Corporation 2010 - business in 21st century - includes related articles

Chief Executive, The, Feb 15, 1998 by Peter Haapaneimi

When they describe the organization of the future, the seers are in agreement: Look for organisms, not machines - fueled by information, nurtured by alliances.

In the not-too-distant future, executives accustomed to working the pyramid of boxes and lines on the organization chart may find themselves coping with an entirely different - and far more complex - kind of company.

"I call it the Amoeba Form," says William Knoke, president of the Harvard Capital Group investment firm and something of a futurist. Such an organization, he says, will be "hypermodular," combining with other amoeba-like organizations to provide products and services. "When you need to produce something else, you just pull some organizations out and plug different ones in." In his recent book, Bold New World, Knoke says the Amoeba Form is "like the jellylike blob of cytoplasm seen under the microscope: it is amorphous, changeable, and conforms in shape to its environment; it is difficult to distinguish where one ends and the next begins."

Predicting the future is hardly an exact science, as most futurists will tell you. The futurist's role is to prompt executives to think about new possibilities. Thus, there are many different views of the future, ranging from Armageddon to Eden. But when it comes to describing the organization of the near future, there is a striking consensus among the seers: The corporation of 2010, they say, will be more like an organism than a machine. It will live on a freely flowing flood of information. And, above all, it will thrive by coordinating a complex web of relationships with suppliers, customers, and even competitors.

Futurists see this interdependence as critical because the challenges of the 21st century will be so great that no organization can meet them all on its own. "We have moved into a far more complex economy, and no company can internalize all of the skills required to produce what they need to produce," says futurist and author Alvin Toffler. "Companies are increasingly dependent upon others."

By teaming up with other companies, the corporation of tomorrow will be able to assemble the strengths of many partners to become far more nimble and responsive. It will exist in a world of varied, complex, and powerful relationships - a world where "your biggest competitor also may be your most important ally" and "your most important employee will also be working for your biggest competitor - and it's very possible that you could have a company with a thousand employees and revenue of $150 billion," says Watts Wacker, a futurist and co-founder of the FirstMatter consulting firm in Westport, CT.

But the future is one thing, and today is another. To executives struggling to streamline their own processes today, let alone orchestrate the actions of several companies, that hypermodular, internet-worked world may seem a long way off. However, there are companies that are already laying the groundwork for the organization of tomorrow, and using increasingly sophisticated supply chain management tools and techniques to forge tight, but nimble bonds with customers and suppliers.

Today's supply chain management initiatives are driven largely by an interest in rapid improvements in financial and business performance. For example, by focusing on its supply chain, Tenneco Automotive improved inventory turns by 25 percent and inventory levels by 50 percent. Nike saw a rapid 40 percent improvement in order fill rates and a 27 percent increase in revenues. And Ford reduced its order-to-delivery times from an average of 72 days to just 15 days. The supply chain is key to helping CEOs in the relentless pursuit of shareholder value, says Philip D. Robers, the national director of supply chain consulting at Ernst & Young. "Supply chain is the great frontier for building shareholder value. Outsourcing and creative application of new technologies to optimize performance and improve collaboration are providing a powerful stream of major performance improvements. This is going beyond the traditional focus on cost to build an operational platform for accelerating revenue growth." Indeed, a recent Ernst & Young study found that improving supply chain operations and freeing up cash flow can boost a company's stock price by 20 percent or more.

But a focus on the supply chain has results far beyond next year's annual report. As they hone their ability to manage the supply chain, companies are learning how to cooperate in order to compete. They are building the ability to work across corporate boundaries to serve customers - a capability that will be critical in the coming century, says Roger D. Blackwell, a professor at Ohio State University and author of From Mind to Market: Reinventing the Retail Supply Chain. "Leading companies realize that soon it will no longer be manufacturer versus manufacturer or retailer versus retailer. The nature of competition in the 21st century wilt be supply chain versus supply chain."

The changing demands of supply