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Today’s Organizations Are Outward Bound

THE TERM “outward bound” was originally used to describe ships departing their home port for foreign destinations. Later, it came to be associated with a nonprofit that provides youth with adventures in nature. Now it needs a third use, for organizations.

For much of the last century, the most prominent strategies of large corporations were vertical integration and diversification, pursued within their traditional boundaries, or inward bound. Vertical integration extended their chain of operations, bringing inside their boundaries suppliers at one end (“upstream”) and customers at the other (“downstream”). An automobile company might have bought a supplier of its batteries, or created its own dealerships.

When a company diversified, it bought companies in other businesses, or else developed new businesses internally, to sell additional products or services, as with Honda, which has exploited its expertise in motors to produce a variety of other vehicles — outboard motors, lawnmowers, ATVs, and so on.

Whether vertically integrated or diversified, the boundaries of these organizations remained sharp, with the new activities reporting through the established hierarchy. How this has changed.

Now organizations employ strategies to take them outward bound utilizing any of six different arrangements.

1. Networking outward

Networking is hardly new. Organizations have always done so to facilitate communication, externally as well as internally. What’s changed in…

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