Business Coach And Strategy Consultant, Malcolm Tyson Suggests Looking At Your Business Through An Open Lens

Directly conflicting with the bureaucratic and rigid mechanistic model, is the ideology of organizations as organisms. This representation considers the organization’s relation to its environment in a biological manner. According to Punnoose (2007), the organismic organization’s environment is defined as the collective “pressures” that have a “direct or indirect” effect on the functions of the organization. Pressures can be described as the interactions between functional participants and their respective environments to create value within its value chain.

Govindarajan and Trimble, (2010) characterized the internal interactions between functional operations groups and those responsible for innovation as hostile. Both groups seek the same goal within the framework of the organization but tend to have different perspectives on how those goals should be achieved. Just as living organisms constantly interact with their environment, organization theorists suggest organizations be viewed as organisms as a method to remove bureaucratic barriers and improve the flexibility, efficiency and effectiveness of management (Morgan, 2006). This perception further fosters the view of organizations as open systems.

It can be further inferred that open systems have reciprocations as well as a mutual reliance between the environment and functional groups. Susniene and Sargunas (2009) explained the open organization’s environment as not only comprised of relationships with customers but with all stakeholders including collaborating with competitors. It’s apparent that these external environmental factors represent an opportunity for firms, startups as well as mature companies within their business ecosystem. Iansiti and Levien (2004) outlined the business ecosystem as the network of suppliers, vendors, competitors, customers, producers of complimentary products, financiers, and any organization that can impact or be impacted by the development of the core product or service. Microsoft and Walmart boast a network of processes, products, tools, and technologies that members of the entire ecosystem can leverage, competitors included.

Clearly one of the main advantages of viewing a business organization through an open lens, is its ability to respond to external and internal stimulus rapidly. Further, the open representation allows leaders to see organizations as living systems that have needs that must be satisfied in order to survive. Morgan (2006) supports the concept of an organization as an open system of interdependent processes or functional areas that require the allocation of resources efficiently to sustain its well-being. Although this concept has a distinct advantage compared to the mechanistic representation, ironically this is also a limitation. The assumption that functional areas will harmoniously share resources and operate together is a misnomer and presents a weakness in the open representation.

Considering the number of individual agendas and the fact that managers are evaluated against specific functional objectives, leads one to believe that interactions between functional groups may not always be pleasant. Most organization’s functional areas and systems are adept at co-existing separately and thus distorts the open representation. In response, firms need to be organized by competency and not by function. Considering competencies such as decision making, collaboration, and IT innovation together, structures that are faster to market, fundamentally agile while simultaneously being incredibly innovative will result. Companies that make decision making a competency for competitive advantage are organized based on ensuring that decisions are made swiftly and have a favorable purpose to the organization.

Blenko, Mankins, and Rogers (2010) suggested that an organization’s value is a culmination of all the decisions it formulates and eventually executes. Companies structured to make quick, effective decisions that have the infrastructure to share information at real-time speed while using IT in a manner that creates distinct, measurable, relevant, mutually reinforcing and clear differentiation (Zook & Allen, 2011) are poised for efficiency, quickness, and sustainability. These “gazelles” as these types of organizations are referred to by Engel (2011) represent the new generation of rapidly scalable innovation creators in the world of business.

Viewing business structures through an open lens supports the concept of living systems leveraging the business ecosystem as a competitive advantage. This view will involve strategically collaborating with competitors where necessary and possibly restructuring the organization. The latter would not be performed for the sake of shaking things up, restructuring from functionally driven to competency based leads to a much more agile company that is easier to scale, which is the goal of all business leaders.

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