Neue Unternehmenskultur

Strong units must be able to function in a network //

Structure follows strategy. There is no doubt of the truth of this general claim made by management theorists. However, selecting the right organizational form has become an extremely complex challenge for many companies. Additionally, in this age of multi-dimensional design criteria, the expectation that tasks, competencies, and responsibilities should be unified is simply no longer realistic. It’s no wonder that restructuring, while once a rare event, is now commonplace in many companies. Still, there are some guidelines that have proven themselves in practice.

If a company wants to meet its goals, it will need focused units who cooperate and interact effectively with others. In our language, this means forming effective sub-communities and intelligently linking them to a cooperative network.

When it comes to structuring large organizations, the two litmus tests always center on two related issues:

  1. The structure and organization of the company

    How do we set up a company and divide it into sub-units in order to best take functional, product-related, client-specific, and geographic aspects into account?

  2. Managing a centralized/decentralized network

    How should we organize the sub-units in relation to one another, and how should we create the right balance between necessary centralized management elements and decentralized freedoms?

    We believe that a balanced centralized/decentralized network is a good general model for every large company: the strengths of the sub-units are intelligently combined with the advantages of the entire organization in terms of resources and synergies. In this way, the corporate community consists of organizational units that are tied to one another, but that can act with broad autonomy. As part of the corporate community, they fill an important strategic role in the service of the entire company.

Hans-Peter Erlemann

“Structures, processes, and roles create a dynamic framework that allows people to work successfully.”

Hans-Peter Erlemann

Design requirements for organizational networks //

Create real ‘combat units.’

From the community management perspective, we promote the creation of viable departments and sub-units within the company. Although it might sound a bit martial for some, and we’re sure many people would prefer to use the term ‘key strategic units’: We believe that as many organizational units as possible – whether they are divided into individual structures or a single overarching structure, or whether they are temporary or permanent – should be organized and managed as combat units.

This holds particularly true for units with a strong focus on customers and markets, such as sales and service, whose strength is often vital to a company’s existence. However, the requirement generally applies to all sub-units of an organization.

Types of
Combat Units

Here, too, the team sports analogy provides valuable insight and ideas. A team can only be characterized as a combat unit if it has more than just brilliant stars; it needs to excel at teamwork.

Foster independent identities.

Organizational units must be able to develop their own strategic, organizational, and cultural identity – embedded in the framework of a strong corporate community:

Strategic identity requires that the units are provided with clear goals and tasks, as well as a corresponding mandate. The units enjoy extensive freedoms and creative leeway. However, in return, they are responsible for their own successes or failures.

Organizational identity means that the unit is able to determine its structures, processes, and roles on its own to a large extent – naturally according to its particular strategic focus.

Socio-cultural identity provides all members of the sub-community with a sense of belonging. They find a professional home here – one that is ingrained in the value system of the entire company.

Integrate units into a vibrant network.

At the same time, we have to emphasize that the strength of the entire organization – as well as that of the individual decentralized units – depends on consistent systems, universal policies, a shared infrastructure, and standardized solutions. The comprehensive use of information technology is undoubtedly a striking example.

Intelligently and sensitively harmonizing these contradictory requirements is a question of instinct. The duties and roles that a corporate center should take on as part of such a network can only be decided on an individual basis. However, the most important criterion is that the individual units are given enough leeway to strategically and operationally manage their human potential. Regardless of which structural form the company takes, it is extremely important that the potential of managers and employees is given room to blossom within these ‘combat units.’

Learn more about our approach in our example project

© BBH GmbH // Strategy & Innovation