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Tuesday, March 31, 2015

Physics of Business Growth: Post #4--Structure

Structure and Growth: Successful systems-aligned companies create innovative strategies, policies (especially HR), and cultures that are structured for change. Such companies celebrate success and “console” failure with lessons learned, ask questions, and are respectful, playful, open to new ideas, and curious. Best Buy serves as a good example with its innovative inverted pyramid—customers on top, employees next, finally servant leaders. Three approaches to innovative structure that promote growth: 1) Structure innovation initiative inside the company. Example: At Best Buy, the front of the house management is entrepreneurial and customer centric, but the back of the house is run by headquarters; 2) Segregate innovative initiative outside the company—like biotech where it may take years and cost a lot; 3. Build hybrids, like at IBM under Gerstner—Emerging Business Opportunities (EBO) to grow new opportunities that can become their own P&L organizations.  Engaged employees result from policies like promotion from within, good HR policies, perceived fairness in compensation and promotions, constructive feedback, equality, stock ownership and leader humility and stewardship.

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