NEW CHARACTERISTICS OF BUSINESS:

21ST CENTURY CORPORATIONS What Career Next!

Ca r eer Change and Pl acemen t Specia li sts

Everyone knows the Industrial revolution was the frontier of the old economy. Asset heavy
companies with trades based occupations managed by lumbering bureaucracy reflecting
Taylor and Weber’s management ideas.

Now, we have the Internet. The new frontier of the New Economy. Let’s review the
impact and requirements for success in the 21st Century Corporation.

Traditional values in the old economy: - loyalty, stability, incremental changes, and
compartmentalisation. These have been replaced by a different mind-set in the new
economy - employability, instability, dynamic changes, increasing borderless business.
Trading exchange principles are everywhere now: between employer and employee,
between company and partners, between businesses and their customers. The market
economy has entered every dimension of business, creating new markets everywhere that
the company must excel in to succeed.

Leadership in the old economy was hierarchical, seniority based and top down. In Asian
management circles, this remains the order of business. Yet there are new drivers in the
new economy: better relationships with staff, customers and business partners. This is a
major frontier of business development in the new economy. Changes in leadership style
and performance are under pressure as markets separate who can manage their intellectual
capital better. [See table 1 for a summary of these factors]

Knowledge management in the old economy meant individual knowledge translated into
individual power, sharing knowledge was always incomplete. Companies routinely lose
knowledge as they lose employees from retrenchment or retirement.
In the new economy, now team knowledge is more important, sharing knowledge is
enhanced by knowledge sharing systems, across physical boundaries. Specialised individual
knowledge is still power, but only when it can be shared and applied. Today’s knowledge
frontier involves conversion of tacit knowledge (experience based) into explicit knowledge
(published or retrievable knowledge) using supporting technology. Even doing oral
histories can be a useful tool to record existing intellectual capital.

However, in the next economy, creating new knowledge will become the cutting edge of
competitive advantage. Companies will only survive by creating their own knowledge, a
constantly renewable and time-sensitive resource; intellectual capital is the growth engine
of the 21st Century Economy. Consider the mind set, systems and management practices
needed to develop intellectual capital. I suggest that companies may wish to consider
doing an intellectual capital audit to identify key KSAO's in their company. I will take a
safe bet that much of it resides at the lowest rungs in the company, or even outside of the
company. Doing such a survey should embrace all of the partners to the business:
customers, suppliers and partners.

In the next economy: tying customers and suppliers into the company via knowledge
management systems will allow customers to participate in the initiation & development of
new ideas (new demands) and new knowledge within the company.
The New Economy Company conceives of itself as including customer and supplier bases.
To realise this means developing systems and processes that permanently ties and
continuously develops customer relationships. These relationships are crucial in creating
ongoing shareholder value.

Consider the shape of the 21st century corporation: currently the web is the new frontier
for business development, enabled through new strategic alliances between businesses. The
structure of these companies is still tending towards hierarchy. Many continue to argue for
this approach at the micro level. However, on the macro scale, the linking of staff into
teams, of businesses into strategic partnerships and with suppliers and distribution chains
suggests a network is a better model for the New Corporation. Linking businesses and
customers into value-creating & consuming chains implies a web like structure as the new
business model for the 21st century. Tying together a common set of mission, vision and
values across traditional boundaries will be the next frontier for organisational
development.

Managing knowledge is the current big thing, but creating new knowledge, building and
sustaining new relationships and growing intellectual capital is the requirement for the next
century. Companies that fail to pay attention to their intellectual capital, fail to encourage
and enable new ideas in their companies are holding back their own development, in a
global marketplace with increasing competition this is a strategy for decline.

Distinguishing technology options by their ‘media richness’ will help manager recognise
their ideal application to support intellectual capital mining. From ‘dry as bone’ email,
through telephone contact (call centre driven surveys are example here) to face to face
contact, allows the new company to offer its client segments appropriate linking
mechanisms to connect them into your organisation.

Competitive advantage is not created with physical assets, this is old economy thinking.
Competitive advantage is made now from identifying and leveraging intellectual capital -
the knowledge of the workforce and of customers and partners to the business. This is a
difficult concept to practice in Asia: traditions suggest the importance of hierarchy and
some lack of faith in lower level staff as a source of intellectual capital. Yet doing an
intellectual capital audit may help to identify the wellsprings of knowledge within and
outside the traditional boundaries that are really sustaining competitive knowledge
advantage for the company.

In the 21st Century Corporation, outsourcing will have many new shapes. Local
outsourcing alone is no longer an appropriate boundary. Technology and supporting
infrastructure especially logistics, enables customers to be served where they are, removing
some of the traditional links between producer and consumer. Outsourcing can now be
done anywhere, with non-core functions, indeed even with specified steps in a product or
service provision and still be delivered to the customer where they are, when they want it.

The 21st century organisation will be a learning organisation [see table two below]. We
have just begun to scope some of the important areas of creativity and knowledge
management that the 21st Century Corporation will have to learn. Creativity is the
hallmark of successful intellectual capital management. Creating new knowledge, drawing
it from internal and external sources will be essential for company renewal and survival in
the 21st Century.
Creating a learning culture in the company requires traditional Asian values to undergo
adaptation values to meet the new economy. Listening skills will become ever more
important: listening to customers, listening to feedback and new ideas from front-line staff,
and listening to and support new business ideas will be the ‘cashflow’ of the new century
company.

Economics suggests that customers are always looking for new and better ways of meeting
their needs. In addition, they will balance convenience with price. 21st Century
Corporations can keep in tune with these needs by revaluing employees, integrating
customers and building better market relationships with all of their partners in the
company. Like a good web site, the quality and degree of stickiness of these relationships
is another important new frontier of the 21st Century Corporation.

John M. Read
Certified International Job & Career Transition Coach
Managing Consultant
What Career Next!
Registered in Singapore
career@magix.com.sg
Tel: 354 3551

References:

1. Byrne, J. Management by the Web. In “The 21st Century Corporation – The

Great Transformation”, published in BusinessWeek, August 21-28, 2000, p.84-96,
McGraw-Hill Companies, USA
2. Harrison, R.T. & Leitch, C.M. (2000) Learning & Organisation in the
Knowledge-Based Information Economy: Initial Finfings from a Participatory
Action Research Case Study. British Journal of Management, Vol. 11, 103-119,
UK.
TABLE 1: A CENTURY OF CHANGE, FROM OLD TO NEW: PROFILING THE 21ST
CENTURY CORPORATION

CHARACTERISTIC OLD ECONOMY NEW ECONOMY

Business Model Specialised, tight boundaries Networked Web
Organisation Hierarchical, bureaucracy Boundaryless
Focus Internal Integration
Style Structured, rigid Responsive
Competitive Advantage Monopoly Relationships
Structure Many levels, specialised Flatter, multi-tasked
Resources Physical Assets Intellectual Capital
Operations Functional Virtual
Products Mass Production Mass Customisation
Reach Domestic Anywhere, all the time
Financials Quarterly Real Time
Inventories Monthly Real Time
Strategy Product/Service Specialty Outside-in
Leadership Top-down Visionary, strong
HR Management Administrative Strategic
Workers Tools Intellectual Capital
Job Expectations Few Many
Motivation Bounded Self-development
Improvements Incremental Quantum or die
Quality Variable Defined, improving
Metrics Financial Balanced Score-card
Philosophy ‘We know best’ ‘We are listening’

John M. Read
Certified International Job & Career Transition Coach
Managing Consultant
What Career Next!
Registered in Singapore
career@magix.com.sg
Tel: 354 3551
TABLE 2: PROFILE OF A LEARNING ORGANISATION (After Pedler et al, 1997)

1. Learning approach to
strategy development STRATEGY
2. Participative policy-
making
3. Informating - using IT to
inform
4. Formative accounting &
control - using accounting
to inform
5. Internal Exchange - active LOOKING IN
market between internal
customers & suppliers
6. Reward flexibility -
identify, create and reward THE
expectation fulfillment LEARNING COMPANY
7. Enabling Structures -
flexible internal working STRUCTURES
relationships
8. Boundary workers as
environmental scanners
9. Inter-company learning - LOOKING OUT
with suppliers, partners &
even competitors
10. Learning Climate -
mistakes are allowed, LEARNING
managers lead learning OPPORTUNITIES
11. Self-development
opportunities for all