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“… find ways to delegate authority, get information directly from the front lines, and make decisions based on a real-time understanding of what’s happening on the ground. Instead of the old approach of “making a plan and sticking to it,” which led to centralized strategic planning around fixed time horizons, we believe in “setting a direction and testing to it,” treating the whole organization as a team that is experimenting its way to success.”
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Stanford
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As a follow up on construction/deconstruction thinking Part 1 I will address its impact on the actual structure & operations of businesses.
First. I tend to believe everyone in business understands that the traditional structural organization is changing. And it is doing so painfully and expensively. The change is most typically associated with the transformation associated with infrastructure and technology.
Second. This organizational structural change is tied to the wrong thing. Currently, it is being tied to changes as dictated by technology and it SHOULD be tied to thinking construct. The good news is that, regardless of the reason, … the change will be a long arduous shift in the business world as part of a long transition in how business thinks about itself and the best model for conducting a successful business. The bad news is that the businesses that do not adapt are unlikely to survive in the longer term.
This comes down to one basic thought as I discuss the new business model for businesses – however great the costs of this construct change the costs of not changing is much higher.
Anyway.
I described this new business model and thinking back in august 2010 as a more agile organization culture, controlled autonomy, the company has an ability to blend into the marketplace.
Today’s more rigid ‘construction model’, most typically embodied in a hierarchy, is already outdated. And even by ‘updating’ thru accommodating technology what is being built is more a Frankenstein <let’s insert new thinking & new technology within existing company model constructed to enable a different way of thinking/doing> rather than a concept built from scratch. The future deconstruction model, let’s say it’s a hybrid of a ‘controlled autonomy’ model, is being built in ‘fits & starts’ in today’s business world.
To be clear.
In my eyes the new model incorporates both autonomy & control, therefore, is not a flat organization nor is it purely ‘instinctually based’.
Autonomy in any organization is a combination of control and trust. This more agile organization essentially believes, and trusts, employees want to do well and to do good things, therefore, incorporating a strong value/integrity base into the everyday behavioral attitude.
By the way, this freaks out an older management generation. But the smarter more adaptable management have used this ‘ethical core’ philosophy as a way to move from input-driven work models to structures which focus more on evaluating outcomes and acting upon outcomes.
This reflects a shift in an organization culture driven by systemic behavior-driven values and guiding principles.
Inevitably this permits more autonomy, better strategic tactics and more fluid responses to customer input … without compromising the culture of the business. This Deconstruction Business Model is more a … well … porous business model.
It is free-thinking, adaptable, emergent, diverse & interpretive based … where the organizational actions rhythm is created by external stimuli … not internally.
Conversely … a Construction Business Model is all about the system. All about rigid systems with space built within for ‘innovation and flexibility.’ In actuality in today’s world, the systems cramp and are confined. The construction model dictates the organizational rhythm and hopes it can match the behavior patterns of the outside world.
In effect, a Construction Model was developed with the intent for ‘predictability’ with the overall approach intended to stabilize demand and make it more predictable. Internally it focused on ensuring managers at all levels had enough information to manage their part of the business. It is basically a centralized administration/management and decentralized operations where the ‘center’ measures, monitors and directs.
Most companies still do this.
What makes the Construction Model even worse for agility & adaptability is that the Center maintains the setting and control of budgets and ultimately measures performance against this. If the market, and the world, were stable and reasonably predictable this could work but with unstable and often shifting markets this model is not only inefficient … it is ineffective.
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This post previously published on Enlightened Conflict and is republished with the permission of the author.
After 20 years in advertising, I've heard stories from everyday people of all ages from all corners of the universe. How people think and what they do are the greatest stories one can ever tell. I speak as a pragmatic optimist with an eye toward business.
