Deloitte - RESEARCH

Building the peloton

today. Their internal focus, bureaucratic nature, and resistance to change hinder customer- centricity, cross-functional collaboration, diversity of thinking, rapid scaling, and agile ways of working. Firms are responding to the challenges they face today by forming cross-silo and cross-organization teams, deconstructing fixed organizational structures by breaking up functional domains, separating teams from traditional management structures, and opening up the definition of “who is my team?” so that they can pull together the diverse skill sets and perspectives these challenges require. Specialist teams are being deployed to address innovation challenges and in-demand technical expertise (a growing trend, though the approach is not new). It is also common for organizations to maintain pools of employees without operational roles, who instead work on an endless series of projects and innovation challenges. 9 A few examples illustrate this phenomenon in action. Category management 10 has enabled retailers to increase sales by handing much of the responsibility for managing a category of goods (bathroom fittings, for example) to a cross- organizational team, one often led by a supplier (rather than a member of the firm’s workforce), a category champion , rather than an employee. Marketing departments are creating cross- functional tiger teams to deliver special product offers—such as a burger of the month—at a faster pace than operations and a firm’s formal supply chain can support. Communities of practice (CoP) and communities of excellence (CoE)—teams that span the enterprise—are used to support the adoption (and exploitation) of new technologies or methodologies. Project teams—the traditional vehicle for delivering business change—are becoming more prevalent as automation shifts a

firm’s efforts from operations (which are increasingly automated) to the business change and improvement projects delivered by teams Cross-functional and cross-organization teams are rapidly becoming the driver of productivity in firms. However, the consequence of this deconstruction is that documented reporting lines and functional or geographical divisions are becoming increasingly disconnected with how work is actually done. A 2019 ADP Research Institute study of 1,000 workers from 19 countries 11 found that of employees who worked on more than one team, “three-quarters said their additional teams didn’t show up in the directory,” 12 suggesting that a significant volume of work and worker relationships aren’t visible on organization charts. In this environment—where companies are moving beyond traditional structures and there is recognition that rigid boxes and lines do not reflect the reality of work—it’s useful to think of the organization as a team of teams , a peloton, analogous to a peloton in a cycling race. 13 A peloton is a team of teams rather than a hierarchy of teams. Its structure is fluid and self- organizing rather than rigid and imposed from without. Individual teams work according to their own strategy and plan, but not in isolation from the teams around them. Cyclists within a peloton are able to exploit the reduction in drag created by another rider’s slipstream and benefit by expending less energy, a technique crucial in the management of fatigue in endurance cycling events. Relationships among teams within the peloton are not formally defined or rigidly fixed. Instead, they are informal and self-organizing, negotiated and renegotiated as circumstances change. The whole peloton—the organization—is a collection of teams that need to work in concert to battle fatigue and achieve their ultimate objective.

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