Current business models and mentalities are rooted in the post-industrial era. They have helped drive maximisation and scale, founded on a take, make, waste philosophy. Post-industrial models view business as a machine where assets (human, natural or manufactured) are sweated with economies of scale, bringing increased profits through reduced production costs. Functions are separated into different departments forming silos; separating the whole into disparate units to aid maximisation and cost reduction. Top-down command-and-control hierarchies enable effective management of the units. This atomisation, while bringing economies of scale, can erode the benefits of economies of scope: interlinking relationships, open resource and information flows that facilitate improvements in innovation, collaboration and resilience. Relationships are the lifeblood of business and yet economies of scale, unbalanced by economies of scope, can degrade the inter- and intra-relations essential within and across organisational boundaries. Post-industrial business thinking has led to organisations often being treated as lifeless hierarchic machines made up of building blocks that can be rationalised, measured and monitored for improved efficiency and effectiveness.
This post has been read 168 times!