Future Structures


Some time ago, I did a series on the enablers required to propel organizations into tViabilityhe future. With the passage of time, and after considerable dialog, the time h
as come to update that point of view. In continuing with this future of business series, the next several posts will provide an updated list and perspective on these enablers. Leaders must effectively manage the exponential forces that drive them on a path to viability. In the absence of a burning platform, the growing gap between these exponential forces and the linear constructs of our day should spur leadership action.To succeed, future of business efforts will institutionalize Digital DNA through an investment in several of the thirteen (13) key enablers of future viability. These enablers and the DNA they help establish are described in the visual below:

In this post, I’ll provide my evolving views on the first enabler; structural change. As Uber and the driverless car are showing us, the next decade is likely to bring significant structural change in the context of society, economies, government, and business. Our current linear structures do not translate well to the exponential world in which we live. This will force governments and businesses to address the structural challenges that lie ahead. How these challenges are addressed will either serve as an accelerant for emerging future scenarios, slow them down, or derail them. In the interest of discussion, pressure on existing structures can be categorized into six broad areas: 

digital-dna-and-enablers

Organizing principles – how we are and will be organized is influenced by a number of factors. Two major factors for future organizing principles are:

  • Vertical to horizontal shift – our vertical value chain and industry structures have been with us a long time. As value creation and capture increasingly have no regard for vertical boundaries, we will see a shift to horizontal ecosystems (e.g. mobility, money, maker, etc.). As this shift occurs, these ecosystems present growth and revenue opportunity, but also create a complex environment that requires collaborative strength
  • Centralized to decentralized – the connectivity that enables a growing number of paradigm shifts will also lead us from centralized constructs to decentralized. Whereas the vertical orientation of our past required centralization, the horizontal orientation of our future is distributed. Renewable energy and 3D Printing are just two examples of this shift towards the decentralization of everything. Innovation accelerators like Blockchain pave the way for autonomous and decentralized organizations

Management paradigms – Gary Hamel famously said that in the last 100 years, the way we manage has hardly changed at all. This is likely to change in the coming decade. The hierarchies of our past will give way to an enabled edge. These command and control structures of our linear past will kill our exponential future if not addressed. This exponential, horizontal, and distributed future requires an enabled edge – fully equipped to interact effectively and contextually, and empowered to make intelligent decisions at the point of interaction 

Operating principles – our intuition must be reset when it comes to the methods of operating that have driven past success. A shift is under way from an asset-heavy to an asset-light mode of operation – Singularity University refers to this as leveraged assets. In effect, Uber, Amazon, and AirBnB have shown that owning assets (cars, buildings, people, etc.) in many industries is no longer an enabler of success – in fact it may be an inhibitor

Operating environment – the environment in which business and government operate has changed considerably. Much has been said about the shift in power to the individual, but more structural issues are at work. One very profound shift is front and center in the banking industry. An unbundling and fragmentation is occurring, where value that was once bundled (newspaper, album, CD, financial products, etc.), is increasingly unbundling, and fragmenting. This fragmentation has led to optimized experiences around niche offerings and sets an expectation for everyone else. A fragmented operating environment represents both opportunity (staying close to consumer needs) and risk (losing market share) 

Organizational tension – in a post on emerging models, I described some recent thinking from the Center for the Edge that focused on business types. Most businesses have three business types (infrastructure, product and services, and customer relationship) bundled within it. There is an inherent tension that exists as a result of conflicting cultures, incentives, and drivers (e.g., scale and scope versus creativity and imagination). Our exponential pace is likely to create a breaking point at which companies look to focus, while accelerating learning. To do so, a potential path is to focus on one business type and leverage the ecosystem for everything else 

Societal progression – this category has massive implications to the economy, governments, and business. Here is a short list of societal issues that will put tremendous pressure on existing structures:

Societal Progression

This is by no means an exhaustive list of structural pressures, but it helps make the notion of structural change real. The first key activity is to understand the type of structural change that is occurring around us, and then execute our own structural change in response. This is a complicated under taking, as long standing institutions like healthcare, education, and governing are all in the path of change. In the short term, understanding shifting organizing principles, management paradigms, and the operating environment should be top of mind for leaders everywhere.

8 thoughts on “Future Structures

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s