Occasionally while scanning through newspapers a particular advertisement will catch my eye. One such ad was for the World Business Forum, sponsored by HSM Solutions. The Forum was held in early October in New York City. The ad, which was published in the Wall Street Journal, featured a number of business management thought leaders and provided a few teasing tidbits from their writings. One of the featured business gurus was Gary Hamel, who answered the question, “So what will the future of management look like?” He wrote:
“There are several core principles around which we are to have to build our new management models. One of the principles is freedom. You can’t have a highly adaptable institution that is overly controlled from the top. A second critical principle is variety. As the world becomes more uncertain, it’s harder to see farther ahead. You can’t make 10- or 20-year strategies. What becomes more important is trying lots of new things — experimenting in low-cost ways continuously — and seeing what works and what doesn’t. So more options, more experimentation, fewer grand visions, fewer strategies would be the second principle. The third principle is that we are going to have to apply the logic of markets inside our organizations more and more. Markets are not infallible, but they are much more effective at allocating resources toward new ideas than hierarchies. In a market, if you decide you want to sell your shares in a company X and invest in company Y, you don’t have to ask anyone else — you just do it. So over longer periods of time, markets on aggregate tend to outperform any company individually. In markets, power is widely distributed — a lot of people are making choices every day about what to buy and when to invest. In hierarchies we tend to give a relatively small minority of people a monopoly on setting strategy and direction and that can be fatal in a highly discontinuous world.”
The reason the ad, and Hamel’s comments, caught my eye is that one of my motivations for starting Enterra Solutions was the fact that industrial age business management models didn’t seem well-suited for 21st century businesses. The 21st century continues to present new and increasingly complex challenges for commercial industries and governments worldwide corporations as they strive to remain competitive in a rapidly changing global environment. Challenges include:
- Managing complex, multi-divisional, multi-national enterprises that exceed industry best practices, require highly efficient, cost effective and integrated platforms.
- Managing continuously changing legal, regulatory and governance environment that can demand automated solutions to managing complex requirements (e.g., Sarbanes-Oxley, HIPPA, The USA Patriot Act).
- Countering increased threats from terrorism and other malicious activities that can require greater security oversight (e.g., Physical, Cyber & IT, and application).
- Adapting to the need for on-demand, on-point information shared securely across business units, agencies and geographies, which can call for new and advancing technologies.
As Enterra Solutions started working in the development sector, I added the following challenges to my thinking:
- Connecting emerging/frontier economies to the global economic grid by providing “sovereignty services” that bolster the host government’s capacity to secure foreign direct investment deals.
- Gaining access to emerging/frontier markets and locking in preferred relationships with national governments and companies looking to trade natural resources for infrastructure development.
What you find in common between my thinking and Hamel’s is that industrial age thinking and industrial age business management models are simply inadequate for the challenges faced by organizations operating in the information age. Companies must be much more integrated and flexible than they have been in the past. In Hamel’s terms, they must be less hierarchical and more market-oriented. That means that information must be shared more broadly than in the past. Traditional organizational silos must be breached; otherwise, they will stand as sentinels guarding the way to progress. Some companies don’t even recognize the “curse of organizational silos” [“Waking up to the ‘silo curse’ is far from the end of the problem,” by Gillian Tett, Financial Times, 9 October 2009]. Tett asserts that it was corporate silos that contributed to the downfall of Lehman Brothers. She writes:
“In recent months, vats of ink have been spilt on the macro-economic and regulatory reasons for the financial crash. But one issue that has received less attention is the problem of how financial companies are structured – most notably, in terms of their tendency towards both structural silos (ie: departments that do not talk), and mental silos (financiers with tunnel vision). This ‘silo curse’ was central to many recent failures of public policy. Just look at how at the activities of groups such as AIG fell through the cracks of oversight because there were so many competing regulatory bodies in the US. Or note how British policymakers split monetary policy (managed by the Bank of England) from financial regulation (handled by the Financial Services Authority) and thus failed to curb the credit bubble. However, fragmentation was pernicious in private-sector institutions too. Lehmans was one case in point. But institutions such as UBS, Merrill Lynch or Citi (to name but a few) had similar flaws. And that has not just hampered information flows around banks, but across markets too. … For one paradox of the modern age is that while technology is integrating the world in some senses, it is simultaneously creating fragmentation too. Moreover, as innovation speeds up, it keeps creating complex new activities that are only understood by technical ‘experts’ in a silo.”
Tett makes a great point that the trends of connectivity and specialization often seem to work against each other. In many ways, they represent the ironies of the information age. With more information available, real experts are only found in specialized areas. Only when those experts get together to find a solution to a challenge is the power of the information age unleashed. To help unleash that power, Enterra Solutions created Advanced Enterprise Management Systems™ that provide integrated products and services to our clients worldwide. Our discreet, yet inter-related Solution-as-a-Service offerings and outsourcing agreements, include:
- Pre-Configured Industry/Micro Vertical Solutions
- Development-in-a-Box™’s “sovereignty services” for emerging/frontier market governments
- Information Fusion and Sharing
At the core of our technology process is our Enterprise Resilience Platform™, consisting of strategic advisory, a propriety methodology and advanced, standards-based technology for automating rule sets and business processes, policies and controls. Our systems are intended to help clients dynamically update affected processes and procedures across an organization as requirements change (or, in the case of emerging/frontier markets, as infrastructure development is sequenced). Our reusable product solutions are supported by teams of subject matter experts and technologists with extensive industry, governmental, and information technology experience. They are integrated as shown in the figure below.
We believe that the Enterprise Resilience Platform™ and the Advanced Enterprise Management Systems™ it creates can help make organizations more resilient by making them more adaptable and transparent. The larger the organization the more important integration becomes. IBM’s president and CEO Sam Palmisano calls these kind of transformed organizations “globally integrated enterprises.” To read more about globally integrated enterprises see my posts entitled Globalization and Resilient Enterprises, IBM’s Globally Integrated Enterprise, and More on Globally Integrated Enterprises. The future will be about breaking down barriers not erecting them. Information overload has become one such barrier. Companies that find ways to make sense of mounds of data and share critical information will have a competitive edge in the future. JP Rangaswami, an informational technologist and blogger, believes “that it is only a matter of time before enterprise software consists of only four types of application: publishing, search, fulfillment and conversation.” In other words, Rangaswami believes that the only useful enterprise software will be software that easily brings people together to share information and learn from it. Like Hamel, Rangaswami seems to believe that only flexible and adaptive organizations will thrive in the information age. I agree entirely.