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April 1994 Vol. 3 Issue 3

Modern Organization Structure

The global market is the most complicated phenomenon on earth, and therefore totally  unpredictable. We must create organizations that attempt, at least, to survive by getting close to the market. Staying small enough to shift focus fast.

*ScaIe used to be associated with vertical integration - what you owned. Today, scale and power are associated with YOUR ABILITY TO QUICKLY BRING TO BEAR THE TALENTS OF PEOPLE AND BITS OF ORGANIZATIONS DISPERSED AROUND THE GLOBE."

Tom Peters

A network of small independent specialty companies headed by entrepreneurial management can beat the pants off of "we do everything ourselves" large elephant companies.

The U.S. doesn't want for ideas waiting to be commercialized. The main problem has been in moving innovation to market.

The need for innovation on an unprecedented scale is given. The question is how. It seems that giving the market free rein, inside and outside the firm, is the best - perhaps the only - satisfactory answer. Every market is exploding, microtizing. There isn't enough time to think.

Corporations are most productive when they are composed of no more than 50 people. It has to do with the ability to communicate effectively. Overall size is irrelevant for competitive advantage in the modem era. Networks are changing the definition of big.

Only a passel of fully empowered, coherent, close to the market units will try enough stuff to up the odds of overall success.

Lots of "little starts" success is a numbers game. Work at getting lucky. Reduce layers. Flatten the pyramid. Destroy the hierarchy. All report to all. Get the plant involved. Take advantage of help from outsiders. Make vendor partnerships real.

Speed, responsiveness, independence, these are the watchwords. Feedback loops need to be short. Every person is a business person. Make room for people to become self motivated.

Make sub-contracting a way of life. The chief objective of extensive subcontracting is innovation. The cry from the executive suite should become "prove it can't be subcontracted!"

By definition networks include but are not limited to: 1) Suppliers, 2) Suppliers, suppliers, 3) Distributors, 4) Shareholders, 5) Other middlemen, 6) Customers, 7) Customers, customers, 8) Other specialized resources such as University professors.

Credit: Liberation Management by Tom Peters

1992 Fawcett Columbine

Written by Howard J. Leonhardt



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