and Managerial approach, and where you should look for the Change Management content;

- How Mintzberg’s organizational configurations drive the company, which roles each people-clusters play, and how they affect the need for change;

- I hope you now better understand how context influences the organizational design and need for changes, including the contemporary factors like AI, raising influence of a GIG culture, the Big Resignation, and similar;

- After all, we have tried to help you in navigating your change efforts by explaining the process and how to onboard your key people;

So, next step is yours – either keep exploring, or start with some tiny steps launching discussions about different change initiatives with your peers. And, if you have any questions, feel free to send me a message.

Regards,

Boris