The Rise of the T-Shaped Organization (2015)

The concept of T-shaped skills was first introduced over 20 years ago, but its importance, - to both individuals and organizations, - has continued to rise.  A growing number of articles have been extolling the value of T-shaped professionals, that is, individuals who combine deep cognitive, analytical, and/or technical skills in a specific discipline, with broad multidisciplinary, social skills.

As described by IDEO CEO Tim Brown:  “The vertical stroke of the T is a depth of skill that allows them to contribute to the creative process.  That can be from any number of different fields: an industrial designer, an architect, a social scientist, a business specialist or a mechanical engineer.  The horizontal stroke of the T is the disposition for collaboration across disciplines.”

T-shaped skills are increasingly valued in the marketplace.  For example, a recent paper by Harvard professor David Deming showed that labor markets have been rewarding individuals with strong social skills, that is, with interpersonal skills that facilitate interactions and communications with others.  Deming’s research showed that since 1980, social-skill intensive occupations have enjoyed most of the employment growth across the whole wage spectrum.  Employment and wage growth have been particularly strong in jobs requiring both high cognitive and high social skills.  But since 2000, they have fallen in occupations with high cognitive but low social skill requirements, - “suggesting that cognitive skills are increasingly a necessary but not sufficient condition for obtaining a high-paying job.”

Another recent paper, - by Ernest Wilson, Dean of the Annenberg School of Communications and Journalism  at the University of Southern California (USC), - described a recent study to better understand the key competencies companies are looking for.  The study asked business leaders around the world what attributes executives must have to succeed in today’s digital economy. 

It found that the traditional hard skills typically provided by engineering and business schools must be complemented with a set of so-called soft skills or attributes.  Five such attributes were identified in the study: adaptability, cultural competence, 360-degree thinking, intellectual curiosity, and empathy.

Why are these soft attributes so valued in today’s business environment?  What’s wrong with I-shaped people with strong individual skills?  Brown offers a very good answer to these questions.  “Most companies have lots of people with different skills.  The problem is, when you bring people together to work on the same problem, if all they have are those individual skills - if they are I-shaped - it’s very hard for them to collaborate.  What tends to happen is that each individual discipline represents its own point of view.  It basically becomes a negotiation at the table as to whose point of view wins, and that’s when you get gray compromises where the best you can achieve is the lowest common denominator between all points of view.  The results are never spectacular but at best average.”

What if someone has strong soft attributes but lacks deep skills?  “Somebody who’s just got the cross of the T - it’s an empty experience,” adds Brown.  “In our environment, we’re only effective if we get things done.  We have to design things.  Much of that is based on people using their individual skills to get things done, whether it is prototyping or engineering something.  Occasionally, we have people who don’t really have a depth of skills, and they really struggle.  They don’t get respect from the group.”

The growing demand for T-shaped skills points to the rise of the T-shaped organization.  There are multiple way of defining the attributes of such an organization, but one that I think is particularly applicable to our times is that a T-shaped organization is both good at the management of its existing operations, as well as being good at the strategy and innovation needed for a healthy future.  It’s not so easy to be good at both operations and strategy because they require fairly different talents and cultures.

Operational excellence entails improving the existing products and services of the company with incremental innovations that will add new features, lower costs and improve quality.  It requires detailed analysis of technologies, quality, processes, competitors, customer satisfaction and market segments.  It means nurturing employees, business partners and customers, as well as meeting the financial expectations of investors.

But preparing for the future, especially with strategies based on new, disruptive innovations, requires a very different management style.  It cannot be based on rigorous information analysis, because with new strategies, there is little information to analyze in their early stages.  There are lots of unknowns because, early on, it’s not clear how the market for a new technology, product or service will develop.  It requires establishing an early market presence and well-planned experimentation; close external collaborations with research communities, business partners and early adopters; and continuous refinement until it becomes clear what the company's strategy should be.

A lot of companies have trouble dealing with the delicate balance required of T-shaped organizations.  The operational demands are so intense, especially in our fast-moving, highly competitive and demanding times, that just about all the efforts and funds of the company are spent managing its core business.  Consequently, the management team is just flat out of time and energy to be able to nurture a new business opportunity with small near-term revenues and a promising but unpredictable future.

The disciplined, analytical approaches generally taught in engineering and business schools work well when dealing with well defined products to be developed or concrete problems to be solved.  But, they’re less effective when dealing with highly complex, fast-changing problems, where it’s often not clear what’s going on in the present, let alone how things will evolve into the future.  We need different principles and processes to address this class of problems.  This is where we need a more holistic, collaborative approach to pull together everything that’s known about the problem, and a more team-based approach to help come up with a creative, pragmatic solution.

The rise of the T-shaped organization is not surprising.  Companies need to break out of their organizational siloes to better adapt and respond to our fast-changing competitive environment.  Collaboration, - both within their own boundaries and beyond, - is indispensable for innovation.  Incremental changes are no longer sufficient in a world that’s substantially more complex, volatile and uncertain.  We need to find creative approaches to existing problems as well as identify important new problems to solve.  In the end, this is what a T-shaped organization is all about.

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