The Changing Face of Organizations

Sustainable competitive advantage is a terrific goal, but you can no longer count on it. Not long ago, companies could rely on their products, relationships with customers, technology, and natural and financial resources to provide at least some period of homeostasis before the next round of disruption and change.

No more. Product life cycles have shortened , while the pace of technological invention and advance has quickened. Advancements such as cell phones, computers, Internet access, broadband, just-in-time inventory systems, robotics , mass customization, and genomics have cleared away the entrenched competitive advantage of companies not nimble enough to adapt to changing times.

The need for a high-speed, " intelligent " enterprise has made obsolete the hierarchical organization, with its multiple layers , slow-motion decision making, and dependence on the personality of the leader. Today's most successful business organizations are characterized by fewer levels and decentralized decision points. In these companies, command and control from the top have given way to consultation and collaboration throughout. Silos have toppled, replaced by cross-functional problem-solving, decision-making, and planning teams .

Figure 3-1 contrasts the distinguishing characteristics of the once-predominant hierarchical organization with those of today's horizontal one.

Figure 3-1: Hierarchical vs. Horizontal Organizations.