Evolutionand Choices in
Organizational Structures
Evolutionand Choices in
Organizational Structures
Harold V. AnagnosHarold V. Anagnos
March 2011March 2011
Evolution in Organizational StructuresSnapshot of Status Quo
Evolution in Organizational StructuresSnapshot of Status Quo
Established businesses need to invent and innovate intensely and overcome complacency and inertia.
Natural Selection goes on. Organizations compete for resources .The adaptive ones survive. The strong loose out to those that can adapt.
Competitive forces drive innovation for market share but inertia gets in the way.
Inertia needs to be confronted, dealt with and pushed aside. Innovation needs to be defined, detailed and executed. Inventions should stay within a defined arena.
Established businesses need to invent and innovate intensely and overcome complacency and inertia.
Natural Selection goes on. Organizations compete for resources .The adaptive ones survive. The strong loose out to those that can adapt.
Competitive forces drive innovation for market share but inertia gets in the way.
Inertia needs to be confronted, dealt with and pushed aside. Innovation needs to be defined, detailed and executed. Inventions should stay within a defined arena.
Complex systems businesses over time yield to volume operators and allow them to commoditize categories created by them. They respond by creating the next level complex systems or cease to exist.
Evolution goes on and most volume operations overthrow complex systems from the market.
Volume operators supply the commodity type essential elements that enable the next level of invention and innovation for complex system operations.
Complex systems businesses over time yield to volume operators and allow them to commoditize categories created by them. They respond by creating the next level complex systems or cease to exist.
Evolution goes on and most volume operations overthrow complex systems from the market.
Volume operators supply the commodity type essential elements that enable the next level of invention and innovation for complex system operations.
Evolution in Organizational StructuresSnapshot of Status Quo
Evolution in Organizational StructuresSnapshot of Status Quo
The two models are:1. Enterprise (Complex Model)
a. Engage targeted customers.c. Develops complex method logisticsc. Margins improve as value chains developd. Simplification of value chains to improve service,delivery and margins
2. The consumer (volume operations) modela Organizes around products and technologiesb. Forced volume growth through explosion in transactionsc. Companies must adopt one or the other and defend their choice.
Optimize for dominating style and avoid blending the two.
The two models are:1. Enterprise (Complex Model)
a. Engage targeted customers.c. Develops complex method logisticsc. Margins improve as value chains developd. Simplification of value chains to improve service,delivery and margins
2. The consumer (volume operations) modela Organizes around products and technologiesb. Forced volume growth through explosion in transactionsc. Companies must adopt one or the other and defend their choice.
Optimize for dominating style and avoid blending the two.
Evolution in Organizational StructuresEvolution in Organizational Structures
Enterprise ModelsComplex Organization
Enterprise ModelsComplex Organization
1st 2nd 3rd 4th 5th
Main Platform Architecture
Solutions Architecture (Vertical Markets)
Integrated Platform
EstablishedLine I
EstablishedLine II
EstablishedLine III
EstablishedLine IV
Typically High Margin Models 40-60%
SolutionsSales Force
Business ApplicationsPackaged Services
TargetingCustomers
(CO)(CO)
Volume Operations ModelVolume Operations Model
CoreTechnology
&Products
1
2
34
5
OFFER OFFER
OF
FE
R
OFFER
OF
FE
R
Outsourcing
Co-Opitition Infrastru
cture
No
n-C
oreN
on
-Co
re
Distribution
Ch
ann
elsW
ho
lesa
lers
Channel Partners
Advertising
Ad
vert
isin
g
BrandingFunctional
Properties
Sym
bolic Properties Fu
nctio
nal
Prop
ertie
s
Symbolic P
roperti
es
Brand
Bra
nd
Advertising
Brand
Web
Site
Web Traffic
Ad
vertising
End Users
Consumers
Ret
ail o
r E
nd
Use
rs
End U
sers
End Users
Consum
ers
OFFERS 1-5Sequential products in
evolutionary series
OFFERS 1-5Sequential products in
evolutionary series
1. Advertise and Promote
Functional Properties
2. Brand and Promote
Emotions and Symbolism
1. Advertise and Promote
Functional Properties
2. Brand and Promote
Emotions and Symbolism
(VO)(VO)
Lower Margins / Higher VolumesLower Margins / Higher Volumes
Value Delivering Chains
Enterprise ModelDifferences in Deployment
Enterprise ModelDifferences in Deployment
R & D Qualitative AnalysesBest of Breed, Inventive
Quantitative AnalysesInnovative, Cost Driven
Product Design Integrative ArchitectureBring All Together at the End
Modular StructureSnap Together
Building Adaptive and Flexible Methods Processes Determined and Followed, Process Control
Marketing Emphasis on Creating a Reliable Volume Chain. Brands are built by WOM. Communicate success!!
Branding and PromotingFunctional and Symbolic Properties (Features and Benefits)
Selling High TouchOne on One Highly Engaged
Low Touch, High TechHeavy Distribution Share
Servicing Consultative, SupportivePerpetual Dialog
Expedient Transactional Loops
Complex Volume Operations
The ModelsThe ModelsEnterprise Complex System
IBM, Boeing, SAP, Airbus, Lucent
Volume Operations Nestle, P&G, Nike, Dell, Sony, eBay, Hertz, UA, and Google
Hybrids - success varies (Mix vs. Blend) HP, J&J, Nokia, MOT, GE, Cisco
Enterprise Complex System IBM, Boeing, SAP, Airbus, Lucent
Volume Operations Nestle, P&G, Nike, Dell, Sony, eBay, Hertz, UA, and Google
Hybrids - success varies (Mix vs. Blend) HP, J&J, Nokia, MOT, GE, Cisco
Volume
Complex
1. There is no third model - must choose one
2. Mix and Match Yes! - but keep cleanly separate
3. Blend together No! - No!
4. Can front load and back end
1. There is no third model - must choose one
2. Mix and Match Yes! - but keep cleanly separate
3. Blend together No! - No!
4. Can front load and back end
Organizational StructuresOrganizational StructuresVolumeVolumeComplexComplex
VolumeComplex
Global IssuesGlobal Issues China
Playing the Volume game but a bubble is building with over capacity and quality shortcuts.
Japan Migrating to Complex Systems with China becoming their Volume
complementary partner. Korea
Playing a hedge game focusing the Chaebols on the consumer and creating strong brands with the help of US brain power.
India Struggling with decisions. Culture is leaning towards Complex
Systems while market is favoring Volume. Watch out for who will win and how they will mix.
China Playing the Volume game but a bubble is building with over capacity
and quality shortcuts. Japan
Migrating to Complex Systems with China becoming their Volume complementary partner.
Korea Playing a hedge game focusing the Chaebols on the consumer and
creating strong brands with the help of US brain power. India
Struggling with decisions. Culture is leaning towards Complex Systems while market is favoring Volume. Watch out for who will win and how they will mix.
Global IssuesGlobal Issues USA
Business culture favors Complex Systems but slowing down of innovation is hurting Volume Models (In atoms not in bytes)
Costs force outsourcing the middle layer of Complex Systems. Differentiation rests on Technology and Branding. Low cost economies can attack technologies but not well established
brands. IP protection is crucial. Paradoxically culture likes consumer goods
with IP content at low prices. Digital goods are still alive. IP protection and branding is a must for this
category. Marketing and Innovation remain the core competencies to grow upon.
USA Business culture favors Complex Systems but slowing down of
innovation is hurting Volume Models (In atoms not in bytes) Costs force outsourcing the middle layer of Complex Systems. Differentiation rests on Technology and Branding. Low cost economies can attack technologies but not well established
brands. IP protection is crucial. Paradoxically culture likes consumer goods
with IP content at low prices. Digital goods are still alive. IP protection and branding is a must for this
category. Marketing and Innovation remain the core competencies to grow upon.