The last few years have seen a strange dichotomy appear in modern working life. On one hand there has been a shift in income inequality, with the brightest talent increasingly richly rewarded in comparison to their more average peers.
On the other hand, there have been a growing number of books, articles and studies suggesting that expertise is not really all its cut out to be, and that the crowd can often produce better results.
Despite this apparent scepticism, the cult of hero leadership has seldom been stronger within our organizations.
A recent INSEAD study set out to explore whether there is any merit in expertise when it comes to organizational design.
The paper, called The Nature of Expertise in Organisation Design, recruited a team of experienced executives from an executive MBA programme and pitted them against a team of relative novices from the Master’s in Management programme.
Each participant was presented with two real life case studies around organizational design, one from a start-up and the other involving an established company that need to re-organize itself.
Each participant was asked to describe how they would tackle each problem, with their answers analyzed using the theory of organizational design, the citation of past case studies and visual representations (whether noted organizational designers from corporate folklore have used such things is open to debate).
The authors suggest that the key challenge in organizational design is to manage the tension that exists between the integration of efforts and the division of labor.
For instance, an org chart may be devised, but little thought given to how they will collaborate or share information.
Experts vs novices
So who did best? The researchers hypothesized that the experts would be better, especially when it came to redesigning the organization rather than starting from fresh.
Perhaps not surprisingly, that is exactly what the results showed. The relative novices in the experiment spent more time on the various individual elements rather than how they integrate and collaborate with one another.
It transpired that the more experienced participants usually created a structure that resembled that of the eventual structure adopted by the case study organization (of course, there isn’t any exploration as to whether that structure was successful or not).
The novices would also tend to produce more complex organizational structures, albeit with little thought as to how they might work together.
Getting redesigns right
The authors suggest that the expertise premium is at its highest during a restructuring of an existing organization. They suggest that this is largely because when redesigning an existing enterprise, not every part of the organization will be ripe for change.
They believe that experienced people are more likely to be aware of this fact, and therefore spend more time working on how things fit together properly.
Is expertise alright after all?
Does this prove that expertise matters when it comes to organizational design? I’m not so sure.
A 2012 survey of some 1,600 executives by the Boston Consulting Group found that whilst the vast majority of them had changed the structure of their organizations in recent times, less than half of these efforts were regarded as a success.
“an alarming statistic, and one with perilous implications. Apart from the high costs and squandered opportunity, a failed reorganization can leave an enterprise even worse off than it was before, with lost productivity, a weakened market position, and a disengaged workforce, among other impacts,” BCG said.
If experienced leaders were a key success factor, surely all of those organizations would have succeeded in their attempts? Or at least they would have achieved better than a 50/50 chance.
The study went on to identify six factors that they believed were key to success (or failure:
- Synchronize Design with Strategy
- Clarify Roles and Responsibilities
- Deploy the Right Leaders and Capabilities
- Design Layer by Layer
- De-risk Execution
- Don’t Wait for a Crisis
They revealed that when each of these things was in place, the success rate was nearly 100 percent, versus just 32 percent if you had just one.
Indeed, one common recipe for failure identified by the study was a degree of hubris amongst senior managers who believed they could impose the change in a top down way.
Maybe believing yourself to be an expert isn’t all its cut out to be after all.