Two Management Worlds

The biggest challenges facing companies today are innovation and competitiveness. These challenges reflect the shift in our economy from an industrial to a knowledge model. However, in many cases, we try to face these challenges using organizational and managerial structures that were designed for the industrial era. It is an uncomfortable fit. The truth is that we all operate today in both the industrial and the knowledge worlds. We need to understand this and learn to move effectively between them. What do these worlds look like?

• Industrial world – The dominant models of industrial business focus on positioning the firm in its competitive market and optimizing a value chain to meet client needs. This type of organization tends to be hierarchical with strategy formulated at the top. Performance here is measured through quantitative financial and operational performance. This is still the way we run businesses, and there will always be a role for corporate structure and measurement. But, we all need to add new tools to our toolbox.

• Knowledge world – The nature of knowledge work demands a different business model. Rather than a value chain, a knowledge managerial model focuses on a value network built outward from the core competencies of the firm. In this world, the firm is better described as a bundle of capabilities, competencies and knowledge resources. Here, strategy is formulated at the edges of the organization where employees use shared knowledge to reach out to the market and solve customers’ problems. Management’s role here is to attract and support employees, encourage them to share their knowledge, and find new opportunities through innovative thinking. This type of strategy needs to be measured by more than just earnings—qualitative examination of individual and group competencies is also critical.

Managers need to understand and manage in both worlds. Each world requires different skills, knowledge and systems. Make sure you have the right mix to maximize your firm’s growth and performance.

Trek helped us sort out what was going on in our market. This helped us make the right decisions regarding a potential new division we were considering. They helped us focus on how to best use our strengths to succeed in this new market. They also helped us avoid a costly investment in infrastructure. [Read more client testimonials]

Featured Case Study:

• Consulting firm - Creating an organization plan to support growth

Featured Publications:

• “Cultivating Innovation: Lessons from America’s Chief Innovation Officers” - Trek Consulting White Paper
  
  
• “The Exploding Business Model” - Trekking, Issue 25
  
  
• “The Allure of Centralized Control” - Trekking, Issue 22