Success through flexibility – the ‘Flex AG’ model for the future
Unstable demand, high variance, changing requirements – companies today have to face a future without predictability. The volatility of the markets continues to increase and a new quality is emerging. Globalization has led to extreme competitive Darwinism. Although the conditions are extremely unequal, the requirements in the markets are not: high quality, low costs and short-term availability of products. The same applies to financial resources: the conditions may be different, but companies around the world are measured against the same benchmarks.
Traditionally organized companies have ‘run out of steam’ in this competition of mobility. Only highly flexible companies that radically focus on their core competencies and create variable structures that can quickly adapt to market changes will be able to keep up in the long term. The following is a comparison of the classic ‘Traditions AG’ and the future-oriented ‘Flex AG’.
Flex AG: three criteria for flexibility in the company
Focused
The radical concentration on the company’s differentiating competencies creates the basis for flexibility. The company is fundamentally prepared to change everything that is not in focus. To this end, “business services” are established that are measured against clearly defined performance criteria. The advantage: these business services are only defined by input, output and interfaces. Activities that are not strategic are handled by partners who are closely tied to the company – so that as little of the company’s own management energy as possible has to flow into the activities.
Variable
This refers to the ability to flexibly adapt cost structures and processes. This minimizes risks and achieves predictable financial results despite fluctuations in demand. At the same time, productivity, costs and capital efficiency can be continuously increased.
Standardized
Flexibility requires business processes to be harmonized and standardized across the individual business areas of a company. The background: this standardization allows the introduction of highly efficient IT business, the costs of which can be calculated on a consumption basis and possibly outsourced as a non-strategic process. The IT structures of companies also play a decisive role in this context.
Flex AG: Flexibility and efficiency through new structures
The structural differences between traditionally operating and future-oriented flexibilized companies are considerable. Traditions AG, for example, spends its energies on being best-in-class along the entire value chain. As a result, it orients itself towards industry benchmarks in all too many areas. However, claiming to be the best everywhere and at all times is rather unrealistic and too costly.
Flex AG operates in a completely different way. It focuses its already scarce management resources on expanding its core competencies and works out the value-adding difference to the competition. Only by distinguishing itself from the competition can Flex AG achieve a unique market position. A radical focus on core competencies and the consistent promotion of business services are therefore its most prominent features. Flex AG outsources everything that does not fit into this focus to external professionals.
The necessary changes in the company require a completely new way of thinking in management.
Further information on the topic of standardization can also be found under Modularization of conveyor systems – Approach to a standardized system architecture.
Image source: © Wassermann AG