The 21st Century Organisational Paradigm
Table taken from “Managing change to win in today’s global village”, 5 & 6 February 1999.
|20th Century||21st Century|
|Stability and Predictability||Discontinous change, continuous improvement|
|Size and scale||Speed and responsivness|
|Top-down “command and control”||Empowerment; leadership from everybody|
|Organisational rigidity||“Virtual” organisations, permanent flexibility|
|Control by rules and hierarchy||Control by vision and values|
|Information closely guarded||Information shared|
|Rational, quantitative analysis||Creativity, intuition|
|Need for certainty||Tolerance of ambiguity|
|Reactive; risk-averse||Proactive; entrepreneurial|
|Process driven||Results driven|
|Corporate independence and autonomy||Interdependance; strategic alliances|
|Vertical integration||“Virtual” integration|
|Internal organisational focus||Focus on competitive environment|
|Domestic market orientation||International focus|
|Competitive advantage||Collaborative advantage|
|Sustainable competitive advantage||Hyper-competitive, constant reinvention of advantage|
|Competiting for todays market||Creating tommorrow’s markets|
The shift in paradigm fits a lot with other work stipulating the rise of the knowledge economy. How the organisations of the future will be very different from those of the past. Where reliance on human capital will be key to ensuring that your firm stays current in the race for competitive advantage, or as the table mentions is an environment of hyper-competition where firms are required to constantly reinvent advantage. This fits with “Blue Ocean Strategy” where you have to constantly compete by inventing market space, where innovation and risk-taking is valued.
This paradigm is visible in the technology sector, however, has it made inroads into more conventional sectors. I would argue that it has. GE now does local research in places like India and China, and the stripped down products are sold across the world as they provide greater value. Companies like 37signals which started life as a web design firm is now one of the most competitive web applications firms in the world, and according to founders’ book Rework had only 16 employees in 2 different continents who managed a company which made multi-million dollar profits annually.