What’s Happening In The Business Environment?
Very Scary World
The image makes me laugh but of course what it mocks is not one bit funny. And what I want to talk about is business viability, which is challenging but not in the least life-threatening. I said in my last post that I would summarise the three elements of smart organising. The first is ‘know what is happening outside the business’. What is happening is seismic and was the case even before the global financial crisis. Here’s just some of what is happening:
Shift From Industrial To Service / Knowledge Industries
(1) The shift from an industrial to a service-based design / knowledge economy. One of the least understood implications of this shift is that the physical workplace is becoming key in leveraging conversations, social learning, collaboration and contemplation. Actually, that is not accurate. Architects, furniture designers and facilities managers are waking up to how workplace design influences performance. Strategic HR is largely missing this trend (there are exceptions).
Baby Boomers Retire and Gen Y Arrive
(2) As knowledge and experience walk out the door, an inexperienced but greedy-for-learning, tech-savvy, connected, networked and social generation replaces them. There’s a lot of tosh talked about Gen Y (frankly). This is not a homogenous group of Stepford-wife automatons who think and act alike. But when you have a rigorous sociologist like Manual Castells saying that, tentatively and from research data, it is possible to detect ‘networked sociability’ in this new generation then something is going on. We know it from the evidence of our own eyes anyway. Result? No more management as usual. This from the FT:
“As the next generation of employees enters the workplace, their demands are likely to become more strident, making the provision of social networking tools critical to businesses looking to attract the best and brightest”.
This and their demands for a new reality of work, seeking choice in where, how and when they work, will change how managers manage and how businesses do things.
Changing World, Changing Capabilities
(3) Large companies are fragmenting into eco‐systems of alliances and partnerships, and shifting their centre of gravity to other parts of the world. They are beginning to look and behave like social networks. What does this mean? It means that business are having to develop capabilities and skills to enable their people to collaborate across multiple boundaries ‐ organisational, professional and cultural. Managers are having to learn to manage by negotiation and cajoling; command and control is no longer appropriate. From IBM’s 2008 Adaptable Workforce report:
“Our findings suggest that three key capabilities influence the workforce’s ability to change … they must be able to collaborate across their organizations, connecting individuals and groups that are separated by organizational boundaries, time zones and cultures.”
The Global Workplace
(4) National borders are increasingly meaningless in how businesses operate: enterprises and job roles go wherever skilled people happen to be. Workplaces are reforming virtually online.
This post is already too long so I will write another a separate post about the technologies driving the globally integrated enterprise (credit to Sam Palmisano, CEO of IBM for that term) and the resulting cultural mashup.
there is another layer of (in)security that will also cause seismic change (and offer opportunities in the face of challenge): all of the trends mentioned in the blog above are going to interact and intersect in interesting and probably quite difficult to predict ways with the new energy & environmental phenomena of the 21st century. huge changes will start to occur in global and national economies as world oil output declines causing extreme price volatility and shifts in transport infrastructure and practice. further complicating the oil decline picture will be increasing attempts to price carbon by some means or other (there are differing and competing tax or market methods). these factors will produce many unintended consequences, possibly including new economic bubbles (hopefully smaller and less destructive than the current one).
I think it will also be fascinating to see whether companies have the agility to respond to such seismic changes while retaining the idea of themselves as corporations. Personally, I don’t think corporate structures can successfully remain the same as the world moves away from the traditional hide-bound notions of what makes a company. Many will try, of course, and cling to the life rafts long after they’re nestling on the bottom of the sea-bed. I believe organisation and co-operation needs to take place at levels well below the normal A&M mentality – almost negating the corporate structure by default.
In my recent conversations with colleagues in large organisations I detect a real sense of fear that their organisational forms are less viable. And this seems to be apparent across all sectors.
Of course, this could be because they are talking to me and they recognise my views and business practice. Or… perhaps they detect that the seismic shift is close?
My fear is that we will consign people to the scrap heap in alarming numbers as many of the ‘older’ generation do not have the ‘nous’ to network well and the ‘younger’ generation have yet to translate social networks into productive business organisational forms.
Or perhaps this is just an ‘oldie’ speaking!
Steve
Thank you all very much for the taking the time to offer such hugely insighful comments. Where to begin in response?
Julian – “How these trends interact and intersect with the energy & environmental phenomena of the 21st C”. Exactly. In this report on the greening of work from The Work Foundation (http://tinyurl.com/ox535y), the author says “for many people climate change seems such a large problem that it overwhelms them”.
Practically, I worked with manufacturers who used energy audits to great effect. Being able to identify and quantify sources of energy use and waste changes behaviour. This is going to be particularly pertinent for the younger generation, already choosy about seeking employers with demonstrable values – I expect them to include environmental and energy awareness in their shopping list of things they look for in an employer.
Having said that, young people need to made aware of issues around ‘decarbonised working’. Their preferences for flexible work and digital connectedness carry envoironmental costs, as this recent article from in the Guardian suggests:
http://www.guardian.co.uk/environment/blog/2009/jun/23/teleworking-carbon-emissions
Steve and Graham – “retaining the idea of themselves as corporations”. Interesting that you are picking up this fear of viability of changing organisational forms, Steve. I wonder if their fear is for operational integrity or for loss of identity?
My initial thought is that the Japanese auto manufacturers clearly demonstrate that it is possible to retain both. I became aware of this at Cranfield, when some of my fellow researchers were working with Nissan. 80% of car components are made in the supply chain (eco-system). The auto makers assemble the bits and yet Nissan retains the identity. The Japanese auto makers also show how to manage agile, distributed structures made up of multi-tiered configurations. John Seely-Brown talks about Toyota’s ‘learning architectures’ in a podcast link you included in one of your blog posts, Graham. I will see if I can find the link.
Steve – “My fear is that we will consign people to the scrap heap in alarming numbers”. Yes and unforunately it was ever thus. I wrote about this on an earlier post, G20 Reflections. I noted that industrial decline in Scotland has been replaced 30 years later by thriving knowledge industries (bio-tech and gaming). It is a new generation that benefits. Meanwhile, a whole generation of men in their 60s and over drink themselves to death.