Business Trend
Companies such as Apple and Nokia lead the way in placing creativity and direction in the hands of their customers and employees, and are now reaping the rewards
WE THE PEOPLE
TODAY’S WORLD IS MORE GLOBAL, LESS LOCAL.
A JOB IS FOR EXPERIENCE, NOT FOR LIFE.
IS YOUR ORGANISATION ADAPTING – AND THEREBY PROFITING – ACCORDINGLY?
words: martin raymond
WHEN THE EDITOR of Fortune magazine, William Whyte, wrote The Organisation Man, 50 years ago, company structures looked a bit like a pyramid. The old, the grim, the grey and the male resided on top, while the young, the daring and the female lingered somewhere near the bottom.
Now the way we do business is being turned on its head, thanks to the impact of the dotcom boom, a more pro-active consumer, and a twenty- and thirty-something work force that is demanding a more consensual and independent business model.
Already brands and businesses such as BP, Hewlett Packard, L’Oreal, Apple, Microsoft, McKinsey, and Nokia are responding to this shift by breaking down management structures that are top heavy and creating small cluster-like cells or ‘flexi-work’ units that are more autonomous.
These cells work together on global or national projects, sharing agendas and ideas – companies like McKinsey and IBM now have ‘knowledge’ intranets, where successful projects are shared – but are agile enough to work close to consumers on the ground.
According to the InformationWeek Research Survey, more than nine out of ten business and IT executives believe that collaboration across corporate organizations will increase sales opportunities, and about half say it will cut costs.
The trick, says Lynda Gratton, Associate Professor of Organisational Behaviour at the London Business School, is to have a business that is flexible, lean and able to move instantly to accommodate market change. But also to listen.
For Gratton, who is author of The Democratic Enterprise, this is of vital importance. In the old days, she says, the father, or in this case the CEO, knew best. But now, as markets fragment, become more niche, and radicalised, the best CEOs listen and learn from the knowledge being passed up-line. Increasingly they are facilitators and collaborators rather than dictators and drivers.
This is a revolution that has happened in stages. The coming of the internet helped by making the world less global and more local. It reminded consumers that no matter how niche their habits, there were plenty more people like them.
On the back of this, dotcom brands and dotcom working practises, which were flexible, collaborative, niche and increasingly interactive, set in motion the idea that businesses could and should be more customer faced, and that these niche markets could be serviced in a profitable way.
Finally, one of the greatest changes in recent years has been among employees themselves.
While our parents believed that a job should be for life, those in their twenties now believe that a job should be for two years or less. After that they move on – usually to another organization that offers more flexible working conditions, a more creative environment, career sabbaticals, or a chance to implement that ‘killer idea’.
Clever organisations are taking these democratic processes and approaches a step further and embracing them inside and outside their organizations.
At Proctor and Gamble, for example, its Connect+Develop programme, which allows research and development teams to work with outsiders, and in some cases competitors, to develop new products and service ideas, now produces 35% of the company’s innovations. Philips has a website where consumers have been working with in-house designers on products designed to help consumers sleep more effectively. Peugeot uses its bi-annual Concours Design initiative to work with designers globally to come up with new automotive technology.
Austrian drinks manufacturer, Frenkenburger, works with customers to create new flavours for its hemp milk drinks, while Danish beer brand Vores OI creates its beer under a ‘creative commons licence’. Customers can download the formula, improve it, and then send it back to the brand’s tasters and brewers, who, if they like what they taste, adjust subsequence batches accordingly. Nokia have used a similar process via its Concept Lounge to let customers design the kinds of phones they would like, while coffee maker Nespresso has developed the InCar coffee machine by working with customers directly.
The point then is clear; a democratic approach to business isn’t just a matter of improved employee relations, but a way of re-inventing the organisation. But in a way that places the profitability, creativity and direction of the business in the hands of the many, so that solutions are customer (and thus profit) driven, rather than ones that are driven by those who shout loudest.
