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Please explain the concept of Borderless Entities and what are some best practices to develop value ecosystems
Hello! Thank you for your question about borderless entities. The short answer is that a borderless entity is one that is focused not on departments or categories, but on outcomes to enable greater collaboration and collective inspiration within the company and with external connections such as suppliers. Trends of this business model are a decentralized decision making process, flexible distribution network, and an emphasis on training. Two pioneers (Weber Shandwick and Recyclebank) are also discussed to better understand this practice. Please see below for a deep dive of this research.
BORDERLESS ENTITIES OVERVIEW
In an effort to keep pace with globalization and market trends, as well as the ever changing world of digital technology, businesses are reformatting their internal structure to break down silos and internal barriers between departments, becoming borderless entities. This term means that a company places less emphasis on hierarchy and rigid adherence to job descriptions, and instead puts the focus on collaboration across departments to allow communication and idea sharing between all levels of the business (e.g. employee to CEO, supplier to technical). Borderless entities are businesses who work more with collective knowledge than individual specialization, and who have a company culture of cross-pollination to enable the best focus on the product or service offered to the customer.
Companies that take on a borderless approach become more agile, more focused on considering the customer's perspective for where to place value and resources, and place less emphasis on job categories (i.e. manager, technical, etc) to foster collaboration and the exchange of specialized knowledge. The main goal of the restructuring is to "increase efficiency and effectiveness in a competitive global marketplace."
Removing borders affect the whole structure of a company, not just the hierarchy of employees. Supply chains must also be optimized through "abandoning the mindset of absolute control" to enable "different regions to collaborate on a single product." Teams become the focus with an emphasis on communication between all levels, from supply and distribution to finance to management. Those who focus on lean systems and the circular economy are often borderless as they are "laterally structured, [where] boundaries begin to breakdown as different parts of the organization need to work more effectively together." Companies put more value on training to build collaborative and innovative skills in their employees to make this structuring work. "Innovation has to become part of the culture and the DNA of an organization but it’s not always a natural fit," one CEO said. It has to be fostered from the top down until the last of the barriers are lowered and collaboration becomes the automatic mindset.
BEST PRACTICES/TRENDS
Within borderless entities, the following trends have emerged in the most successful.
--Decentralized decision process: Employees are no longer on a strict ladder structure. Instead, they are organized into units with fewer "layers" to enable better collaboration and decisions to be made in real time to adapt to changing market conditions. Managers coach and encourage their employees to "gain more decision authority and latitude."
--Emphasis on training: As barriers disappear between departments, workers need to be able to communicate effectively with each other on technical, financial, and social levels. Companies need to focus on training, and encourage a global, diverse outlook in their employees.
--Flexible distribution network: With the optimization of supply networks in tandem with the growth of startup companies who are disrupting traditional distribution channels, borderless entities are no longer stuck in rigid chain networks. At all levels of the value chain, workers can create new methods and find new suppliers to "increase flexibility and responsiveness."
PIONEERS
Two companies who are pioneering the ecosystem development of borderless entities are Recyclebank and Weber Shandwick. These two are examined in more detail, and a list of other companies who are working to break down barriers is also given.
Weber Shandwick: This company defines itself as borderless, and prides itself on its collaborative culture. They look for job candidates who are smart, but, more importantly, who are willing to always grow and adapt so that from the start they can have a lateral business model of interconnection and collective inspiration. In several of their offices around the globe, they have building layouts that "increases face-to-face interactions" to promote communication and collaboration. Each office also holds diversity seminars, women's luncheons, and training programs for developing young talent. In 2016, the company rolled out its "The Hidden Power of the Mind: Implicit Bias and What It Means for
Weber Shandwick " leadership training initiative that seeks to uncover, examine, and learn from biases, hidden and otherwise, that can impact the company's "innovation, creativity and connection." The company utilizes social and digital platforms to connect its employees across regions of the world in its collaboration culture. Employees laud what they call the "multiplication of creativity" that is possible through the company's borderless structure.
Recyclebank: Though this company began as one made of silos, its leaders soon realized that it would need to forge connections between all of its stakeholders if it wished to succeed. The key component upon which the change hinged was "open communication." In an effort to become a borderless entity, the CEO wanted his employees to always focus on what the customer needed, so he "invited clients into the organization to present to the entire company." The company has it a policy to avoid any future silo building by ensuring every employee understands more than one area of the business.
Other examples across business fields who are developing this type of business ecosystem include IBM who has "dropped its organizational structure...and reorganized into industry groups", Denver Federal Center, CISCO, and Allison Transmissions whose CEO "leads technology “scrums” with the company’s engineers." The field that best exemplifies the ideal of borderless entities' new ecosystem is the digital platform industry. Apple and Google, among others, use open platforms that "grow through mutually beneficial partnerships and input from a wide ecosystem of developers. "
CONCLUSIONS
A borderless entity is a business that has removed barriers between employees both horizontally and vertically to create a collaborative model focused on communication across specialties to create the best product/service for the customer. Top trends in this practice are a decentralized decision making process, an emphasis on training, and a flexible distribution network.
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