Organisational Design (OD) in the Age of AI: Addressing the ‘Silent Killer’

We now see and feel things changing daily. The increased adaptability of AI tools and its broad application across industries has a direct emergent shift in organisational structures and workforce expectations. One place to start to understand this is to review the real impact of the skills gap to businesses (often dubbed the 'silent killer' - Dr William B Bonvillian), and understand how its context has changed. 

The Skills Gap: An Invisible Threat 

So, what does the skills gap look like now: 

• Today according to McKinsey & Company, as much as 87% of companies worldwide are aware that they either already have a skills gap or will have one within a few years. This  study in 2023 also found that the skills gap is most acute in digital skill. 
• The World Economic Forum estimates that 44% of workers skills are expected to be disrupted in the next five years. This suggests that workers will need to be adaptable and willing to learn new skills, including digital skills (World Economic Forum, 2023). 

However, this doesn’t mean that this will leave us with a net negative affect. The latest data from the World Economic Forum's 2023 Future of Jobs Report shows that the net job impact of automation and AI is expected to be positive, with 133 million new jobs created by 2025, offsetting the 75 million jobs that are expected to be displaced. 

The report does however warn that the transition to these new jobs will not be easy for everyone. Workers will need to be adaptable and willing to learn new skills, and businesses will need to invest in retraining and reskilling their employees. 

This is now also visible in job market key trends: 

• The rise of new jobs in AI, data science and other emerging technologies.
• The decline of jobs in routine and repetitive tasks, such as data entry and customer service. 
• The renewed importance of soft skills (also known as digital or power skills) such as creativity, problem-solving and communication. 
• The increasing demand for lifelong learning and reskilling. 

With industries and roles transforming rapidly, there's a disconnect between the skills employees have and those businesses require. How these are supported and accelerated needs a complete rethink. 

Rethinking Organisational Design 

To combat this, companies need to consider not just reskilling as a stand-alone objective, but fundamentally redesigning their organisations from the ground up to allow for greater flexibility, agility and resilience and most importantly greater access to organic capability development opportunities (on the job). 

An example of one of the more popular models being discussed and considered in HR is a skills-based organisational model. It focuses on the abilities and competencies an employee has rather than focusing on rigid job titles and descriptions. This flexibility allows employees to adapt to different roles and challenges as the business landscape shifts.  Which in turn drives wider collaboration and engagement and opens the playing field for exposure to varied problem solving, critical thinking and creativity in solutions. 

Another example which allows for similar fluidity are organisations that use principal-based OD models. Examples of companies adopting this approach include Google, Patagonia and Spotify, as well as small to medium size enterprises (SME’s) such as Basecamp, Buffer, Zapier and GitLab. These organisations have all achieved success by empowering their employees, decentralising decision-making and creating a culture of transparency, accountability and collaboration. 

How can we enable better OD decision making: Enabling continuous learning 

Whatever you end up with though is secondary to the process you take to get there. Asking the right questions to understand ‘what are the right problems to solve’ for your organisation at this stage in their journey is the secret sauce to finding the perfect fit for you!  

For impactful OD structures and practices, organisations must prioritise evolving into proactive learning entities. It’s by adopting a marketer's strategic mindset and influencing leaders through effective learning journeys that they can not only develop and close the skills gap, but drive timely and effective OD decisions. 

Conclusion 

The age of AI brings both opportunities and challenges. However, by adopting a forward-thinking mindset and focusing on OD and embedding learning to take people on the journey will immerse this into the very fabric of a company's culture. Businesses can not only address the skills gap but thrive with the right OD. It’s through embracing this continuous learning and inclusive support structures they can have adaptive talent strategies. Companies can ensure that their most valuable asset – their people – are equipped for the future and the organisation can respond to this adaptive new (Post Fourth Revolution) world.  

Vitro has supported clients for over a decade in strategic design and operational optimisation and uses simplified tools to support this process. At Vitro we make a difference to organisations and help them maximise their ability to reach their full potential. We support and design operational models which create an environment of innovation through alignment, data analysis and planning. If you want to talk about how we can support you, or your teams, please get in touch with Dieter Deuer and Jenny Cornforth.