chapter  7
26 Pages

The creative configuration

Any corporate centre that seeks to create value through operating in the creative configuration has to overcome three significant challenges. First, it has to achieve avery high degree of buy-in from awide range of people across the organisation to the key vision and associated set of values that the centre establishes as the core common elements of the group. Second, it has to achieve this while employing an indirect method of involvement in the underlying businesses. Third, even achieving this buy-in does not guarantee the creation of added value by the corporate centre, as the true added value reason for the creative configuration continuing as a group is generated by the business units working together to create new corporate know-how.This means that all creative configuration groups should be highly innovative, as they develop new know-how on a regular basis that can be exploited within the group, as is shown in Figure 7.1. Thus the creative configuration corporate centre has to establish

an environment across the group that motivates people from different business units to work together to create new value-adding ideas for the group. The corporate centre can facilitate this process by bringing different parts of the organisation together to work on group based projects and it can also encourage more informal contacts across the group. Both of these can be stimulated by more formal corporate centre-sponsored group-wide events such as conferences, training programmes, R&D exhibitions and a regular communication process covering all the business units. The corporate centre is trying to create a strong group identity that

subsumes the individual business unit cultures into a greater whole.

This should mean that, although the separate businesses within a creative configuration groupmay operate in very differentmarkets employing different technologies incorporated into dramatically different products that are sold to different types of customers, all the business units in the group have a common feel to them. Consequently managers at various levels can be moved around the group by the corporate centre. Such moves, particularly at very senior levels, are often used as away of reinforcing the group’s vision and values. The critical role of the centre in the creative configuration is the

development and communication of, and achieving commitment to, this corporate vision and set of values. As a result, the real corporate centre should be quite small and cohesive. However, in some creative configuration groups, there may seem to be a quite large corporate centre as some critical know-how creating processes, such as Research and Development, appear to be centralised. As is discussed in depth in this chapter, the key issue is where the control over these R & D resources resides. In a creative configuration group, these resources are actually controlled, and often provided, by the business units rather than being directly controlled by the corporate centre. If the leader style corporate centre is successful in stimulating the

creation of new corporate know-how, it faces a fourth challenge. The centre now has to find a way of exploiting this new know-how without destroying, or at least severely damaging, the very fabric of the group. Leveraging existing knowledge across a group by direct intervention is the domain of the scope configuration. The consultant style of corporate centre is very different fromthe leader style of centre in the creative

configuration.There are many examples of groups that start out in the creative configurationbut, once they start to be successful, they rapidly make the transition to the scope configuration. Unfortunately this can often stop the generation of new corporate know-how as business unit managers increasingly focus on their own businesses and the exploitation of existing knowledge. However if the corporate centre can find amechanism to exploit the

new know-how while maintaining the innovative corporate culture, it can continue to create value in the most sustainable way of any of the four corporate configurations. Unfortunately there is an obvious danger of continually creating new know-how but never managing to exploit any of it to create shareholder value. Such a group would undoubtedly be an intellectually stimulating and exciting place to work, until it went bankrupt!