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2019 NDMA Inc.
Excerpt from WWW.NDMA.COM, © 2019 N. Dean Meyer and Associates Inc.

THE BUSINESS-WITHIN-A-BUSINESS PARADIGM
a compelling vision that guides every aspect of organizational design

Jobs as internal lines of business.

The business-within-a-business (BWB) paradigm is a vision of how great organizations work. It provides a definition of the end-state for transformations -- one which guides decisions at each step along the journey.

Before defining the power of the business-within-a-business paradigm, let's set aside some common misconceptions:

  • The BWB paradigm is not outsourcing or spinning off departments as independent service companies.

  • It doesn't necessarily mean chargebacks, nor operating internal service functions as profit centers.

  • It doesn't make you a passive order-taker. There are many things internal entrepreneurs can do proactively, working with customers to discover opportunities, suggesting alternative solutions, and planning for their futures.

    Internal entrepreneurs can be proactive.

  • It doesn't mean managers have a free reign, with no oversight.

  • And it certainly doesn't imply an arm's-length relationship where support staff don't care about the well-being of the enterprise.

Book: Business-Within-a-Business Paradigm

What, then, is it?

The business-within-a-business paradigm goes beyond viewing departments as internal businesses.

Some believe that executives do all the strategic thinking, managers translate those strategies into tactic that they execute, and the rest of the folks just do as their told.

The business-within-a-business is the opposite of that. In a BWB organization, everyone thinks and acts like an entrepreneur running his/her own small business. Everyone plans the future of his/her own little business. Everyone manages the execution of their strategies, and their role in greater strategies. Everyone converts strategies to tactics, and drives those key initiatives -- for their own little business within a business. And, of course, everyone does the work that within their scope and delivers results.

"Dean is truly an original thinker, and his insights have strongly influenced my philosophy and business outlook over the last 25 years."
Sandy Kyrish, Ph.D.
Assistant Dean for Finance and Administration
School of Communications and Theater, Temple University

Internal entrepreneurs know their job is not to manage the resources they've been given, or executive processes and do tasks within their responsibilities. It's to produce products and services for customers. Customers may be peers within the organization, clients throughout the enterprise, or external customers.

Internal entrepreneurs continually strive to earn customers' business through great relationships and performance.

The business-within-a-business paradigm brings out the best in people -- all traits of successful entrepreneurs:

  • Customer focus: People treat others within the organization as customers, and strive to please them.

    They say, "I understand those are my customers, not unruly children or helpless victims of my decisions. In many cases, they have the right to choose what they buy from me."

  • Results orientation: People accept accountability for delivering products and services (not just managing resources and processes). So, they know they have to meet every commitment to satisfy their customers.

    They say, "It's my product line. I know I'm accountable for delivering everything I promise."

  • Quality: People are accountable for, and gain a sense of pride in, the quality of their products and services.

    They say, "I'm proud of my work. It's my job to make it the best."

  • Efficiency and cost control: Entrepreneurs know they have to be the best deal in town. Thus, everybody is accountable for cost control to offer their products and services at competitive rates.

    They say, "I have to be the best deal in town to earn customers' business."

  • Customization: Entrepreneurs give their customers what they want to buy. They may design their products within the bounds of enterprise standards; but the resulting products and services are tailors to the needs of their customers.

    They say, "If that's what you want to buy, I'll deliver exactly that. I'll do my best to build it using common components, but I won't tell you that "one size fits all."

  • Innovation: Entrepreneurs know they have to stay ahead of their competition. (For internal service providers, competition comes from decentralization and outsourcing.) They must continually innovate to keep their products and services up to date.

    They say, "I've got to stay ahead (or at least keep up with) my competition. So I'd better innovate!"

  • Teamwork: Cross-boundary teams form dynamically as people "buy" help from internal suppliers. And since they buy others' products and services (not just staff's time), individual accountabilities within teams are clear.

    They say, "To stay competitive, I have to focus on my domain. I get help from peers when I need other specialties."

  • Use of vendors: Entrepreneurs are responsible for results, not just managing the resources they've been given. So managers propose "buy" over "make" whenever vendors can help them offer a better deal. And they remain accountable for results, even if they use vendors as part of their delivery capabilities.

    They say, "I manage a business, not just the resources I've been given. If buying something is more cost-effective than building it internally, or if I need more capacity, I'll be the first to offer the "buy" option alongside the "make" approach."

  • Safety: With that feeling of ownership, people know they are accountable for keeping their businesses alive in the future. Thus, they feel responsible for the safety of their products and services, and for the safety of their people and assets.

    They say, "If I hurt anyone, I'm totally accountable for the damages."

  • Judicious risk: Managers take the right risks to keep their businesses successful.

    They say, "I have no choice but to take some risks to keep up with my competition; but I do so thoughtfully."

  • Alignment: People "buy" just what they most need from peers. And to those peers, success means pleasing one's customers. Thus, customers' priorities ripple through the entire organization.

    They say, "I respect customers' right to choose what they buy from me, and trust that (with my input) they'll buy what they most need."

  • Empowerment: Governance occurs through market-based processes, not bureaucratic rules, disempowering oversight, or groups whose mission is to control their peers.

    They say, "To produce what you're asking of me, here's what I need." Or they say, "I'm asking this of you, and I'll ensure that you have everything you need to succeed."

Internal entrepreneurs earn the business

In summary, the BWB way of thinking brings out the best in people. The empowerment, sense of value, and creative opportunities are good for staff. It's a great place to work -- an "employer of choice" in its labor markets.

Contrary to critics' accusations, the BWB paradigm does not distance an organization from its internal customers. Respectful customer-supplier relationships, with distinct and synergistic accountabilities, lead to far better partnerships.

More broadly, a BWB organization continually strives to earn the position of "supplier of choice" to its customers. Staff always behave as if customers have a right to go elsewhere (even if internal customers have no choice but to work with us)."

"In the past, I worked at a large company that had engaged Dean to implement the business-within-a-business paradigm, and it was the healthiest organization I've ever been in."
Mark R. Schultze, COO, PerformanceG2, Inc.

And the empowerment, sense of value, and creative opportunities are good for staff. It's a great place to work -- an "employer of choice" in its labor markets.

It takes more than talk to implement this vision. Organizational structure, culture, and resource-governance processes all must be designed to induce and support internal entrepreneurship.


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