· 7 min read · Features

Research: Head office of the future - Blue-Sky Vision?

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The picture of the head office of 2014, envisioned by HRDs in a survey by HR magazine, is an inspiring one. But is the required planning taking place to make it happen?

HR professionals have seen the future. Organisations will be designed to facilitate lightning-quick decision-making. Power will be decentralised. Networked employees will work remotely and flexibly. Creativity will become just as important as productivity, and leaders will switch their focus from barking orders to inspiring great ideas.

This is what the head office (if it still exists) will look like in 2014, according to HR magazine's in-depth survey of 260 HR managers and directors, in partnership with management consultancy Egremont Group.

It is an inspiring vision, but is it achievable? As well as these exciting prospects, the survey also found two-thirds of respondents were in the process of cutting their costs, and a third (34%) of those organisations admitted that in doing this they were not thinking about the future shape of their organisation at all. Could it be that this blue-sky vision may never become reality because such seismic change in operations and culture is not being properly planned or funded?

"It's widely felt that the 'command and control' structure is a thing of the past, and we are all aspiring to empowering employees to be more involved in the mechanics of running our organisations efficiently," says Huw Davies, UK HR director at manufacturing company Aliaxis. "But it takes a huge leap of faith by management to embrace change and of course there is a recession to get through as well."

The danger is that as the economy picks up, lost talent and knowledge, and lack of strategic forward planning will leave many organisations floundering, says Natalie Gordon, marketing director at Egremont Group. "If HR professionals are as serious about adopting the latest technology," she points out, "empowering staff and sowing the seeds of innovation across organisations as they say they are, they need to be getting to work now."

It is advisable for organisations to be planning the future shape of their head office structure at least two years in advance, ideally five years, says Gordon. Anything less than two years is very risky and "completely short-sighted". Yet, according to our survey, we see only a fifth of companies thinking of a five-year plan, and hardly any (just 2%), thinking 10 years on. "The 37% of organisations that are planning two years out while re-aligning costs should be commended, but overall, the lack of foresight is very worrying," she says.

Exploring macro-socio and economic trends can be the answer to planning for the future, and there needs to be an understanding of the technology being developed, the political change, demographics and the changing face of competition in your marketplace.

"It's also vital to watch employee trends," says Gordon. "If employees expect to work in a different way in the future, can your organisation adapt sufficiently? If not, do you risk losing your appeal as an employer?"

Decentralisation is the future

If they act on what they say almost a quarter (23%) of respondents envisage decentralised power by 2014, suggesting the days of the omnipotent, power-wielding big boss are numbered. Instead head offices will be made up of self-directed teams, empowered to make decisions for the good of the organisation, with top-level management putting more energy into nurturing and motivating their colleagues.

Our survey confirms that the command-and-control leadership model of today is losing its appeal in the eyes of HR professionals. Only 35% of respondents think the model will prevail in their organisation in five years' time, although it's alive and well in 85% of their organisations today. Similarly only 18% envisage ideas for improvement solely coming from the top of the organisational tree in the future, something that is happening in 91% of organisations now. A massive 95% think issues are escalated up to management in their workplaces now, rather than being dealt with swiftly by those closest to the problems. Respondents believe that such inefficiency will be a thing of the past, with only 10% considering this to be a characteristic of their organisation in the future.

But Davies at Aliaxis feels the recession will undoubtedly delay the change. "In a crisis, when there are financial difficulties and the need to downsize, organisations dive straight back to a command-and-control set-up, with just a small group of people at the top working out solutions," he says. "But once we're over the crisis, companies might perform better with people at all levels sharing responsibility, feeling empowered to make suggestions and introduce ideas and bringing all the productivity benefits of employee engagement to the business." To make this work he believes it is essential to have robust performance management systems - appraisals, bonuses and simple profit-sharing arrangements - to incentivise engagement and efficiency.

The survey shows 48% of respondents believe today's employees have the skills and the will to resolve issues as they appear, but far more, 85%, think this will be the case in the future. These skills require not just training to raise empowerment and accountability levels, but also an organisation-wide acceptance of a culture of problem-solving. "Efficiency in dealing with issues will only transpire if the whole ethos and structure of the organisation embraces this concept," says Gordon. In a shared ownership environment, the leadership style required is visionary and nurturing, and this is something 92% of the survey respondents aspire to, five years on. More than a third, 38%, already see this happening in their organisation today, so progress is being made.

Innovation from all will be welcomed in the future, but employees need a forum to air their big ideas. Already 44% of respondents say a visible forum, where employees can contribute ideas, exists in their organisation, but they will be far more widespread in five years' time, believe 84%. For instance Best Buy, the US electricals giant, hosts an intranet forum, www.blueshirtnation.com inviting colleagues to 'connect, share, innovate'.

Networked organisations and knowledge-sharing

Nearly all respondents (96%) say knowledge-sharing is currently difficult. However, by 2014, such a major change in organisational structure is expected to have taken place that only 9% think knowledge-sharing will be a challenge by then. HR professionals today see the value of working for 'networked organisations', where individuals are not inhibited by their function within a company, or the level they work at. "They will share a common enthusiasm for the product, and have the technology at their fingertips to connect with each other and people outside the organisation," says Gordon.

Co-creation - working with customers and suppliers to decide corporate policy and generate ideas for products and services - is already happening in 63% of organisations and 79% think it will become more valuable in the future. Yet the stumbling block is technology. The 84% of HR professionals who say 'we want to co-create but our technology does not allow us to' are clearly frustrated by a lack of investment in the tools required. "But it's heartening that so many think this will improve hugely in the next five years," says Gordon. "Only 18% expect to still be facing that problem by 2014."

Flexible working at last

Flexible working will finally be accepted in five years' time. While 95% of respondents say it's considered a soft option today, only 12% think it will be in 2014. Being based at head office will only be considered valuable by 22% of organisations in the future, indicating a sea-change from today's commitment to herding everyone into offices (97%). In the future we may only need to visit head office for rare face-to-face meetings, and it will be perfectly normal for networked, home-working employees to manage their own output, in the knowledge they'll be rewarded on measured performance and results.

Hot-desking and flexible working are starting to be commonplace, with 37% of people selecting this as valuable today, and almost all seeing it as important further down the line. "But once again we find that technology is not yet in place to allow employees to work more flexibly, with 90% saying current technology is preventing progress at their organisation," observes Gordon.

There's also a massive job to do around cultural change. "HR departments must realise that things can't change overnight. Change will be driven by the demands of generation Y workers, who will expect a better work-life balance," says Gordon. Networked organisations capable of providing remote and flexible working will be the employers of choice. "This will require more effort going into performance management, with line managers having the time and tools to maintain contact, have regular dialogues with remote workers, and keep everyone incentivised and in touch," adds Davies.

The disturbing truth from this research is that few organisations are looking five years out as they embark on their efficiency drives today. Short-termism is rife just when business leaders should be planning for long-term efficiency, engendering a culture of slick communication and innovation and building networked environments that will appeal to tomorrow's workers. Getting your business in order now means you'll be in a far better position to flourish in the future.

Effect of the recession on expenditure

Reflecting the current climate of full-blown recession, cost-cutting is happening at two thirds (67%) of organisations. A massive 89% of companies with turnover above £1 billion are cost-cutting while 57% of the smallest companies - with turnover below £5 million - are also feeling the need to cut costs. Their opportunities are limited though as they already operate on tight margins and with small workforces.

Most organisations are not worrying about the future right now, because the recession is taking priority (so say 97%). So the low number of respondents (20%) who say they have a dedicated team working on projects and services for 10 years' time is likely to be reflecting this focus on recession-battling. The fact a mighty 91% think there will be such dedicated teams with sights on the future in five years' time reveals an industry-wide presumption that change is coming soon.

- Who will lead the way?

Future leaders will need to drive change, support the latest technology, have vision, and be a strong motivational figure for colleagues at all levels of the organisation. Sir Richard Branson, CEO of Virgin Group, stands out as the most capable, say over a third of HR professionals questioned. Sir Terry Leahy, CEO of Tesco, is second choice (23%) while Larry Page and Sergey Brin, the co-founders of Google, claim joint-third position (17%).

Branson is certainly known for his nurturing management style. He famously promoted a studio cleaner who eventually ran 15 studios. He is also a razor-sharp innovator, and has his sights firmly on the future. Who else would have launched Virgin Galactic - a company catering for space tourism - so early on?

Sir Stuart Rose, CEO of Marks & Spencer, perhaps fails to impress because respondents consider him more of a traditional 'safe pair of hands' than a visionary with plans to future-proof M&S.