The Mutable Enterprise
Mutable Enterprise (Organisation): This is an Enterprise (Organisation) that is highly agile and able to both initiate a new competitive stance, and to respond flexibly and rapidly to shifts in its competitive environment, through the exploitation of technology. It does this by repositioning its core resources (human, cultural, organisational, technical, capital, IP) to effectively match and exploit new competitive circumstances. It uses changes in information technology to exploit the rapidly growing diversity of ‘on demand’ services and the related impact of social media in transforming how humans now communicate in real time, resulting in significant and continuing shifts in organisational culture and behaviours. Rapid innovation in the tools used for work and communication, covering desktop computers to totally mobile smartphones and tablets, underwrite the ability of the Mutable Enterprise to ‘sense and respond’ to its market and competitive environments in radically new ways. This is the prime challenge to the Mutable Enterprise: being able to create an organisational and operational culture to replace classic top-down ‘command and control’ modus operandi with a more biological-like ‘outward in’ approach to business management.
- Outward In Thinking: This is extroverted thinking, where strategies and decisions are driven by a deep understanding of the environment and empathy with the needs and concerns of the external stakeholders in an organisation or other thinking entity. This often goes with a flattened organisational structure where employees are focused outwards, on keeping external stakeholders, such as customers, happy; instead of focusing on what their line manager wants. Contrast with Inward-Out Thinking. Outward-In Thinking facilitates the development of long-term relationships and is usually more conducive to the long-term survival – and success – of an organisation.
- Inward Out thinking: This is introverted thinking, which is driven by a consideration of the internal needs, values and aspirations of an organisation, usually identified with the CEO and his/her command and control management structure and which only concerns itself with external stakeholders in so far as they represent a threat to an organisation, or a source of profit. Contrast with Outward In Thinking. Inward-Out thinking can be very effective in the short term but may be less conducive to developing long-term relationships than Outward In Thinking.
Running a successful business is dependent on good governance of certain key characteristics – or pillars – of the business, such as (in general) resources, behaviour, risk etc. This applies regardless of technology or automation, but good business automation must be aware of these business pillars and facilitate, rather than impede, their implementation and management.
Enterprise Resources: Every organisation has a set of resources that it uses to produce the products and services that it supplies to its customers. These resources have to be managed effectively and efficiently for the organisation to perform satisfactorily and to make continual performance improvements. These resources include the following:
- Stakeholder: A person, group or organisation that has interest or concern in an organisation. Stakeholders can affect or be affected by the organisation’s actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources.
- Plant: Plant is defined as the physical resources used by an organisation. These would include buildings, such as office blocks, factories and warehouses, as well as vehicles such as aircraft, ships, lorries, vans and cars, and finally equipment such as conveyor belts, desks, furnaces, etc.
- Product & Services: Any organisation has some commodity that it offers to its customers. In the case of a manufacturer, this can be anything from a screw to an aircraft and also includes services that support its customers in the use of its products. In the case of a financial or other services organisation, then the “product” is not a physical thing but a service for which there is a charge. Even a non-profit organisation has a product or service.
- Finance: Any organisation has to manage the money or other liquid resources that it earns and spends. This includes the circulation of money, the granting of credit, the making of investments, and the provision of banking facilities. In today’s world of compliance this management also includes the conduct or transaction of money matters.
Business Agility: The capability of an enterprise to rapidly change or adapt in response to changes in the market. A high degree of organisational agility can help an enterprise to react successfully to the emergence of new competitors, the development of new industry-changing technologies, or sudden shifts in overall market conditions. An Agile organisation is one that is fast moving, flexible and robust; one that is capable of rapid response to unexpected challenges, events, and opportunities. Built on policies and processes that facilitate speed and change, it aims to achieve continuous competitive advantage in serving its customers. Agile enterprises use diffused authority and flat organisational structure to speed up information flows among different departments, and develop close, trust-based relationships with their customers and suppliers. (Edited Business Directory)
Behaviour: Behaviour is a response of an individual or group to an action, environment, person, or stimulus. These actions and attitudes of individuals and groups towards one another, and towards the organisation as a whole have effects on the organisation’s functioning and performance. Ethical behaviour means acting in ways consistent with what society and individuals typically think of as “good” values (this can change over time as cultures evolve or decay; there is no absolute definition of “ethical behaviour”). It is good for business (because it fosters Trust, without which business relationships would be severely impeded) and involves demonstrating respect for key moral principles that include honesty, fairness, equality, dignity, diversity and individual rights. (Edited Business Directory)
GRC (Governance, Risk Management & Compliance): GRC represents three activities that work together for the purpose of assuring that an organisation meets its objectives. (Wikipedia, edited SH)
- Governance is the combination of policies and processes established and executed by the board of directors that are reflected in the organisation’s structure and how it is managed and led toward achieving goals. It describes the overall management approach through which senior executives direct and control the entire organisation, using a combination of management information and management control structures. Governance activities ensure that the critical management (decision support) information reaching the executive team is sufficiently complete, accurate and timely to enable appropriate management decision making, and to provide the control mechanisms that ensure that strategies, directions and instructions from management are carried out systematically and effectively.
- Risk Management is identifying, managing and mitigating risk events that, if they occur, would hinder the organisation’s ability to achieve its objectives. It is the set of processes through which management identifies, analyses, and, where necessary, responds appropriately to risks that might adversely affect realisation of the organisation’s business objectives. The response to risks typically depends on their perceived gravity, and involves controlling, avoiding, accepting or transferring them to a third party. The key risks that are managed at this level are external, legal and regulatory compliance; but this is only a small part of the risk environment of an organisation. In general, the more risk accepted, the greater the profit and the less competition; so an organisation that can manage its risks successfully will outperform the competition.
- Compliance is about doing the necessary things demonstrably well to satisfy the regulatory and legislative requirements. The organisation in question acts according to specifications issued by industry regulators (e.g. Financial Conduct Authority, OFGEM, OFWAT, etc.), trade association certifications (e.g. PCI-DSS), standards that the organisation complies with (e.g. ISO 9001, ISO 27001, ISO 55001, BS 10008, etc) as well as those imposed in law by government (these can be by country or state of residence or operation of the organisation, its customers or suppliers and partners and needs to recognise the many potential cross-jurisdictional issues that can arise).
Culture: Enterprise culture refers to the beliefs and behaviours that determine how that organisation’s employees and management interact and handle outside business transactions. Often, corporate culture is implied, not expressly defined, and develops organically over time from the cumulative traits of the people the company hires. However, culture also evolves over time. The culture of each enterprise has its own beliefs, values and activities. In other words, culture can be defined as an evolving set of collective beliefs, values and attitudes. Culture is a key component in business and has an impact on the strategic direction of business. Culture influences management, decisions and all business functions from accounting to production. It is related to behaviour, ethics, etiquette and more. A business culture will encompass an organisation’s values, visions, working style, beliefs and habits. (Sources: www.investopedia.com and www.businessculture.org)
- Effect of Millennials: Millennials exceeded Gen Xers as the largest demographic in the labour market, and their growing presence is shaping what it means to do work. Each generation wants a distinct set of benefits from their employers, and Millennials are no different. Increasingly, employees desire a flexible work schedule, and seek jobs with companies that they think are invigorating and inspiring. They want to work for an organisation that recognises them as individuals, rather than cogs in the system. Millennials have a “live for the day” mentality, in which the perks of today outweigh distant promises that may or may not be fulfilled. They value a purpose-driven job in which they can see their ideas coming to fruition. (Source: Why Millennials Value Company Culture Above All Else, June 9th 2016, Erin Vaughan, Association for Talent Development).
- Effect of Globalisation: As globalisation becomes more prevalent, companies deal with increased cultural diversity within the workforce. These changes require small and large businesses to learn how to deal with this diversity as well as to adopt new policies and guidelines for workers. As more companies have access to overseas companies that offer outsourcing, although it means a greater profit margin for the companies, it can also lead to reduced earning potential for employees. This can lead to disputes with unions and redundancy issues. Conversely, companies in foreign countries, particularly in the third world, have had to adopt a more Western standard in terms of providing better workplace safety and increasing workplace condition standards. Cultural, religious and ethnic diversity in the workplace presents a need for more employee training. In order to protect their companies and their new employees from discrimination, managers have had to implement policies and offer training to existing employees to make sure everyone can accept one another. (Source: The Effects of Globalisation in the Workplace, Kate McFarlin, studioD, smallbusiness.chron.com).