Professor Xin Rong, Professor of Management and Associate Dean at CEIBS New Products New Models New Channels New Marketing New Communication " Introduction: When new business models and new economies bring us changes beyond imagination, where will individuals and organizations go? " The business environment is changing rapidly We can see that the situation is changing rapidly, driven by technology and people's thinking. New business models and new economies bring us breakthrough changes that surpass imagination and perception. These changes are diverse, uncertain, complex, and unpredictable. Amid changes in the external environment, we can see that future organizational forms are undergoing changes. The traditional hierarchical, vertical, functional, and even distributed organizations are gradually disappearing, replaced by new organizational models. Four Forms of Future Organizations In the future, we will see more network organizations, circle organizations, platform organizations, and team organizations. Each has its own characteristics. Network Organizations In network organizations, unrelated independent organizations or teams come together with the goal of serving customers, forming nodes that constitute an interconnected, integrated, and complex network model. At each node, people come together for a task. Outsiders may not easily understand network organizations, but internally they share values and a common understanding of customer needs, constantly recombining internally. Such a network organization can maximize resource utilization and best meet individual customer needs. People work based on a shared understanding of what needs to be done. Its boundaries are not clear-cut. For example, those in R&D may eventually move into product usage stages, even incorporating new customer needs. Circle Organizations Another type is the circle organization, such as Uber and Didi. Their inner circle consists of core internal employees; the middle layer connects non-full-time drivers through their platforms; the outermost layer is the customers who need services. This organizational structure allows various resources to be used most efficiently and effectively, and all participants—including core employees, full-time or part-time drivers, and customers seeking services—can benefit. Platform Organizations Platform organizations have four important characteristics.
They have a large number of autonomous small front-end units, serving different people and customer groups in a personalized manner.
They have large-scale support platforms that support and empower the front-end services.
They generate diverse ecosystems, growing organically.
They encourage bottom-up entrepreneurship. Team Organizations Another new organization is the team organization. Michelin is such a team organization. It is a self-managed and empowering organization. One might think that new organizational structures and forms are suitable only for new organizations created in the internet era, but that is not the case. Michelin, a century-old tire brand and manufacturer, began a decade-long transformation in 2008 to become a team organization. In each factory, it invested significant resources and time to train every team member willing to participate in self-management, then shortened the production chain to form relatively closed independent teams. Each team operates as a self-managed unit, making decisions together on production scheduling, quality management, problem-solving, cost calculation, and how to create value for the entire group while also benefiting the small team. Such a massive production organization successfully transformed into a self-managed team organization over nine to ten years. The environment is changing, organizational models are changing, and companies are changing too JD.com underwent organizational reform, proposing three key points: first, network organization; second, value contract; third, bamboo grove ecological environment. Network organization is task-based, with less clear responsibilities, but the sole purpose is to meet customer needs. Tasks are issued, and everyone collaborates. The organizational structure may seem vague, but JD employees know what they are doing. The organizational chart is not for outsiders but to help internal staff understand how to collaborate. Middle management and platforms empower the front line, solving common problems, while the front line provides personalized services. JD also proposed a bamboo grove ecological environment, where bamboo roots are intertwined, sharing a common root system, yet each root has strong vitality and strong connections. SF Express has promoted a partnership system since 2014, establishing a platform to encourage internal employees, especially those in central and western regions, to start their own businesses. The company provides all kinds of help. Even if you fail in your venture, the company is willing to support you, and you can return to SF Express as an employee. If you succeed, the company continues to support you, and you can enjoy SF's support platform. SF also hired many outsourcing agencies to help employees' micro-enterprises with business registration, tax, and legal issues. The HR department's work has also changed significantly; previously it taught supply chain knowledge, now it teaches these partners how to build and lead a team, enhancing each person's leadership. In traditional enterprises, people gather to allocate limited resources; now they gather to develop more resources for sharing. When individual needs change, the era of new knowledge workers arrives Companies are changing, and individuals are changing too. After three or four decades of reform and opening up, many people have achieved a comfortable life, and they need more balance between life and work, creating new needs. For example, people in their 40s and 50s may think about how to transition, whether to become freelancers, whether to start a business, and how to contribute meaningfully in the latter part of their careers. Post-80s and post-90s generations pursue a "slash" life: "one person, multiple careers." I am a teacher, a consultant, and an entrepreneur, with many identities. Since 2016, the annual growth of newly registered enterprises has been 24.5%, a rapid increase. Mass entrepreneurship and innovation have inspired many people and generated more new needs. When individual needs change, the era of new knowledge workers arrives. The so-called 'knowledge workers' are people with specific skills. Among these new knowledge workers, some are industry experts, some are project-based (e.g., IPO, financing), some are generalists (e.g., supply chain experts, HR experts, R&D experts in a field), and some are craftsmen (unique creators in a field, top designers). These new knowledge workers consider whether they need a long-term employment relationship with a company or multiple cooperative relationships. So, the era of freelancing has truly arrived. In 2017, statistics showed that 31% of the U.S. workforce were freelancers, and 69% were employed; by 2020, it is expected to be 50-50. In 2016, China's sharing economy had 60 million service providers, an increase of 10 million from the previous year. Employment on sharing economy platforms reached 5.85 million person-times, an increase of 850,000 from the previous year. Dedao, Douyu, Meituan Waimai, Didi Chuxing, and Shoudao are all sharing economy platforms. Shoudao is a platform for sharing time and skills. You can be an HR expert and help companies solve all compliance issues related to business registration, taxation, and invoicing. If a company needs an HR expert, someone on the platform can step forward and say they have done this work, and the company can hire them for a period. On the Shoudao platform, transactions of skills and time occur. Thus, the sharing economy creates more freelancers. In the figure above, the left side shows the organization's dependence on talent, indicating how replaceable the talent is. The horizontal axis shows talent market mobility—whether a person is only valuable to one organization or is widely sought after and can switch jobs easily. The right side shows the saturation of the talent market. When an organization has strong dependence on talent, talent mobility is low, and market saturation is low, making it hard to find such people; you are suited to a strong symbiotic relationship because such people have low mobility. If you are highly dependent on talent but market mobility is high, and the talent is in short supply, they may become unstable in your company; you would want them as partners, either internal (e.g., partnership system) or external long-term freelancers. If your dependence on talent is not strong, market mobility is high, and such talent is abundant, you are suited to a market transaction relationship. If I need someone for graphic design today, I can find someone who meets my requirements. Finally, there is the dispatch/rental relationship. If the organization's dependence on talent is not high, talent market mobility is low, and there are many people in the market, dispatch/rental is likely. That is, I don't have to hire 50 people individually because there are transaction costs; I can find a third party to hire 50 people for me. They just need some skills; who they are is not important because these skills are highly replaceable. We need to think about the future relationship with employees: it may not be employment but various forms of cooperation, generally tending toward openness. So the new relationship between organizations and talent is a hybrid from employment to cooperation to acquisition. You need to see what your functions require. Finally, I will end my speech with a quote from Daniel Pink: The future is the era of freelancers. "The era of working for oneself has arrived; the old pattern of working for one organization for a lifetime is increasingly rare. Organizations now need talented people more than ever, but talented people no longer need organizations as much."