Dec 162011
 

In 2011, and with increasing speed in 2012, Enterprises are embracing the whole-system view of themselves. This means they will take an increasingly strategic view of improvement, coordinating change across divisions and functions to achieve a higher overall level of performance. This trend is reversing the short-term, every-division-for-itself fractionalization that many organizations adopted during the financial pressure years 2008 – 2010. In the coming year we will see more of the team mindset (with some “taking one for the team” while others seemingly gain) than the “spread the pain” approach. The most successful organizations will compensate those groups which bear the greater pain so the whole can prosper.

The systems-wholistic trend will continue even if the economy goes back into recession. Many who took the fractionalized approach and “squeezed everyone equally” are now weaker players than they were before. Those who took the systems view are now stronger. The weaker organizations that return to a system-wholistic approach will rebuild their competitive position. Those that don’t will be (indeed, already are being) replaced by organizations that do. This is happening because, as systems theory shows, there is much more potential for improvement from optimizing a system as a whole than there is from optimizing its parts individually. The multi-year downward stock trends of traditional fractionalized players such as GE and Cisco versus the upward stock trends of integrative systems organizations like Amazon and Salesforce.com, conclusively show that this is already happening.

Other reinforcing trends to watch include:

  • A return to the full vision of the Lean paradigm from the ineffective “pick and mix tools” approach adopted over the last few years. This will be facilitated by…
  • A tectonic shift from management driven by command-and-control, to management driven by customer delight. (Both the “Beyond Budgeting” and “Radical Management” movements reflect this shift.) Much of the information needed to do this well will be provided by…
  •  Greater use of Complexity Management techniques to increase the alignment of all the people in theEnterprisewith its customers based on needs, purpose and profit.

For the first time, all the tools needed to bring about these changes exist and have been proven in live corporations. The result of these interconnecting shifts will be that theEnterprise, at the end of 2012, will look more like an effective, coordinated whole and less like a collection of disparate, often at odds with one another, parts.

The Enterprise will begin to dance.

[Editor’s Note: This post is part of the annual “Cutter Predicts …” series, compiled at the Cutter Consortium website.]

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James Sutton

James Sutton is a Senior Consultant with Cutter's Agile Product & Project Management practice. His passion is for unleashing the power and joy of human creativity in the development of systems.

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