CENTERLESS CORPORATION - the New Business Model for the Era of Globalization and Rapid Change

Source: "The Centerless Corporation", by Bruce A.Pasternack and Albert. J. Viscio

"Companies have always adapted to larger and more complex forms by having management focus higher-order levers of performance." – Bruce A.Pasternack and Albert. J. Viscio

Centerless versus Traditional Corporate Model
Traditional	Centerless
Hierarchical	Flat
Centralized corporate services	No centralized services
Large corporate and divisional staff	Minimal staff at the corporate and group level
Independent, isolated business units	Interdependent, networked business units
Linear chains of command	Nonlinear, flexible and adaptable chains of command
Standard structures of business units for different products and geographies	Customized structures of business units for different products and geographies
Main Features of the Centerless Corporation A More Open and Interdependent Corporation
Built around resources and capabilities rather than the assets Flat with a network of interdependent business units and strategic alliances Characterized by interdependence rather than the independence of its parts Nonlinear: everything flows up and down in whatever direction it is most effective Flexible structures: there are different structures for different products and geographies in line with specific needs. Manages people with a new type of relationship – New People Partnership – rather that downsizing lists Has a Knowledge Department and a Chief Knowledge Officer Knowledge management: best practices and knowledge flow freely, finding their most productive use Staff functions are placed in the business units, a service unit, or outsourced – this arrangement allows firms to compete seamlessly with their full set of capabilities no matter where these are housed in the organization.

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Flat Organizational Structure

Strategic Business Units

Mind-set Change

In the Centerless Corporation, roles rather than organization get revamped. The Centerless Corporation represents a mind-set change – it does not so much look radically different as it acts radically different.

Business Enablers – the Three Axes

While the traditional corporate business model is structured around individual businesses, the Centerless Corporation is built along three axes: people, knowledge, and coherence. These business enablers are what allow the corporation to breathe and function.

Leadership

The real center of the Centerless Corporation is an extended leadership team.

The model is leadership driven because traditional management is not enough anymore in today's rapidly changing world.

Flat Organizational Structure

When organizations get large, they become slow, awkward, unmanageable, inflexible, and difficult to focus. They distance people from each other, and consume more energy than they release. Innovation-friendly organizations are flat and participative. They divisionalize to sustain innovation, flexibility and customer intimacy.

Division is a business unit having a clear set of customers and competitors. A division can be independently planned for within the organization and has profit and loss responsibility... More

Case in Point Siemens

Keeping Siemens' worldwide sales force abreast of the company's latest technology and best practices requires collaboration on an enormous scale. To accomplish this, sales people must be able to stay in communication with their fellow employees. ShareNet, an innovative knowledge management system used by a division of Siemens. ShareNet attempts to capture the knowledge and experience of Siemen's many dispersed sales and marketing units around the globe, making it available to all. ShareNet enables 18,000 employees worldwide to tap into the company's vast knowledge base to gather the latest information about products, customers, and competitors. More importantly, it allows them to do this from any web browser on the planet.

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