“The “interdependence” of organizations is different than anything we ever meant before by this term.”
Peter’s vision of collaboration remains immensely relevant today. He believed that to give your customers what they need, you must follow two rules: first, you must do only what you do best, that is, play to your strengths; and second, to meet the full range of customer needs beyond your strongest capabilities, you must collaborate with other players, sometimes those you consider competitors, who can complement your strengths with what they do best. A tall order indeed.
…The first step in structuring a collaboration is to define your company’s “front room,” which Peter defined as your strengths, or the activity that is most important for you to do – that which stirs your passion and shows off your excellence. Everything else is your backroom, and it can be almost everything. One of Peter’s famous quotes is, “the only thing you have to do is marketing and innovation.”
In the traditional model, a business would add to its front room an array of ancillary activities needed to meet its customers’ needs. The quality of those activities might not be first rate, but the company had to have them in place to meet customer needs. The level of communication and coordination needed to team up with another organization made any other approach impossible for most companies. In the new world, collaboration is not just an option but an imperative. It is critical that you do only what you do best, that you eliminate or minimize your backroom by teaming up with another organization. With the greater transparency typical of the new world, the customer can see everything and knows your flaws and strengths. And you can connect to and use someone else’s front room, thereby better meeting customer needs and streamlining your operations in the process.
The Myelin Repair Foundation defined their front room as orchestrating and coordinating multiple elements of medical research that had never before been operationally linked. The foundation was the connective tissue joining the principal scientific investigators, the experts in the broader scientific and commercial communities, and the pharmaceutical industry. For the foundation, orchestrating meant seeking funding, helping plan the research, operationally linking the labs, providing resources, anticipating needs, and providing a healthy environment for a new, collaborative approach to research.
…As usual, Peter hit the nail on the head. As he put it, “The corporation will survive – but not as we know it. Organizations are critically important as organizers, not as employers. Often the most productive and profitable way to organize is to disintegrate and partner.”