Publication number: ELQ-37127-1
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How to Reinvent Your Organization Before the Changing Market Drives You Into Obscurity
How companies today can deliver radically greater value in fast-changing markets.
Introduction
In my current role as a business consultant, I still find that most companies, large and small, organize themselves wholly based on what goes on inside the company, rather than looking outside – at their networks, their partners, and the niche they wish to dominate. The result is a hierarchy and a static group of silos that doesn’t adapt to market changes and competitors.
In fact, it is so tough to reinvent a legacy organization, that new businesses, such as Amazon, Apple, and Alibaba, are rapidly replacing former powerhouses, including Blockbuster, Sears, and Nokia. According to experts, as many as 50 percent of the existing S&P 500 companies will be pushed aside in the next 10 years, and the lifespan of traditional organizations is getting shorter.
Thus I was impressed with the dynamic new organizational approach outlined in a new book, “Reinventing the Organization,” by Arthur Yeung and Dave Ulrich. These authors are widely recognized, both in the U.S. and China, as thought leaders in this area, so their framework for reinventing your business organization, with some of my own insights, is definitely worth a look:
- Step n°1 |
Environment: Fund a group to track market changes.
Not many businesses today spend any real resources, or organizational focus, on understanding and anticipating the changing forces facing every industry and business. We all need a well-defined and systematic approach for keeping up with today’s fast changing market environment.
For example, not many of the big retail store chains, including Sears and Macys, had any tracking of how quickly online shopping was changing the environment, until Amazon and Alibaba became bigger than most brick and mortar retailers in their best years combined.
- Step n°2 |
Strategy: Define an execution pathway for growth.
All businesses I know will tell you they have a strategy for growth, but I often have a hard time finding any group or silo really incented and measured on growth targets. The challenge is a growth rate greater than the market and new competitors, and a process to implement growth at that rate.
While Amazon was growing at an average rate of twenty-five percent per year in each of the last five years, most of the big retailers found their business shrinking every year, and despite their best efforts, had no organizational ability or process to turn it around.
