Designing Effective Digital Organizations: A Conceptual Framework

This report, based on the work of Snow et al. (2017), presents a conceptual framework for designing effective digital organizations in the context of the global economy's increasing digitization. The framework emphasizes actor-oriented principles, self-organization, and strategic alignment of digital technologies to foster high engagement and productivity. The report discusses the impact of digital technologies on organizational efficiency, effectiveness, and architecture. It highlights the shift from hierarchical control to protocols, commons, and infrastructures to facilitate collaboration and self-organization. The report explores how organizations can adapt to digital disruption, implement actor-oriented architectures, and develop digitally based capabilities. It further examines the role of technology in automating and augmenting tasks, internal and external communication, and collaborative decision-making, citing examples from various industries. The report concludes by emphasizing the importance of digital design tools and the integration of digital technologies to enhance organizational performance.

RES EAR CH Open Access
Designing the digitalorganization
Charles C.Snow1
, Øystein Devik Fjeldstad2* and Arthur M.Langer3
* Correspondence:
[e-mail]
2BINorwegian Business School,
Oslo,Norway
Fulllist of author information is
available at the end of the article
Abstract
Increasingly,organizations are assessing their opportunities,developing and
delivering products and services,and interacting with customers and other
stakeholders digitally.Mobile computing,socialmedia,and big data are the drivers
of the future workplace,and these and other digitally based technologies are having
large economic and socialimpacts,including increased competition and
collaboration,the disruption of many industries,and pressure being put on
organizations to develop new capabilities and transform their cultures.In this article,
we provide a conceptualframework for the design of effective digitalorganizations.
Our framework is predicated on the current state of digitization across diverse
sectors of the globaleconomy.In the digitalworld,allactivities and transactions
leave digitalmarks,and allactors,things,and places can be reached and affected
digitally.As a result,we can design for self-organization rather than using hierarchical
mechanisms for controland coordination.Such designs require the strategic and
culturalalignment of digitaltechnologies within the organization and externally with
stakeholders.We propose that “actor-oriented” principles are at the heart of
designing digitalorganizations and that,if properly applied,can result in a workplace
where organization members are highly engaged and productive.
Keywords:Digitaltechnology,Digitalorganization,Digitaldisruption,New
organizationalforms,Organizationalarchitecture,Workplace of the future,
Collaboration tools
Digital technologies are transforming the global economy.In his pioneering book Being
Digital (1995),technology futurist Nicholas Negroponte (1995),described how the old
industrialeconomy would be eaten away by a new digitaleconomy.Moreover,digital
technology makesit possible formembersof an organization to self-organize and
therebyavoid thedelays,distortions,and otherdamaging effectsof hierarchically
organized systems (Benkler, 2002). Established companies recognize that digital tec
gies can help them operate their businesses with greater speed and lower costs andin
many cases,offer their customers opportunities to co-design and co-produce products
and services (Sambamurthy et al.2003).Many start-up companies use digitaltechnolo-
gies to develop new products and business models that disrupt the present way of d
business and take customers away from firms that cannot change and adapt.
Software tools and applications,robots,and a hostof other digitaltechnologies
“… are doing for mentalpower – the ability to use our brains to understand and
shape our environments – what the steam engine and its descendants did for muscle
power” (Brynjolfsson & McAfee,2014:7–8).Properly harnessed,digitaltechnology can
enable individuals,firms,cities,and governments to become smarter – to expand their
© The Author(s).2017 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 Internatio
License (http://creativecommons.org/licenses/by/4.0/),which permits unrestricted use,distribution,and reproduction in any medium,
provided you give appropriate credit to the originalauthor(s) and the source,provide a link to the Creative Commons license,and
indicate if changes were made.
Snow et al.Journalof Organization Design (2017) 6:7
DOI10.1186/s41469-017-0017-y

capabilities and to adapt to new and changing conditions. As an agile organizational form
(Alberts,2007), the digital organization will be populated with individuals and teams who
are facilewith technologyand who can collaborateboth insideand outsidethe
organization to make process improvements and develop new solutions.
In our article,we offerorganizationaldesigners,change agents,and managersa
conceptualframework for the design ofa digitalorganization – identifying its major
components and showing how they should be put together.A fully digital enterprise is
a powerful combination of people,technology,and organizing ability that is well suited
to today’s economic and social environment.In the first section,we discuss how digital
technologies are used by organizations to increase their efficiency and effectiveness.
Digital technologies augment and support work activities and decision-making,connect
membersof the organization,and aid in managing relationshipswith customers,
suppliers,and other stakeholders.In the second section,we describe the organizational
architecture thatis appropriate for a knowledge-intensive,highly collaborative digital
organization.This architecture is “actor” oriented – that is,it places a premium on the
ability oforganization membersto self-organize while performing theirwork tasks.
Actor-oriented organizations mostly rely on protocols,commons,and infrastructures
to maintain controland coordination instead ofhierarchicalmechanisms.In the final
section,we discuss how to apply the actor-oriented architecture for those organizations
wanting to develop their digitally based capabilities.Here we address the skills and
motivation ofactors,the creation ofcommons that support their work activities,and
the protocols and infrastructures that connect actors and facilitate their interactions.
Digital technology
Technology is a way of getting work done (Perrow,1967).New technologies are seldom
“invented”but ratherare developed by combining technologiesthat already exist.
Unlike older technologies,which mostly producefixed physicaloutputs,digital
technologies are generative (Zittrain,2006) – they can be combined and recombined
endlessly for fresh purposes (Arthur,2009).In many cases,digital technologies also can
enable replication and distribution ofproducts and services at close to zero marginal
cost(Shapiro and Varian,1999;Varian,2000).The domain ofdigitaltechnology in-
cludes computer hardware,software,transmission networks,protocols,programming
languages,very large-scale integrated circuits,algorithms,and allthe components and
practices that belong to these various technologies.Digital technology enables immense
amounts of information to be easily compressed,preserved,and transmitted.In recent
years,digitaltechnology has disrupted one industry after another (Christensen,1997),
and it is rapidlytransforming how peoplecommunicate,learn,and work. Many
products and services are fully or partially digital,such as news and entertainment,and
increasingly work is being done digitally.
The essence ofthe digitalrevolution has been concisely described by Brynjolfsson
and McAfee (2014).They explain that technological progress in the digital era is due to
three characteristics of technology:it is exponential,digital,and combinatorial (p.37).
The exponentialaspect of technology means that its power and usefulness are getting
better and better all the time and that “… what’s come before is no longer a particularly
reliable guide to what will happen next” (p.55).Digitization turns various kinds of data
and information into bits – the ones and zeroes that are the language ofcomputers.
Snow et al.Journalof Organization Design (2017) 6:7 Page 2 of 13

Advances in digitization have resulted in “… new ways ofacquiring knowledge…and
higher rates ofinnovation” (p.62).Lastly,digitalinnovation is combinatorial:“Each
developmentbecomes a building block for future innovations” (p.81).Coupled with
human ingenuity,these three characteristics allow digitaltechnologies to be developed
and applied at a rapid rate.
Adaptation and disruption
Organizations adapt to the needs ofthe market;to the technologies available for the
design,production,and deliveryof productsand services;and in their meansof
organizing (Miles and Snow,1978).The digitization ofsociety is affecting customer
needs,productand servicepropertiesand deliverymechanisms,and organization
design (Langer,2017).Changes across these areas are coalescing.For example,music
has changed from a productto a service industry wherein consumerdemand has
evolved from purchasing packaged CDsto accessing customized,streamed playlists
which are organized by aggregators such as iTunes,Tidal,Spotify,and Pandora,with
distribution driven by artists instead ofstudios.“Products as services”is a business
model that is growing in many arenas (Porter and Hempelmann,2014).
Technologicalinnovations can be incrementalor disruptive.Incrementalinnovations
are characterized by smallimprovements to existing products,services,and processes.
Disruptive innovations,on the otherhand,may create new marketsand business
models,and often may displace marketleaders (Christensen,1997;Christensen and
Bower,1996).In past decades,organizationalresponses to technologicalchanges were
mostly incrementaland,in part, enabled by IT improvementsthat allowed greater
scope and dimensionality oforganizationalcontroland coordination.Most of those
adaptive responses were made within existing hierarchical forms of organizing (Altman
et al.2015).Digitaltechnologies,however,often disrupt established ways of organizing
and requireadaptation through collaboration aswell as self-organization around
situation awareness (Endsley,2000) and knowledge commons (Hess and Ostrom,2006;
Ostrom,1990,2010).Self-organization and collaboration,as an adaptive response,is
faster and more effective than a hierarchical response.
The technologicalmanifestationsof disruption in organization design are clearly
visible,as are workplace changesand changesin inter-organizationalrelationships.
What is less visible are changes in the associated design paradigm,which enable organi-
zationsto obtain efficiency and effectivenessimprovementsby investing in digital
technology.The new organization design principles are similar to those used in design-
ing digitaltechnologies themselves.Their roots are found in object-oriented systems
design (Dahl and Nygaard,1966) and in the architecture of the Internet (Krol,1993).In
organizationalterms,these principlesare embodied in actor-oriented architectures
(Fjeldstad et al.2012).
Working and organizing digitally
Digital technologies play a role in all aspects of operating,controlling,and coordinating
the activities oforganizations (Setia etal. 2013).Broadly speaking,they are used for
automatingand augmentingtasks,communicatinginternallyamongorganization
members and externally with customers and partners,and in collaborative decision-
Snow et al.Journalof Organization Design (2017) 6:7 Page 3 of 13

making among digitaland human agents (Davenport and Kirby,2015;Engelbart 1962;
Huber, 1990;Licklider,1960;Simon, 1973).At Tesla’smanufacturingfacilityin
Fremont,California,technicians work alongside 185 robots made by the German firm
Kuka Robotics to assemblethe electric cars. By using artificial intelligence
“reinforcementlearning algorithms,” the robots are able to switch tools and perform
certain tasks farbetterand fasterthan theirhuman co-workers(Gershgorn,2016).
Surgeons at the Mayo Clinic use robots to augment a variety of surgicalprocedures in
heart,head,and neck operations.The surgeons perform those operations by controlling
surgical micro-instruments attached to robotic arms (Mayo Clinic,2016).
Both intra-and inter-organizationaltransactionsand communicationshave been
performed digitallyfor a long time (Fedorowiczand Konsynski,1992).Walmart
exemplifies a highly digitized supply chain connecting its stores,distribution centers,
and suppliers (Mata et al.1995).Currently,socialmedia such as Facebook and Twitter
are used by companies to communicate with their customers and other stakeholders,
and digitalplatforms such as Facebook at Work and Microsoft’s SharePoint allow for
internal communication and for collaboration with partners.
Digital technologiesare also used forlearning,decision-making,and design.E-
commerce companies such as Amazon,Google,Airbnb,and Uber study the data trails
of consumer behavior to design markets for greater efficiency and build new markets
(Lohr,2016).Intelligent digital design tools are used in engineering and creative indus-
tries.Those tools typically offer 3D representation of the objects under design,and they
allow designersto simulatethe operationsand performanceof alternativedesign
choices (Fujitsu,2016).In semiconductor manufacturing,the designs are digitally trans-
mitted to equipment that manufactures the product.With continuing development and
wider adoption of3D printing technologies,the design-to-manufacturing process will
become fully digitalacross many more industries (Sasson and Johnson,2016).MTR
Corporation,which owns and operates the Hong Kong subway system,uses artificial
intelligence to schedule maintenance tasks.In a typical week,more than 10,000 people
carry out2,600 work orders.The system was “trained” by using expertise extracted
from human experts and then transformed into work rules.The main difference between
normal software and MTR’s artificial intelligence is that it contains human knowledge that
takesyearsto acquire through experience (Hodson,2014).Some companiesemploy
digitaldesign tools in collaborating with their customers and partners.Lego provides
toolkits on its website that enable entrepreneurs and customers to submit product ideas
and startnew Lego brick-based businesses (Heinerth etal. 2014).(See Table 1 for a
summary of digital applications and leading digital firms and organizations.)
An organization is a goal-directed,boundary-maintaining activity system (Aldrich and
Ruef,2006).In traditionalorganizations,technologicalartifacts such as manufacturing
equipment and computers are controlled by human operators. With the declining costs of
globalcommunication and information processing,hierarchyis beingreplaced by
radically different ways of organizing (Fjeldstad et al., 2012),the digital elements of which
include cloud computing,big data analytics,cognitive computing,and collaboration
platforms.Artificial intelligence embedded in machinery and tools,as exemplified above,
plays an ever-larger role in emerging digital organizations (for a survey see Kolbjørnsrud
et al. 2016).As a result,employees collaborate with,rather than merely control,the
technology in use,and organizational designs have to encompass both human and digital
Snow et al.Journalof Organization Design (2017) 6:7 Page 4 of 13

agents.Organizing digitally means collaboration with more entities and less reliance on
hierarchy for controland coordination.It also entails empowering employees,partners,
and customers who use digitaltools for the co-creation and co-production of products
and servicesas well as providing digitalplatformsfor self-organized collaboration
(Boudreau et al. 2011).
Actor-oriented organizational architecture1
Digitaltechnology is not only changing how organizations operate but also the way we
think about organizing.Organizations increasingly include digitaland human agents who
share means of communication,control,and coordination.A traditional organization is ar-
ranged hierarchically – that is,control and coordination are achieved through an authority
(reporting) structure in which superiors plan and coordinate the activities of subordinates,
allocate resources,and resolve problems and conflicts (Simon,1962).A hierarchical
organization can be effective in stable and predictable environmentsbecause the
organization doesnot haveto regularlyinnovateor adaptto change.Many of
today’senvironments,however,are not stableand predictable;they are volatile,
uncertain,complex,and even ambiguous(Johansen,2007;Suhayl& Joshi, 2015).
Such environments are characteristic ofknowledge-intensive industries like biotech-
nology,computers,healthcare,professionalservices,and nationaldefense.Organi-
zationsoperating in thesetypesof environmentsrely heavilyon the agencyof
their members.A hierarchicalorganization inevitably instills a hierarchicalmindset
among its members.Members understand that they are being paid to do a particu-
lar job, and they look to theirmanagers to setgoals,develop plans,and approve
the quality oftheir work.As a result,organization members become psychologic-
ally as wellas economically dependenton the hierarchy.In addition to the friction
created by “relay managers”(Drucker,1988)who merely passalong information,
Table 1 Digitalapplications used in leading digitalfirms
Target area Goal Leading digitalfirms and their
industries
Customer experiences Customer co-creation of products
and services
Customer engagement and loyalty
Customized offerings
Burberry (clothing)
Starbucks (specialty retailing)
Caesars (gambling and
entertainment)
Internaloperations Increased efficiency
Lower costs
Greater speed
Higher quality
Asian Paints (paint and adhesives)
Codelco (mining)
Business models Reinventing industries
Substituting products or services
Creating new digitalbusinesses
Reconfiguring value delivery models
Rethinking value propositions
Market design
Airbnb (private lodging)
Uber (taxiservices)
Amazon (online retailing)
UPS (logistics services)
Product design and developmentIntelligent product design
User-driven innovation
Fujitsu (electronics)
Nike (athletic shoes and apparel)
Lego (toys)
Organizing Agile organizations
Collaborative processes
Non-hierarchicalmeans of control
and coordination
IBM (technology and consulting)
Accenture (professionalservices)
NATO military forces
(nationaldefense)
Source:Adapted from Westerman et al.(2014)
Snow et al.Journalof Organization Design (2017) 6:7 Page 5 of 13

hierarchicalmanagementstylestend to reduceintrinsic employeemotivation to
take initiative.
Prior research hasproposed an actor-oriented organizationalarchitecture thatis
appropriate forknowledge-intensive sectorswhere organizationsmustcontinuously
learn and adapt (Fjeldstad et al.2012).Actor-oriented organizations rely on self-organizing,
with only minimaluse ofhierarchicalmechanisms to achieve controland coordination.
Such organizations are particularly usefulfor large-scale,multi-party collaboration – a
required capability in knowledge-intensive industries (Benkler,2002;Powellet al. 1996).
Collaboration has been shown to reduce risk,speed products to market, decrease the costs
of solution development and process improvement,and enable access to new knowledge,
technologies,and markets (Eisenhardtand Schoonhoven,1996;Hagedorn,1993;Kogut,
1988; Wheelwright and Clark, 1992).
The actor-oriented architecture is composed of three elements:(1) actors who have
the capabilities and values to self-organize;(2) commons where the actors accumulate
and shareresources;and (3) protocols,processes,and infrastructuresthat enable
multi-actor collaboration (see Table 2).In actor-oriented organizations,controland
coordination are based on direct exchanges among the actors themselves rather than
on hierarchical planning,delegation,and integration.Although hierarchy is present in
actor-oriented organizations,these designs mainly rely on lateral,reciprocalrelation-
ships among actors for controland coordination.As an illustration ofhow an actor-
oriented organization works in an easy-to-grasp context,see Table 3,which describes
the organization of ants foraging for food.
Actors
Actors – whether they are individuals, teams, or firms – must possess the capabilities and
values to self-organize.They engage in self-management rather than wait to respond to
directions received from the hierarchy.They also act with integrity,developing a reputa-
tion for consistent,competent behavior – socialcapitalthat can be used at other times
and in other arenas to develop new relationships and business opportunities.The trust
that is built up between actors saves the costs of designing and using elaborate control
mechanismsthat monitorand ensureproperactor behavior.In an actor-oriented
organization,actors understand the overallstructure and processes ofthe organization,
and their decisions and actions are taken in pursuit of the organization’s common good.
Table 2 Elements of an actor-oriented organization
Element Function Examples
Actors Perform work activities by self-
organizing and collaborating
Individuals or teams in an organization
Firms in a collaborative community
Citizens,firms,and municipalagencies in
a smart city
Commons Shared resources made available to
actors to support their work
Shared knowledge
Shared databases
Shared situation awareness
Protocols,processes,and
infrastructures
Infrastructures connect actors with
one another
Protocols guide actor behavior
Processes that combine to create
an agile organization
Software apps that announce projects as
wellas the availability and expertise of actors
Shared norms and values concerning how
actors should behave
Intra- and inter-organizationalcollaboration
Snow et al.Journalof Organization Design (2017) 6:7 Page 6 of 13

By focusing on the common good,actors can take advantage of shared values,norms
of reciprocity,and trustin the self-governance process(Hessand Ostrom,2006;
Ostrom,1990,2010).
Commons
Commons refers to resources that are collectively owned and available to actors (members
of the organization).One type ofcommons is a knowledge commons,a repository of
knowledge thatorganization memberscan both contribute to and use.For example,
Blade.org,a collaborative community ofmore than 70 firmsin the computerserver
industry,posted allof the solutions developed by member firms on the organization’s
website.Any Blade.org member firm could access the website and examine the solutions
for ideas that might apply to its particular market or customer base (Snow et al.2011).
Smart Aarhus,the smart-city initiative of Aarhus,Denmark,has a database called Open
Data Aarhus whose purpose is to make relevant data and information accessible to Aarhus
citizens and organizations.These datasets can be used to develop new products,services,
and digital applications. Any firm or individual citizen can access the more than 75 datasets
in Open Data Aarhus and use the data for collective purposes (Snow et al. 2016).
Shared situation awarenessis a commons that facilitatesself-organization.
Situation awareness refers to knowing what is going on in the organization (Endsley,
2000).Digitally shared situation awarenessprovidesan up-to-date portrait of
problems and opportunities in the organization’s environment as well as the current
availabilityof resourcesto addressthose problemsand opportunities.Through
digitallyshared situation awareness,valuableinformation iswidely availableto
organizationmembersin their decision-making.Originally developedas an
operationaltool for fighter pilots in World War I,situation awareness is used today
in air traffic control,power plants,and advanced manufacturing systems (Endsley,
2000),and its use is growing in healthcare and other sectors.When actors share an
up-to-date awareness ofthe organization’s situation,everybody in the organization
can make the right decision or take the correct action without seeking direction or
authorization from the hierarchy.
Table 3 Ants foraging for food
A queen ant lays the eggs that establishes the colony.She gives the ants their innate characteristics but does
not directly controland coordinate what they do.Worker ants operate according to a set of processes and
communication protocols that enable them to self-organize their work.For instance,when an ant finds food,
it releases pheromones on the way back to the nest.The scent is a signalthat mobilizes other worker ants to
follow the chemicaltraces to the food source.They then collect and transport food in efficient columns back
to the nest untilthe food source is empty.When there is no more food to collect,the ants stop releasing
pheromones as they return to the nest.The scent weakens,and the ants start exploring new terrain to find
more food.
This example includes the core elements of the actor-oriented architecture.The actors in the ant organization
are the queen,workers,drones,and soldiers (Buckingham,1911;Gordon,2014),allof whom have different
capabilities.The queen is the one who starts the colony and lays allthe eggs.Drones are male ants who do
not perform any work in the colony;their sole function is to fertilize a new queen.Soldier ants defend the
nest.Worker ants perform a variety of tasks including nest building and maintenance as wellas food foraging,
and they coordinate by using pheromones as communication protocols.In food foraging,the worker ants
search randomly for food in the absence of a nearby pheromone trail,drop pheromones on the way back to
the nest while carrying food,and follow a pheromone trailto a food source.Thus,pheromone trails provide
the ants with a shared situation awareness of food sources.The worker ants each contribute to updating the
situation awareness,and they alluse this commons to determine their own behavior.Updating and using
the pheromone trailfor navigation is part of the ants’collaborative capabilities.
Snow et al.Journalof Organization Design (2017) 6:7 Page 7 of 13

Infrastructures,processes,and protocols
Infrastructures connectactors and allow access to the same information,knowledge,
and other resources.Actors who have the knowledge,information,tools,and values
needed to set goals,and who can assess the consequences ofpotentialactions for the
achievementof those goals,can self-organize.Self-organizing actors use protocols to
guide their collaborativeinteractions.Protocolsare “codesof conduct”used by
organizationalactorsin their exchangesand collaboration activities.An important
category ofprotocols deals with the division oflabor,the mobilization and linking of
actors for a particular project or task.Examples are protocols by which actors advertise
problemsor opportunitiesas well as their own capabilitiesand availability,and
protocols by which actors search for potential collaborators.
In summary,actor-oriented organizational architecture is focused on the organization’s
actors:the work that they do,and the principles and processes by which they relate to
one another.Competent actors working for the common good ofthe organization can
self-organize and self-manage with only minimal need for hierarchical control and coord-
ination.Commons,infrastructures,and protocols are used to guide and supportactor
behavior,connecting organization members with one another and facilitating their work
activities.
Applying the actor-oriented scheme to the design of the digital organization
Traditionalorganization design is centered on structuralrelationships – the boxes on
the organization chartand the reporting linesthat connectthem.Actor-oriented
design,by contrast,is centered on shared access to information and other resources as
well as the protocols and infrastructures by which actors connect and collaborate.Born-
digital companies can apply an actor-oriented design at their inception.Established firms,
however,typically mustbe redesigned.Redesign involveschanging a predominantly
hierarchical system supported by legacy technologies to an actor-oriented system (Langer,
2017). Having targeted a particular area for redesign,designers and decision-makers need
to address each of the components of the actor-oriented scheme.
Collaborating,self-organizing actors
A competent actor is one who possesses the knowledge,skills,and values suited to an
actor-oriented system.In building a digitalorganization,the effective composition and
mobilization of a set of competent actors may require a combination of selection,train-
ing,mentoring,and replacement of personnel.An actor-oriented digital organization is
especially conducive to use by millennials (people born after 1980) who have acquired
knowledge and expertise from their Internetactivities (Langer,2017:Ch. 10),and it
may be difficult to use by employees who lack socialmedia skills and who have been
ingrained with hierarchicalapproachesto organizing and managing (Espinoza and
Ukleja,2016;Saxena and Jain,2012).
In 2015,millenials became the largest generation in the U.S.workforce,and by 2025
they willconstitute 75% ofthat workforce (Meister and Willyerd,2010).A forecasted
skill set for the digital-age workforce isshown in Table 4.As shown,the digital
organization willrequire its members to have a demanding set ofboth hard and soft
skills.Hard skills include computationalthinking and trans-disciplinarity.Soft skills
Snow et al.Journalof Organization Design (2017) 6:7 Page 8 of 13

include social intelligence,cross-cultural competency,and the ability to collaborate.To
capitalize on these skills,the digitalorganization must provide flexible workspaces and
policies that motivate millennials and enable them to be productive.Such workspaces
will include appropriate collaboration tools and be designed according to sound psy-
chological theories and principles.It is well established that people are extrinsically mo-
tivatedby rewardsystems,evaluations,and the opinionsothers have of them
(Herzberg,1966).Self-determination theory (Ryan and Deci,2017)holds thatjustas
frequently people are motivated from within – by their interests,curiosity,concern for
others,and abiding values.Following self-determination theory,jobs must be designed
so that they meet the core psychologicalneeds of competence,relatedness,and auton-
omy.Such designs foster the most volitionaland high-quality forms ofmotivation and
positive work outcomes,including enhanced performance,persistence,and creativity.
Conversely,the degree to which any of these basic psychological needs is unsupported or
thwarted in an organizationalcontextwill havea detrimentalimpacton people’s
well-being and performance in that setting.
The individualcapabilitiesof actorsmustbe turned into collective capabilities in
order for the organization to operate at its desired scale and speed.The development
of organizationalcapabilitiesoccursthrough a managed learning processin which
individuals,technology,and organizationalculture evolve together (Langer,2017).At
Valve Corporation,a digitaldistribution platform thatoperates with few hierarchical
mechanisms,organizationalcapabilities are developed along actor-oriented lines (Felin
and Powell,2016).First,Valve recruits individuals who,in their estimation,have the
capacity to create value in a marketplace of ideas.Second,those actors are allowed to
Table 4 Work skills required by an actor-oriented digitalorganization
Sense-making
Ability to determine the deeper meaning or significance of what is being expressed
SocialIntelligence
Ability to connect to others in a deep and direct way,to sense and stimulate reactions and
desired interactions
Cross-culturalCompetency
Ability to operate in different culturalsettings
ComputationalThinking
Ability to translate large amounts of data into abstract concepts and to understand data-based reasoning
Media Literacy
Ability to critically assess and develop content that uses new media forms and to leverage these
media for persuasive communication
Trans-disciplinarity
Literacy in and ability to understand concepts across multiple disciplines
Design Mindset
Ability to represent and develop tasks and work processes for desired outcomes
Cognitive Load Management
Ability to discriminate and filter information for importance,and to understand how to maximize
cognitive functioning using a variety of tools and techniques
VirtualCollaboration
Ability to work productively,drive engagement,and contribute as a member of a virtualteam
Source:https://www.sfu.ca/career/WCID/iftf_futureworkskills.html
Snow et al.Journalof Organization Design (2017) 6:7 Page 9 of 13

self-select the projects on which they want to work.Third,a new project can be started
if at least three peers agree that it is worthwhile (the “rule ofthree”).Fourth,project
teams are empowered to sense,shape,and seize their own market opportunities.It is
expected thatteamswill engagewith externalstakeholdersvia open innovation
methods such as crowdsourcing,user communities,innovation contests,and so on.
Historically,organizations have been populated by humans using tools and equip-
ment to accomplish their tasks.Increasingly,human actors work collaboratively with
digitalagents such as robots,adding a digital actor to the organization.Newer robots
with abilities in socialinteraction are able to learn from their human counterparts
through cooperation and tutelage (Green et al.2008).Effective collaboration requires
human and digitalagentsto share goalsand situation awarenessas well as the
capability to communicate directly with one another.
Commons that support collaboration
Designing commons for a digitalorganization willbe specific to each organization
and its needs,but two commons in particular deserve attention:situation awareness
and knowledge.To be effective,actors need a shared awareness of the resources and
activities in their environment.For example,in the self-dialysis clinic atthe Ryhov
Hospitalin Sweden,all dialysispatientsshare a common electronic calendarthat
allows them to schedule their own treatment sessions.In addition,the equipment of
the center is designed in a way that allows patients to perform their own treatment.
The roles ofthe actors in this example are differentfrom those ofa hierarchically
organized treatment center.Here patients self-organize their treatment while doctors
and nurses use shared information about the patient’s condition to intervene only if
necessary (IHIAnnual Report,2012).Functionality thatsupportsshared situation
awareness is emerging across a wide variety of software platforms.Such platforms are
extensively used by military organizations and advanced technology firms for collab-
orative problem solving and decision-making(Kolfschotenand Briggs, 2015;
Nunamaker etal. 2009).Severalrecentsoftware platforms supportprojectmanage-
ment, and office productivitytools increasinglysupport real-timecollaboration
around documents and spreadsheets.Galbraith (2010)provides an accountof how
Procter & Gamble uses a collaborative spreadsheet program to speed up the reconcili-
ation of corporate plans and budgets.
A knowledge commons is information and data thatis shared by the actors who
make up the organization.It is typicalto distinguish between declarative and proced-
ural knowledge (Kogutand Zander,1992).Declarative knowledge is factualwhereas
proceduralknowledge is know-how.For example,the Open Source Drug Discovery
community maintains declarative knowledge in a repository of allscientific discoveries
made by its members (Kolbjørnsrud,2017).This allows allcontributors to have a real-
time awareness of the problem state (Newell and Simon,1972) – how far the members
of the community have come toward a solution and the knowledge gaps that stillneed
to be closed.Many consulting firms,such as Accenture,maintain proceduralknow-
ledge ofthe bestpractices used by their consultantteams (Langer and Yorks,2013).
The overallpurpose ofa proceduralcommons is to provide a set ofshared resources
that helps an organization learn and adapt.
Snow et al.Journalof Organization Design (2017) 6:7 Page 10 of 13

In a given digital organization,all actors may not use the entire commons.Some soft-
ware platforms allow the commons to be subdivided such that actors can collaborate
around selected subsets.Subdivision of the commons permits actors to use only those
resources relevant to their task and situation.
Protocols,processes,and infrastructures that connect and guide actors
Guiding interactionsamong actorsand accessing commonsrequire protocolsthat
reduce ambiguity and increase the effectiveness and efficiency of interaction.There are
self-organizing processes associated with each protocolthatactors follow in order to
achieve controland coordination.In a digitalorganization,actors use their collaborative
tools to signal both the tasks to be done and the availability of resources to perform them.
Although protocols are specific to the type ofcollaboration,there are commonalities.
Military and emergency response platforms,for example,have protocols and processes
for publishing updates to the situation awareness database and subscribing to particular
types of information,such as new events occurring in a geographic area (DeMarco,2016;
Liang and Gao,2010).Similarly,platforms for collaborative project management (Chen
et al.2003) have protocols for inviting collaborators,sharing information about the whole
project or particular tasks,and alerting collaborators to changes affecting their portion of
the project(c.f. www.smartsheet.com).The infrastructurethat allowsthe actorsto
connect with one another consists of communication networks and computer servers.
Conclusion
Digitalorganizationsare increasing in both numbersand sophistication.We have
described how digital technologies can be integrated into organizations and have shown
how actor-oriented principlesand designscan be used to organizeand perform
activities.Actor-oriented digitalorganizationsare collaborative,agile,and minimally
hierarchical.In many industries,they are populated by human and digitalagents who
work together collaboratively.Digital organizations need technologically aware and adept
leaders who can set the digital agenda and create the context for the digitization of every
relevant aspect oftheir organizations.Digitization is occurring at an accelerating pace;
successful leaders need to synchronize their organizations to digital clock speed.
Endnote
1This section draws extensively on an article thatintroduced the actor-oriented
framework (Fjeldstad et al.2012).
Acknowledgements
The authors thank John Colman for helpfulcomments to the “Ants Foraging for Food” example.
Authors’contributions
ODD and CCS developed the actor-oriented framework discussed in the article.AML has written books and articles on
digitaltechnologies and how to incorporate them into companies and other types of organizations.Allthree authors
read and approved the finalmanuscript.
Competing interests
The authors declare that they have no competing interests.
Publisher’s Note
Springer Nature remains neutralwith regard to jurisdictionalclaims in published maps and institutionalaffiliations.
Snow et al.Journalof Organization Design (2017) 6:7 Page 11 of 13

Author details
1Department of Management and Organization,SmealCollege of Business,Pennsylvania State University,University
Park,Pennsylvania PA 16802,USA.2BINorwegian Business School,Oslo,Norway.3Department of Decision,Risk,and
Operations Management,Schoolof Business,Columbia University,New York NY 10027,USA.
Received:23 November 2016 Accepted:2 May 2017
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