Adaptability rarely comes quickly when one size has to fit all.
Mark Davies is managing director of Link Mortgage Services
In days gone by you might have heard a number of management consultants espouse the notion that you need a hierarchy to succeed.
At face value it’s a perfectly valid point in a large complex world where volatile markets, changing situations, client demands, regulatory oversight and operational challenges, such as working from home, make demands of individuals and businesses that appear overwhelming in their complexity.
However, large hierarchies often fail because they institutionalise thinking and behaviour. Adaptability rarely comes quickly when one size has to fit all.
The challenge for many large organisations is understanding why and how more devolved authority structures and cultures will work well for them. In a stable world, hierarchies (which are part of the infrastructure of that stability) serve a useful purpose.
When innovation and turbulence collide, they do not react well.
From the Gutenberg press in the Reformation to the internet and Green activism, technology disrupts hierarchies and sets new challenges for their leaders.
In volatile times, events at the coal face inform business decisions.
Devolved leadership works very effectively because it enables organisations to react quickly and accurately to events on the ground.
In disruptive moments, when decisions need to be made immediately for success or survival, trusting good people at the coal face and giving them the necessary support and trust trumps a one size fits all approach.
There are, of course, times and places for more strategic helicopter views but when events are not of our own making, understanding their impact and adapting and managing accordingly is something that is managed better in the midst of the action.
Firms organized around small, autonomous teams at a local level are much more fleet of foot when a business has to innovate. In the current lending environment, the pandemic is a case in point.
Recruiting and training staff to assist in the payment deferral processes is imperative but is not a response that can be easily delivered and managed from afar.
The regulator agrees as much. In its recent guidance it said, ‘Executive committees and the Board are responsible for ensuring the functions that provide customer support in line with this guidance are appropriately resourced and demonstrate a supportive, customer-focused culture.’
The pandemic is changing many things about our working lives but there are sound business reasons for giving people autonomy, and for organizing among small teams rather than large hierarchies.
We are at the precipice of a new way of working, older models will have to adapt to survive.