Creating the Diverse Organization: How to Thrive in a Complex World

Until now, the typical response to this increasing complexity—which is the result of globalization and digitization, among other things—has been for company leaders to pursue a clear, simple strategy. Their watchwords have been focus, streamline, and lean. And in the quest for focus, the conglomerate, with its seemingly cumbersome multidimensional business model, fell out of fashion—at least in developed markets. But if homogeneity worked in the past, it is no longer a long-term solution. Because what really determines success is competitive advantage—or rather, competitive advantages—which constantly change in a globalizing and digitizing world. So the solution to the problem of complexity is not homogeneity—it is heterogeneity. We are not saying that companies should step back in time and resurrect the conglomerate, although it is striking that state-run and family-owned conglomerates are proving enduringly successful in fast-growing emerging markets. But they should embrace diversity. To do this, companies need to develop ways to serve different customer groups across a variety of regional markets with a multitude of products and services. In short, they need to become diverse organizations.

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