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What shape is your business in?

Written by on 03 January 2011

For many years, the dominant organisational form was the so-called 'M Form'. This was the most easily recognised form, and is still employed in almost all of today’s organisations, from the public to the private sector.

What is an 'M Form' organisation?

The 'M Form' is predicated on a traditional management philosophy of grouping capability and functions together to drive ease of management and production efficiencies. This can bee seen in divisional and area structures that share some functional capabilities and retain some kind of specialisation. This way resource can be prioritised and synchronised around activity.

Battle grouping resource and control

During the Second World War, the German Army began to evolve a new form of military structure. Driven by the need to marshall resources against requirements, the German Army developed the concept of battle grouping. This organisational design first analysed the requirement to complete the task, it then borrows from across the organisation the capabilities required to fulfil the objective. Once the task is complete, the resources are reallocated.

Demands of the 'N Form'

As the organisational design is predicated on a transitional structure, greater demands are placed on leadership, sharing common communications and management protocols. The leader needs to be clear, competent and set a clear vision or intent of what is required. As the organisation within a battle group concept (N Form) is more diverse and specialised, there is a need for the leader to have intimate expert knowledge of all areas. The leader needs to adopt an empowerment management style and an effect’s based planning approach.

Efficiency

As the 'N Form' organisational design only utilises resources that are required for the task, it is highly efficient at providing optimised solutions. However, it does require more from its leaders and organisational management group. It is worth noting that the German Army, even towards the end of the Second World War, spent more time training their junior leaders than any other Army of the time.

The 'N Form' is the future

Although many organisations are still based on the traditional 'M Form' design, there is a growing body of evidence to suggest that the 'N Form' is the future. The growth of strategic outsourcing and commercial partnering are examples of the early stages of 'N Form' adaptation. The business environment is concentrating more on 'core capabilities' and acquiring enabling capability only for the transitional requirements of the task.

'M' and 'N Form' enabled by technology platforms

The growth of social networks and interconnected technology systems that provide network-enabled capabilities (NEC), are driving a greater adoption of the 'N Form'. The ability to share knowledge across organisational boundaries, to group intellectual and logistic capabilities within a virtual world, is blurring the edges of the traditional organisation. The recent global financial crisis is yet another demonstration as to how no organisation or state stands alone. The interconnected world already exists and drives our understanding of stakeholders and sources of competitive advantage.

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