Just in Time
Shrinking Core, Expanding Periphery:
The Relational Architecture of HighPerforming Organizations
Adapted from Ranjay Gulati
Introduction
• Organizations are built on relationships • Winning organizations understand that capital is not only financial
– They leverage relational capital to ensure long-term success
• Relational capital is becoming a major currency of modern commerce
– Definition: The value of a firm’s network of relationships with its customers, suppliers, alliance partners, and internal sub-units
• Companies are beginning to manage relationships, not just physical assets and intellectual property
2
Introduction
• “Shrinking Core, Expanding Periphery”
– As organizational boundaries are extended, organizational centers are shrinking
• Companies are outsourcing more activities • Increase in partnerships on the vertical up and down the value chain
– Organizations are expanding their horizons through providing customers with a greater variety of products and services
• Partnerships with other firms to provide “customer solutions” • Increase in partnerships on the horizontal with companies that provide complementary offerings
– Hallmark of a new operating model – “relationship-centered organization” – Focus on both top and bottom lines at the same time – Manage costs through shrinking the core – Enhance revenue streams through expanding the periphery
3
Methodology
• Core of the analysis was to clarify attributes of firms in the top quartile on The Fortune 1000 in both 2000 and 2002 • Interviewed leaders at the top-quartile firms who were willing to discuss their responses in more detail • Conducted a workshop on best practices to find out not only the “what” but the “how”
4
Leveraging Relational Capital
• Increasing reliance on four important groups of stakeholders
1. 2. 3. 4. Customers Suppliers Alliance partners Intra-organizational business units
•
In each relationship dimension, successful firms
The Relational Architecture of HighPerforming Organizations
Adapted from Ranjay Gulati
Introduction
• Organizations are built on relationships • Winning organizations understand that capital is not only financial
– They leverage relational capital to ensure long-term success
• Relational capital is becoming a major currency of modern commerce
– Definition: The value of a firm’s network of relationships with its customers, suppliers, alliance partners, and internal sub-units
• Companies are beginning to manage relationships, not just physical assets and intellectual property
2
Introduction
• “Shrinking Core, Expanding Periphery”
– As organizational boundaries are extended, organizational centers are shrinking
• Companies are outsourcing more activities • Increase in partnerships on the vertical up and down the value chain
– Organizations are expanding their horizons through providing customers with a greater variety of products and services
• Partnerships with other firms to provide “customer solutions” • Increase in partnerships on the horizontal with companies that provide complementary offerings
– Hallmark of a new operating model – “relationship-centered organization” – Focus on both top and bottom lines at the same time – Manage costs through shrinking the core – Enhance revenue streams through expanding the periphery
3
Methodology
• Core of the analysis was to clarify attributes of firms in the top quartile on The Fortune 1000 in both 2000 and 2002 • Interviewed leaders at the top-quartile firms who were willing to discuss their responses in more detail • Conducted a workshop on best practices to find out not only the “what” but the “how”
4
Leveraging Relational Capital
• Increasing reliance on four important groups of stakeholders
1. 2. 3. 4. Customers Suppliers Alliance partners Intra-organizational business units
•
In each relationship dimension, successful firms