Dramatic Organizational Changes Needed

By Peters, Tom | THE JOURNAL RECORD, July 19, 1990 | Go to article overview

Dramatic Organizational Changes Needed


Peters, Tom, THE JOURNAL RECORD


During a recent seminar, I was asked to summarize the challenges facing companies in the '90s. Here's how I responded.

- The end of hierarchy.

At the half-billion dollar Wisconsin printing firm, Quad/Graphics, just two layers of management separate the chief executive and the new hire. Wal-Mart, The Limited and Benetton zapped traditional retailers for many reasons - but their very flat organizations top the list. The pyramidal organization is fast changing into a network without a clearly defined ``top,'' or even center.

- The corporation as a network of subcontractors.

Kao, Japan's leading package goods company, induces $5 billion in sales from about 6,000 employees; a typical American counterpart, with only twice Kao's sales, has 100,000 people on its payroll. The difference: subcontracting. It amounts to an overall reconception of the corporation as a network of the best providers of services - plant watering, manufacturing, research and development - brought together to perform a marketplace mission. A whole new idea of equality in relationships with outsiders accompanies the change: The corporation shifts from the traditional ``I-centered'' (I call it pre-Copernican) approach to a partner-driven orientation.

- A horizontal/project orientation.

Routinely working across functional barriers becomes ``the way we do business around here.'' Careers are a series of projects. Professional service firms (lawyers, accountants, consultants), which have traditionally used project teams, are emerging as the best organizational models.

- Continuous improvement/continuous learning a way of life.

Workers, ensconced in self-managed teams, will be expected to make things better each day, not just ``show up.'' Smart leaders will reconceive the corporation as a (ital) university (end ital), dedicated to worker learning from day one until retirement.

- Information technology changes everything.

``IT'' is altering all products - from ``smart'' cars to ``smart'' buildings. And for the likes of retailers, sophisticated data bases are as important as the right location. Moreover, IT upends every organizational relationship: Inside the firm, it permits instantaneous communication between functions and demands the empowerment of people at the front line; outside, it fosters seamless connections with vendors, distributors and customers.

- Time-obsessed competition as the strategy for the '90s.

In their book ``Competing Against Time,'' the Boston Consulting Group's George Stalk and Tom Hout observe that 95 to 99.95 percent of the time that we spend ``working on'' something is wasted. ``It takes 20 days to process an application around here,'' we say; but the real ``action'' amounts to more like 20 minutes. …

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