Imagine a company where processes only move forward once Legal has finished, Legal only responds after speaking with Operations, Operations wait for Finance’s approval, and Finance prefers to wait for the next executive meeting. If this sounds familiar, congratulations: you may not be in a factory, but you are probably working as if you were on an assembly line.

For more than a century, we have learned to organize companies as if they were factories. This idea did not emerge by chance. In 1913, Henry Ford revolutionized industry with the Ford Model T assembly line: the car moved through a rigid sequence of stations, each worker added a part, and the process only continued once the previous step was completed. It was brilliant for producing millions of identical cars and ended up influencing something far greater than the automotive industry: the way companies began to organize people, departments and decisions.

The problem is that many organizations still operate with this industrial logic in the 21st century. Every decision moves up the hierarchy, every execution waits for validation. It is efficient for predictable tasks, but it often creates the corporate equivalent of a traffic jam on the assembly line. All it takes is for one step to be delayed for the entire system to slow down. Anyone who has tried to launch a new project within a large organization knows this feeling well.

Some business leaders recognized the limits of this model very early on.

Henry Singleton, the legendary CEO of Teledyne, described in the book The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success, built an organization that was almost the opposite of the corporate assembly line. Headquarters was tiny, business units had significant autonomy, and central control focused mainly on capital allocation and financial discipline. Instead of a rigid hierarchical chain, the company functioned more like a set of relatively independent modules.

The automotive industry itself is now reinventing the model it helped create.

• · First came Ford’s sequential assembly line.
• · Then, with the Toyota Motor Corporation production system, refined by Taiichi Ohno, came an obsession with efficiency and continuous flow.
• · In recent decades, modular platforms have emerged, allowing different components to be developed in parallel, used by groups such as Volkswagen Group with MQB, BMW with Clar or Volvo Cars with Spa.
• · And now Tesla is aiming to take an even more radical step with so called unboxed manufacturing: different parts of the car are built simultaneously and only integrated at the end, almost as if assembling a computer.

This industrial evolution is also a powerful metaphor for contemporary management. Organizations that are better adapted to the digital world tend to operate with autonomous teams working in parallel, experimenting quickly and then integrating results. Less assembly line and more modular architecture.

The irony is that many companies continue to organize people and decisions, and attempt to innovate with technologies such as the much-discussed AI, as if they were still assembling a Ford Model T.

In a world of real time data, artificial intelligence and constant innovation, perhaps the most uncomfortable question is not how we produce products and deliver services, but whether we are still doing it like factories from 1913.

Ricardo Tomé, Professor at CATÓLICA-LISBON