Businesses leaders are seeking to build flatter and more adaptable organisations to cope with the complexities of today's global economy, according to new research. 

Research carried out by PurpleBeach reveals that businesses leaders are dedicating more time to innovation, decision making and risk than they did during the financial crisis of 2007-2011, and increasingly turning to their operational and personal networks, rather than line managers and direct reports, to help inform decisions and drive success. The main findings were as follows: Businesses reducing management to become more adaptable and reduce cost. While half (51 percent) of the leaders interviewed said their organisations had increased headcount in the last five years, just a quarter (28 percent) had added new management layers. More than a third (37 percent) have actively removed layers of managers to create flatter organisations. Eight in ten (79 percent) said their firms are now more responsive to change than they were in 2010.

Leaders making more considered, data driven decisions. Decision making processes have also evolved. Half (52 percent) of the leaders spend more time making business decisions than they did in 2010 and three quarters (77 percent) are making greater use of data to inform them. Data insights are often validated through discussion with people in leaders’ immediate networks, both inside and outside of the business. Very different approaches to managing risk. Just over half (53 percent) of the leaders PurpleBeach spoke to spend more time managing risk now than in 2010. A third (37 percent), however, have adopted a more radical approach. Many in this camp accept that uncertainties abound, but spend less time worrying about them because their leaner, more flexible businesses are now more able to adapt.

Innovation is becoming more open and externalised. Over half (56 percent) of firms spend more time today developing new services and ways of doing business than during the financial crisis. Most (58 percent) are also being more open, engaging with a greater range of people outside of their businesses for feedback and ideas. Just 14 percent of firms now innovate entirely behind closed doors to avoid alerting competitors to their activities. Network development is the crucial skill for modern leaders. While a high level of self-awareness and keen customer focus are seen as valuable leadership qualities, the ability to develop an effective team is most crucial. This attribute was selected by three quarters (75 percent) of people PurpleBeach spoke to. Direct line reporting is giving way to more flexible operational and organisational networks built around a specific task or function.

Annemie Ress, founder of PurpleBeach, comments:“Businesses have emerged from the financial crisis into one of the most complex and uncertain economic periods in history. They’ve had to constantly evolve to keep pace with a digital world in which continuous change can make advantage disappear overnight and manage a new generation of people in the workplace with very different expectations of employment.” “Exceptional businesses today tend to favour flatter, matrix-style structures and a more relaxed form of leadership to foster autonomy, trust and collaboration. Good leaders recognise that don’t have all the answers and use data and constant dialogue with their people to boost innovation, decision making and risk management.”