| FROM OUR EXPERIENCE |
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| From ninja warriors to Al-Qaeda: the business model of the future is changing? II |
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As we promised in the first part of the article regarding network organizations we will begin to assess the impact this new trend will have on the business environment. What kind of changes can we implement in our company in order to make it more flexible? How can we apply this concept in our own organization? More about this in the article.
What will its impact be in business?
I think some companies will only now just realize how much they can optimize the business equation they used in the past but which, due to the comfort provided by continuous market growth, wasn't really looked at. And it is very likely that in the coming years we will see adjustments taking place in such companies in the way of outsourcing certain activities, reducing organizational ballast (fixed means, structures and systems, processes and procedures) or even turning towards a delegative organizational structure, in which employees are empowered to make decisions at a local level, within certain limits, so that business processes won't suffer.
Scenario:
A company in the services area that up till now had:
- their own central headquarters (let's say they paid for it themselves)
- more than 200 employees with fixed salaries, bonuses being offered only to those in sales
- had a network of branches, each paid for by HQ, with at least 3 employees and automobiles
- had a turnover of several million euro
And let's say that stockholders realize it's time to change something because:
- the market they are in decreased by 60%
- they are unable to pay salaries on time, due to the fact that bills aren't paid on time or even due to lack of contracts
- some of their key employees have left the company, due to the fact that salary wasn't enough
How would the company look if stockholders decide to:
- reinvent the business equation and adjust services so that their development cycle is relaunched or even aimed at new areas of the market that hadn't even been looked at before (based on the principle that "any money is good money")
- have a complete overhaul of their organizational structure, renouncing formal hierarchy and introducing one based on performance, based on rewards for results not time spent in the company
- outsource administrative services towards employees that have set up their own companies and become favored suppliers or to other companies
- put together a variable reward system, based on results and returns, not just on contracts
- ease the ballast of their internal communication system by giving up costly IT solutions and transforming them into a community, in which everybody can contribute and anyone in the system can access the information no matter where they are
- let employees work from home and that there is no need for them to be present at work, they are assed and rewarded depending on the way they respect deadlines and project parameters
- part of their marketing efforts are focused on the online environment, by using all the channels that can bring an added benefit in terms of brand awareness or maybe even clients (online communities, blogs, social networks)
I stop here with this scenario and mention, as they do in controversial movies, that there is no connection to any certain company. But...any of these decisions can be implemented in an environment that is focused on organizing itself as a network. Adapted, of course, to the business at hand.
And what if somebody says that:
- this sort of network organization isn't for every company - I'd say he's right, it depends; the question is how you can use the network principle and apply it in your own environment, it's not about karaoke business (or Copy-Paste, for those that find this sort of formula more appealing)
- you lose team spirit - I'd say that in order for a team to perform there is no need for perfection between team member relations or that we must have monthly team buildings in order for people to feel good and work more efficiently; it takes effective decision making processes, so that team members feel they are productive and rewarded based on this productivity; and sometimes it's more comfortable saying that the team isn't doing well because there is no team spirit instead of admitting that meetings are inefficient or decisions are being postponed
- people won't socialize as much - I'd say he's right: the purpose of a network organization isn't that of socializing but of being efficient; in other words, people want to work in a network organization because they spend less time with better results; and if an employee has more personal time because of that, he can socialize with his colleagues after work
In the end the major challenge in a network organization is how much balance can we bring between the two forces that manifest themselves: centrifugal and centripetal. In a classic view, centrifugal energy means processes, procedures, rules, limiting autonomy, company policy. This drives away employees and turns them into robots that work for a salary and don't like what they do. When talking about a network organization, we should take a look at the fact that some of these centrifugal components will disappear or alter, therefore the questions will be:
- How do we compensate so as not to unbalance the system?
- What are those centripetal forces that make an employee work hard, contribute to the network and bring results?
- How can we ensure that we won't have to control everything but not relinquish it?
- How can we motivate people to contribute within the organization without necessarily asking for immediate pay (similarly to members of communities such as Wikipedia)?
- How can we mechanize certain processes through delegation, so that we don't have to execute them from the HQ and they are under the almost total control of certain employees that know how and why they do this and respect deadlines?
- How can we give up part of the central identity of the organization and help our network members develop and create their own identity, thus being motivated to be part of it?
- How can we gain more personal time?
I leave you to meditate over these questions, especially the last one, that seems to me as being the sum of all the others. And wonder why you should make this transition: just because this certain period requires it, because it's cool or because you sincerely want to have more time for yourself and your family?
There is life after work... You just have to decide whether you want to have that one too...
Rares Manolescu
Senior Manager |
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Human Invest is a Premier League company in the arena of training and organizational development consultancy services, present on the Romanian market since 1998.
We are recognized for conceiving and implementing programs which offer managers an authentic experience towards improving their leadership performances, and thus we support companies in becoming more and more engaged in delivering excellent services for their clients.
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