Skip to main content
Strategies
Business Observer Thursday, Nov. 12, 2009 13 years ago

The 'Pretzel Shaped' Corporation

Share
Here's a compelling new model for transforming your enterprise, to untwist the profit flow within.
by: Lou Lasday Staff Writer

Here's an exciting concept that's making the rounds at the top tier MBA programs as they seek a comprehensive “new wave” strategy for business survival and success. It's a new model for growth and prosperity.

Originally conceived at the leadership group of Booz, Allen and Hamilton, a world icon in management consulting, it defines new relations which make traditional corporate “command and control” models obsolete. BAH partners Bruce Pasternack and Albert Viscio refer to the concept as a “centerless” corporation. It takes senior management out of everyday marketing decisions and eliminates their input from day-to-day actions. It places the responsibilities in the hands of the front-facing staff members who are most involved in the activity.

The boss steps back
In effect, the boss takes a step back while his hand-picked leadership team steps forward. Hence, senior management is no longer in the center of things; and thus, the “centerless” corporation. For simplicity, imagine your existing organization chart — regardless of its staffing size — crashing to the floor. In its place is no longer a vertical, linear chain of command. Then, imagine in its place, a chart with a horizontal pretzel. That's right — an oversized pretzel! That's how I envision it. Picture how my concept of the pretzel twists and intertwines and meets in the middle. Think of a corporate activity flowing through and around and being tied together. Rather than everything flowing up and down, it flows in whatever direction it is most efficient for it to go.

Pass the pretzel
There is a minimal staff around the corporate oval office. And, in fact, with my pretzel, the main principal becomes more of a coach; not a quarterback. And certainly not involved in every play. Think of the knot of the pretzel as the Knowledge Center, not the corporate C-suite.

While there are certainly different structures for different mid-size enterprises on the Gulf Coast, under this aggressive concept each section will still have its own group leader with full autonomy. The result is more open and interdependent. But, there's no central management core. Again, instead, each section represented by each twist of the pretzel is a bare bones operation. The core or knot of the pretzel is not a CEO, president or vice president, but rather, a Knowledge Core providing execution of the missions flowing and twisting throughout the enterprise.

In this type of shared knowledge structure, each section or twist of the pretzel, operates as if it were an independent business entity. That means there are hourly costs charged against the delivered service. Bring in the president, there's a direct cost. Use an assistant, there's a direct cost. Use graphics, there's a direct cost.

That's the beauty of the plan. There's total 'recapture” of cost. There's a billable charge to everything; even if it is not itemized, yet included in the final invoice.

The best of you
It's the leadership team that runs the show! This works because, depending on the vision and goal, the individual people of your enterprise can develop their own internal team and their own little profit centers. Assuming you have done a good job bringing the best people into your fold, trained them with your values, sold them on your vision, motivated and properly rewarded them, they are the best of you. In fact, they represent you!

As the oscillating economy reaches a new normal, and companies begin to right-size (whatever that means to you personally), mind-share professionals will rely more on their leadership team. They'll ensure both the competitive position and competitive advantage of the enterprise. With your encouragement and this flattened new twisting organization chart you will consider, your team will take “ownership” of the direction in which you want them to go.

Tighten up
Along the way, the ultimate result of this new thinking for Gulf Coast entrepreneurs will automatically tighten up the internals. Think outsourcing! Service functions like payables, data processing, human resources, advertising, printing and more find their way out the door.

“It makes sense to separate these services from the business! Businesses do not create value by performing and delivering services to themselves. They create value by developing, making and selling service and product to others”, say Pasternack and Viscio.

Since your leadership team is the linkage or connectors around the pretzel and among the many pieces of the firm, allow them to manage without your micro managing.

This flattened, twisting pretzel-like model may be ideal for small and mid-market enterprises; especially, professional service enterprises. It has a more relaxed, more responsive, more efficient and hopefully more profitable flow. Rather than managing the activities of the corporation, the celebrity CEO will continue to create and communicate the vision and goals for growth. If that's you, you will be available to “sell” your services to projects of the enablers.

So let's assume that you've been thinking about some type of streamlining. Consider this kind of creative reorganization. Only you can take the ultimate lead to make it happen. You know the internals best. You know the capabilities of your people and the needs of your marketplace. You hired them and supervised their immersion and advancement into your culture. Could this be the time to take the next logical step and give “ownership” of their function for maximum managerial performance? With your own good personalization, you have a compelling new model for transforming your enterprise to untwist the profit within.

The final word
This weekend, when you're with your contemporaries at the country club tap room hoisting a brew with chips and nuts at hand, start a striking conversation. Ask: “Have you heard about the Centerless Corporation and Pretzel Management?”

Lou Lasday creates Strategic Marketing Initiatives for Gulf Coast emerging companies. He has been a general partner of an Ad Age Top 100 marketing communications firm and Regional President of the American Marketing Association. Lasday can be reached at [email protected].

Related Stories

Advertisement