Handy model is a real organizational challenge to retain and motivate employees. As Handy said:
“The old model of the corporation was a piece of property, a piece of real estate. It was, quite simply, the property of its owners. … The new model is based on an understanding that to hold people inside the corporation, we can’t really talk about them being employees anymore. To hold people, there has to be some continuity and sense of belonging. We also have to talk about two-way commitment – corporation to member, member to corporation”[i]
In its latest incarnation, its core business is to collect customers, collect sensitive buying information, and then pull this information together into individual customer profiles. These are used to promote and bundle unrelated products such as toys, electronics, books, and videos for the specific customer. This type of virtual business morphs depending on market conditions and customer requirements. It’s core business is no longer a product or service, but a business model.[i]
Why is this important? Many if not all industries and companies are being ‘amazoned.’ Internet lenders are destroying traditional banks by offering high margin loans and on-line services. Internet classified advertising is stealing the biggest profit center of a newspaper. Internet storefronts are offering products and services directly to the consumer eliminating the middle person and distributor.
[i] Wysocki, Bernard, “Defining Challenge: Corporate American Confronts the Meaning of a ‘Core’ Business,” Wall Street Journal, November 11, 1999, p. A1.
[i]Handy, Charles, “Corporate Center,” Executive Excellence, December, 1998.