How to design Corporate of Future ? (Phase I)
As I always say, change is a new normal. In the market, we see lots of changes under umbrella of digitalization. New business models, new organizational structures, new legal entities, new holding types, new M&As, startup ecosystem and so on. I suggest that we take every important item and let’s design an utopian company of future. What would be the content ? I will mention this just now and maybe move on with new ingredients later again.
How to deal with ideas in a company ? Did you establish a good platform that people can honestly talk about their ideas, speak up ? What do we do with capital ? Where to invest ? Who is our new stakeholders ? What is the right go to market approach / access towards our customers ? What is the right organizational structure, reporting lines ? How to enable a platform for change and evolution ? How to create impact / influence in society ? What happens in risk environment ? So on…
These are today’s questions which I believe that it is not going to change ever. 1800s, the companies were looking for the same but the method to tackle was different. They created big structures, and reporting lines, responsibility matrixes, idea generation platforms and others. Now, basic idea is same but the environment is totally different. New world’s common platform is internet. New generation is Y-Z. There are new big companies who are relatively young. People are the same. So, new structure / design of the future for the companies plays critical role. For that reason, we should constantly think about designing the corporate of future.
Before starting a new project, you normally outline the draft. This is same like organizational structures in corporates. Before designing the corporate, we should use somehow an organizational structure. Let's start this at first. Imagine we do not have any reporting lines anymore. That does not mean nobody is responsible. Imagine that we work with different titles / responsibilities in different areas within company. E.g. I can be a strategy person at the same time a salesman, and maybe even HR. There is no limit. The limit is only your competency and time you want to allocate for your career. That brings huge flexibility. Every individual has different career purposes and driving force. One person would like to work 6 hours and other one 12 hours. Company needs to utilize each of them in motivated way. Stats show if one person successful in one area, the probability of being successful in different department is much bigger as well. Today, we do rotations and limit people’s energy for different roles. Lets give freedom to them to choose any role in company. Only important thing is a proper competency analysis. Second important thing is creating no tangible departments, only bubbles so that they survive if corporate needs them. When it is outdated, you delete the bubble and create new ones. Sometimes you need Project management or sustainability, or sales back offices. In old school, you create them and leave them or not to proper timing to delete them because of habits. To do things faster, you create which bubble you need (e.g. sales focused on BtG, or digitalization office, …). Another thing can be compensation. You do that totally flexible and transparent. I still do not understand why we do not show each employee who earns how much. Benefits of this are more than shortages. And totally less bubbles and topics and more virtual teams. We should focus on more diverse people in the bubbles and promote one leader who can change constantly. The most competent people will be the ones who link the bubbles each other in best way. This is what I strongly believe in next phase. In summary, to focus on agile systems in organizations is critical for designing the future of companies.
Capital topic…Today’s distribution of budgeting for your capital is classical. You reserve your capital some for employment, some for marketing, fixed costs and others. We need some drastic change over there as well. You should focus more on different models like sharing your capital for JVs, start ups, growing regions, and others…What you can do is to create a Venture Capital company within your company. That will be a must for tomorrow’s business. Since you cannot only focus on one area and try to grow. That is risky. You should split your capital to venture capital and try to invest in various areas and have your own basket of investment. Then in total, you will try to win via your basket. That is something like having investment on stocks. I recommend 3 levels on capital management. First one is only focusing on your core business. Second one is to create new markets. Third level is venture capital. This 3 Level approach is the best of managing your capital.
Let me stop here and move one other important topics for this umbrella in another writing. There are of course a lot to mention if we talk about the corporate of future. I strongly believe that next generation CEO needs to think how to design the company and pays utmost importance to “design” topic.