Yesterday I looked at the differing ways in which social business can benefit you, depending upon the kind of organisation you are. Broadly speaking, I believe organisations fit somewhere along an axis that has make and sell at one end, and sense and respond at the other. As this distinction is pretty important, I thought it would be worthwhile spending some time helping to clarify the differences between the two so that you can gauge where you fit on the axis.
The following are a few key issues, and the distinction between the two organisation types for each issue.
Strategic mindset
Make and sell organisations typically try and be as efficient as possible in serving well defined markets
Sense and respond organisations typically respond to unanticipated requests in unpredictable environments
Processes
Make and sell organisations typically utilise mass production, therefore have repeatable processes and clearly defined job descriptions
Sense and respond organisations typically utilise modular processes to produce customisable products and services
Strategic imperative
Make and sell organisations often favour efficiency above all else, with this also tending to make business predictable
Sense and respond organisations by contrast favour speed of response, and therefore invest in the capabilities to understand and then react very rapidly
Where profit comes from
Make and sell organisations usually earn their money by having large economies of scale, coupled with low costs from a standardised manufacture
Sense and respond organisations keep costs manageable by developing re-usable modules for their processes, but can charge higher prices for custom solutions
Information management
In make and sell organisations, information tends to revolve around functional silos, with each then having specific processes unique to them
Sense and respond organisations by contrast support more decentralized decision making, with information flowing across and throughout the enterprise in order for the best decision to be made
There are no doubt other differences that define and identify the two types of organisations, but these should enable you to have a reasonable idea of the kind of organisation you belong to.
Great article Adi! Your two broad demarcation of organizations makes for an interesting read. Though Make and Sell makes complete sense, completely reflects a typical manufacturing enterprise. But its sense and respond, which I think is difficult to define because what I understood from your description, every other organization not into manufacturing falls under sense and respond.
Take for example, I am a consultant firm and offer expertise in wide range of areas like public relations, communications and business consultancy, but I find it hard to put in many of your defining parameters of sense and respond. So don't you think, you should sub categorize sense and respond to more specific niches or I misunderstood some thing?
Hi Jim, thanks for the comment. I think consultancies often fall into the sense and respond category because each assignment is largely just that. You're responding explicitly to a request from a client.
Not all knowledge work is thus though. Many public sector bodies for instance, or healthcare, often fall into this kind of trap. Education can also be very make and sell. I'm writing a follow up post to this at the moment using the example of buses and taxis, with the bus being an example of make and sell, and the taxi being an example of sense and respond.
Does that clarify things a little? The table in the post is certainly not an exhaustive checklist, but more perhaps a few indicators to give you an idea of the kind of thinking that embodies each kind of organisation.
Thanks for clarifying Adi, I had been keeping busy lately and missed your post. I would be looking forward to your post or it has been already published?
You're welcome Jim. Here is the post I mentioned.
http://adigaskell.org/2014/01/22/is-your…