Adap­tive Com­pa­nies

The Economic Times - - The Edit Page -

In­creas­ingly, in­dus­try struc­ture is bet­ter char­ac­terised as ecosys­tems of code­pen­dent com­pa­nies than as a hand­ful of com­peti­tors pro­duc­ing sim­i­lar goods and ser­vices and work­ing on a sta­ble, dis­tant and trans­ac­tional ba­sis with their sup­pli­ers and cus­tomers. In such an en­vi­ron­ment, ad­van­tage will flow to those com­pa­nies that can cre­ate ef­fec­tive strate­gies at the net­work or sys­tem level.

Adap­tive com­pa­nies are, there­fore, learn­ing how to push ac­tiv­i­ties out­side the com­pany with­out ben­e­fit­ing com­peti­tors and how to de­sign and evolve strate­gies for net­works with­out nec­es­sar­ily be­ing able to rely on strong con­trol mech­a­nisms. Typ­i­cally, adap­tive com­pa­nies man­age their ecosys­tems by us­ing com­mon stan­dards to fos­ter in­ter­ac­tion with min­i­mal bar­ri­ers.

They gen­er­ate trust among par­tic­i­pants — for ex­am­ple, by en­abling peo­ple to in­ter­act fre­quently and by pro­vid­ing trans­parency…. Adap­ta­tion is nec­es­sar­ily lo­cal in na­ture — some­body ex­per­i­ments first at a par­tic­u­lar place and time. It is also nec­es­sar­ily global in na­ture, be­cause if the ex­per­i­ment suc­ceeds, it will be com­mu­ni­cated, se­lected, am­pli­fied and re­fined.

So, or­gan­i­sa­tions need to cre­ate en­vi­ron­ments that en­cour­age the knowl­edge flow, di­ver­sity, au­ton­omy, risk tak­ing, shar­ing and flex­i­bil­ity on which adap­ta­tion thrives. Con­trary to clas­si­cal strate­gic think­ing, strat­egy fol­lows or­gan­i­sa­tion in adap­tive com­pa­nies.

From “Adapt­abil­ity: The New Com­pet­i­tive Ad­van­tage”

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.