Organisational design as the heart of strategy

I've just been reading a McKinsey Quarterly article ("Better strategy through organisational design", Lowell L Bryan and Claudia I Joyce, No. 2, 2007). Bryan and Joyce claim that a "golden opportunity" to generate competitive advantage can be gained by "making organisational design the heart of strategy".

The authors claim that we need to move away from the organisational structures of the 20th Century. These structures were designed to cope with the scarcity of capital. We need to move to new designs, designs aimed at "maximising the returns on people, not capital". (Amongst other things, this argues for new measures, including "profit per employee").

In the 21st Century the design of an organisation needs to reduce unproductive complexity, and maximise the opportunities for productive interactions amongst talented workers. How do we do this? The authors argue that you need both hierarchy and collaboration.

You still need hierarchy, because you need to be able to set aspirations and make decsions etc. But you also now need collaboration. The rest of the article starts to canvass how you might induce collaboration in a large scale organisation (while at the same time still getting the best out of hierarchy, without undue complexity). One of the great ideas for promoting collaboration is to borrow from basketball - where players are rewarded on their number of "assists" and not just on goals scored.