Corporate Structure 101

January 25, 2005

The corporate landscape has changed. The organizational structure has evolved into an entirely different form. The complexity of a company’s operation is staggering and is primarily dictated by the activity of the market. In the advent of globalization, the trade environment has transformed into an ugly battleground. Operations became more expensive, raw materials less available and consumer activity less predictable. Growth in todays business environment seem to be at a stand still. But as I have always said, “The moment that you stop growing is the time that you start dying”. Expanding the market is more difficult than ever. Outsourcing has been the strategy of various corporations to cut operational expenditures and increase profits on a year to date basis so that growth can be achieved. The question still remains, can we develop our business this way? Can we just tell ourselves that the market is now a limited ground for business opportunities? And that expansion and growth is just part of business courses and is a thing of the past?

Certainly if this is our point of view, then I suggest we pack our bags, sell the company and go home. In todays challenging and volatile business market, we must learn to adapt to the growing demands of the consumers, the economy and most importantly ourselves. Today’s trade environment is a great opportunity to look into means of improving our system, business process and management structure.  In the beverage industry for example, we can no longer grow the market in this category for the reason that it has already reached its peak. Its either we accept this fact or create a marketing strategy that will promote beverages as an alternative means for taking a bath. Whether it be milk, colas, juices, energy drinks, alcoholic beverages, sports drinks, etc, the market growth in this sector has turned into a “one more, one less” concept. How can we grow then? Do we submit ourselves to our competitors and accept the fact that no growth will be realized?

Hell no! Let us grow internally. What if we can achieve or exceed our targets by just honing our system and developing it into a more efficient process that can bring more profits to our company? Wouldn’t it be the best innovation we can create at this point in time? Companies have been changing their way of doing business. Many has even suggested evolving their organization into a more flat and flexible structure. Many even implement mentoring programs that increase coaching and dynamism within the company. Many are even conducting rigid training regarding varous functions like sales and marketing, HR management, etc. But are these organizational revamp really enough to generate our desired results?

I submit to the fact that no organization is perfect and that companies have different needs and operational complexities. But, I have to disagree that these are the only ways we could do in order to achieve our main objective which is growth. We can relate to various business books, management references and even experience to find the answers. And yet we will still remain clueless of what companies really needs.

Whenever I have a big problem, I always tend to simplify it. Instead of looking at it in a bigger picture, I tend to stare at it in a smaller piece. And you know what I found out, “the only way to solve a problem, is not to know what caused it, or the effects it created, but rather pointing it out and stating the obvious.” Like for instance, if our corporate structure has developed silo mentality, we must never determine its cause because it is too lengthy, we cannot see it effects because its too vague and can be confused with another problem, so there is nothing left to do but to look at it as it is. In everyones perspective, it obvious that silo mentality is protecting your own group figthing out the other groups. The only way to solve this issue is to increase project management activites. Design a project where all sections can come together and realize their differences. Too much familiarity with each other will tend to create a personal rather than a professional environment. Moving people can also be too risky because, the right fit of a person to a position is integral for the optimum performance of that individual.

Management teams right now in the corporate structure tends to play like God and build their kingdom as if it was to remain like that forever. They tend to hold on to power and not share their insights or train a successor for their position. If they do train one, they do so for the wrong reasons. Like experience, trust, etc. Why not promote individuals that has the talent, personality, the necessary skills and technical knowledge and the gift to lead a company? Why do we have to suck up to our boss before we move up the corporate ladders? I tell, performance appraisals tend to focus on the weaknesses of an individual rather than their strenghts. We have numerous ways to find out the true strenght of a person and use this knowledge to increase efficiency and productivity.

Gone are the days of looking for new people to drink our beverage. Now is the time to tell our current drinkers to drink more of our product. We must not only grow the business in terms of volume and sales targets but also in terms of corporate structure, corporate maturity and effective corporate management.