The economic circumstances of the past 18 months drive change in many ways and with that many new opportunities may arise. New companies surface and existing companies fade away. The biggest changes though may arise in the way organizations work. Many large corporations have laid off substantial parts of their workforce over the past 18 months. Some have done so in official restructuring programs, some subsidized by government funds and some under the radar, one by one on an individual bases. The drive for lean workforces in many cases has however not lead to a lower overhead or leaner procedures. Many of these organizations are still slow in response and lack customer focus.
In order for these traditional organizations to be able to respond to market changes they will have to change their organizational structure and way of working. Just hiring back the laid off workforces is too easy and will lead them into the same pitfalls as before as well as into new pitfalls as the world has changed in the mean time. There is a need to look beyond the organizational comfort zone for new ways of doing business.
Social media is enabling small players to have a large presence. The small companies often operate in a niche segment of the market where large organizations cover a broader aspect. Will the economic situation drive buyers to be more selective and acquire their needs from specialists rather then generalists? For those target groups social media will be a perfect outlet to allow small companies to become first choice in their niche.
The rise of social media and social networking also enables small companies to compete for work beyond their niche where they in the past would never have been able to compete for. New media and social networking lower the barriers to find partners and in a flat world it is irrelevant where those partners are located. By joining forces in partnerships or collaborative networks the small companies can become a formidable competitor for the traditional organizations.
These new collaborative networks will have some advantages over traditional organizations:
- The on-demand character of the networks allows for an agile structure that will be formed as the opportunity grows or demands changes. Partners with specific skills will join the network when required and will leave when their part of the opportunity is over.
- These networks will be able to respond swiftly to demand, as it are all entrepreneurs who are used to do so, there are no procedures for them to adhere to. The opportunity is leading and internal consultation between partners will be sufficient to make decisions quickly.
- The lack of existing procedures also brings the benefit of the lack of organizational overhead, hence they have a lower cost structure.
- The networks will have no fixed cost like for office buildings, if at all a joint workplace is desired the networks will find one that suits the purpose, after all these entrepreneurs are used to work wherever it is needed.
Networks and partnerships may be a way for the small Davids to beat the large Goliaths. On the other hand networks and partnerships are open instruments that can be used by the large organizations too. In fact formal alliances are most often used by larger organizations to team up with other large organizations and have lead to many well known results in all kind of industries. Alliances are around already for many years. One of the older ones is the alliance Walt Disney created in 1955 with Coca Cola to be the soft drink supplier for Disneyland. However alliances, being predominantly the domain of large organizations, are often ruled by procedures and hence lack agility. For the large corporations to move into agile collaborative networks innovation in alliance structures is needed.
Social media and social networking have their impact on how organizations do business and we see new competition arise for existing organizations. This competition will attack them either in niches or in broader aspects through collaborative networks. Organizational innovation is required for existing organizations to survive. The organizations that will thrive and survive in the coming years will be agile organizations that will be swift in response and low in overhead. These organizations will demand new cultures, new leadership styles, new ways of communicating internally as well as with customers, new organizational structures. Let alone the gap that needs to be bridged between the generations that enter the workforce that do get the new media and the incumbent generations that still feel new media is a temporarily thing. Trust will be key in the 2010’s, more than ever before.
The era of the 2010‘s will be an exiting era full of change. I mentioned elements like culture, leadership, communication, organizational structures and trust; what do you think will need to change for organizations in the 2010’s?