It's a sign of things to come that the events of just a decade have challenged almost everything about the organisation built in the previous nine and more. It was taken for granted that if a corporation had large plants, was vertically integrated, and had extensive presence in markets, it would succeed. Now we know that's not only not true, but it could in fact be a recipe for its demise. For an enterprise to be initiated and sustained, there must be a reward for those who participate in it. Corporations with non-distinct assets simply don't generate enough rewards because too many of them are chasing too few buyers with identical products and services. They can change, but the problem is that their systems and structures are too rigid to anticipate, or even move with, changes in consumer demand.

What has brought about this dramatic transformation is, of course, the internet. It has changed the business environment fundamentally in four ways. One, it has broken down barriers by connecting people across the world. Two, it has created information equality. Third, it has created a medium for a type of industry to expand globally with a speed and at costs inconceivable only a few years ago. (And that type of industry is based on ideas-and not iron and steel of the early 20th century corporation.) Finally, information technology has opened up revolutionary ways of understanding, interacting, and servicing the customer.

So, the successful organisation of the future will be one that is able to make the most of the new opportunities that technology offers; reconfigure itself quickly enough in response to market turbulence. Those could also be the so-called Old Economy companies, but chances are slim. Just like unprecedented wealth creation by industries lured labour into the industrial economy, the technology age will draw talent away from old economy. Not incidentally, the contribution of Fortune 500 companies to the American GDP has been declining over the past 30 years.

To capitalise on the opportunities of the new economy, organisations would need to be configured differently. They will be smaller, have smaller workforces and lifespans. Since their raw material will be ideas floating anywhere in the world, their core activity will involve identifying and implementing them. To facilitate sourcing of ideas, the 21st century corporation will build around itself a galaxy of satellite firms. Teams will consist of highly-skilled people, and be deployed project to project. New companies will be incubated within the organisation and spun off later to realise wealth for its creators.

Outsourcing will become the norm. Already, companies have started farming out routine tasks like accounting, it maintenance, and housekeeping. Tomorrow, the list could include activities such as manufacturing, servicing, and even selling. The corporate core would confine itself to research and development, branding, marketing, finance, and people management. The middle management would have almost completely disappeared. Management thinker, Peter Drucker, goes as far as to say that profit-making will not be the organisation's main goal anymore. Rather, it will be to create wealth for the society. May be. But the 21st century organisations will still be about what they are today: people, customers, and wealth.

A Preview Of Tomorrow's Organisations

Organisations as we know them today will disintegrate in the future. The new structures will be more fluid. Departments, units, and divisions are expected to disappear and give way to multi-disciplinary and multi-skilled teams. BT takes a look at two organisations that have started making their moves towards the future:

Polaris: a new structure for success

Polaris Software
In June 2001, Polaris moved away from the strategic business unit structure to a process-driven structure. The traditional SBU structure had been adequate for growth till that point (Rs 250 crore), but to grow further, the Chennai-based company realised that it needed to increase synergy within the organisation-to elevate the thinking of employees from a divisional level to the organisational level.

Three basic processes of the organisation were identified: Getting customers, servicing customers and getting knowledge. According to IIM-A professor Ashok Korwar, who is the brain behind the design, ''The idea was to identify the three constants Polaris had going forward into an uncertain world.'' The organisation has now been divided into SRDUs (Strategic Relationship and Delivery Units) and SPUs (Strategic Practice Units) and the GSOs (General Sales Organisation). It is upto the GSO to get new customers. After that the SRDUs are the customer focused units-a single point of control responsible for project delivery.

The new system is a radical departure from Polaris' earlier structure comprising SBUs, which were more competency and market focused, with minimal cross-selling. The Strategic Practice Units (SPUs) will concentrate on leveraging Polaris' horizontal and vertical competencies to disseminate these competencies in the organisation. The focus is clearly to build knowledge in practice areas.

The SRDUs have the flexibility to pull in competence from all over the organisation. It will pull in resources as per the project requirement. Says CEO Arun Jain: ''We are entering a knowledge-based era, where we cannot forecast what will happen, but we can ensure that our structure gives our people the ability to cope with challenges.''

Around 30 SRDUs focus on consistency of delivery on projects, in an effort to sustain long-term partnerships with clients. The company will have around 12 vertical SPUs spread across industrial competencies and around 22 horizontal SPUs across technological competencies. These SPUs will form the second organisational pillar and will fuel the growth engine, while the SRDUs will provide the cash engine for growth.

Andersen
At Andersen, the structure is even more flexible-based totally on the client's needs. Teams are continuously formed and disbanded depending on the nature of the project. The teams are given full access to the capabilities of the firm. The structure provides for a mix of focus on multiple roles through clients, industry, solutions, and internal processes. Care, however, is taken to ensure that the solutions and markets chosen are consistent with the company's capabilities. At the end of the day, the firm says, clients want solutions to their issues. A major focus, then, is to find the optimal alignment between client needs and organisational capabilities.

To enable this kind of integration, Andersen uses world-class tools, frameworks and methodologies. However, doing so involves managing an apparent paradox: that of being focused and integrated at the same time. Integrated around the market and clients, but willing to accept the inherent boundaries that define focus, and simultaneously, cross-organisational boundaries.