Nature from its million year history has taught us one important concept. Being bigger need not mean sure survival. I am a great believer of natural selection and if we believe that Humans were "preferred" over dinosaur then nature selects smarter organization over bigger organization. Now if you have tracked the working of a company this is a clear dilemma faced daily by any organization. If i have to grow year after year how do i do it?
The usual process is to enter newer domains, invest in more fields and then naturally the solution for growing/improving your capacity is growing bigger. But nature has taught us that it is a wrong approach. So what is the solution? Partnership.
No one human can do all the diverse work in the world today simultaneously but may be can do all task individually. Then we are good at some thing we concentrate on that and cooperate with others to get all my other tasks done. The more i cooperate the more i grow. May be organizations have to put in place the same philosophy. If i need to grow enter new domain but then you need not do everything in that new domain, get a partner who is really good in that field and see with your own innate skills how can you add value to that partnership and use it grow your organization.
For example, if i am an organization too good to sell soaps through a good sales and distribution channel and now if you have to grow your revenue all you have to do is that get a low cost producer of a shampoo product line who is good at "producing" shampoo but not at distributing it.. Now you have a good distribution channel which does sell soap and majority of the same set of customer also uses shampoo.. and this partnership is a clear winner.. you combined two processes and then you now have an efficient model allowing both the companies to grow.. Why is this better than i making a new division by recruiting the best guys who can make shampoo? I now need zero investment in R&D and then i can leverage the cost advantage of my partner who already has some volumes before the partnership.. I get a great time to market advantage.. The shampoo partner should be good in his field as he has more experience than me in shampoo making..
And is this model a creation of my whims and fancy.. you see organisation which patrnered working far more sucessfully than the one which grew monolithically.. you see jitters in big organisations like GM, Citi than in the newer companies which leverages the partnership models.. Hope this recession kill the dinosaur and restart the era of Humans in business models and organizations..
