We imagine a 21st-century corporation designed to capitalize on connected systems, data, and employees who take a more expansive view of work.
Today’s companies aren’t like yesterday’s. They can’t be—not in a world where everything and everyone is connected at little extra cost. The 21st-century corporation will be bigger than ever, faster than ever, and nimbler than its predecessors and enabled by a new Industrial Revolution. What does one look like on the inside? We imagined the perfect future company—then cracked it open to show how differently it operates.
Let’s Get One Thing Straight
See the café to the left? Your company is operating from it at least some of the time. More people are telecommuting than ever before: 37% in some fashion, per a 2015 Gallup poll, up from 30% a decade ago and 9% in 1995. Most workers who log in from elsewhere do so only occasionally, averaging six days a month. But in the 21st century, it’s a sure bet that your company’s office is a resource, not a requirement.
Back to the Bus
Perhaps Silicon Valley is onto something with its shuttle systems. Though the buses are a lightning rod in the gentrifying San Francisco Bay Area, they efficiently carry thousands of employees of Apple (AAPL), Facebook (FB), and Google (GOOGL) (among others) to work each day, sparing the carbon emissions and hassle of individual passenger vehicles. Your renovated corporate headquarters ditched private offices. Why not private parking spaces too?
A delivery truck that arrives a few minutes late can create network effects that result in angry customers. A machine that suddenly breaks down can derail a factory’s production schedule. HVAC costs may be way out of line at a retail store. The best way to solve these problems? Real-time operational intelligence. Using sensors and software, companies are turning their operations into opportunities for better decisions.
Power to the People
No one actually enjoys the annual employee performance review. But let’s be honest—some feedback is better than none at all. Research shows that one growing group of employees wants it far more often than once a year: millennials. Workers in their twenties and thirties say they prefer continual feedback, not periodic sit-downs with their managers or the human resources department, to talk about their job performance.
Startups like Kanjoya, WideAngle, and Y Combinator–backed Impraise have developed software tools to help managers regularly churn out written and verbal micro-evaluations. (Think: more like Twitter than a tax return.) Fortune 500 firms such as General Electric (GE) and Microsoft (MSFT) have embraced the idea, keeping feedback-starved millennials engaged and putting the annual review on notice.
A Better Way to Beat the Bad Guys
Passwords, tokens, and key cards are only as strong as employees’ best practices. Biometric security measures, which eschew passwords for biological identifiers like fingerprints, iris scans, and facial recognition, reduce the chance that human error enters the equation. (Plus, are you really going to add more hoops for your employees to jump through?) As such, the global biometric tech industry is projected to grow to $41.5 billion by 2020, from just $14.9 billion last year.
A Scan a Day Keeps the Trouble Away
Today’s compliance teams sift through massive sample sets of emails, texts, chats, and other corporate communications, hoping to catch signs of employee wrongdoing. But new generations of machine-learning software can digest the entirety of a company’s written correspondence in real time. Want to catch rogue trading, information leaks, and other misbehavior before it becomes a problem? Call on the machines, says Tim Estes, CEO of Digital Reasoning, a cognitive-software company. “We can now automate tasks that before were unimaginable, like reviewing company emails to see if employees are disclosing subtle proprietary information about a deal,” he says. “A machine doesn’t have motives. It doesn’t have an agenda. So if you want to protect people without invading their privacy, the secret to that is smarter machines. The answer can’t be more humans, and current machines are so bad that it can’t be them either. It has to be software that can learn.”
Mint Money More Intelligently
CFOs are evolving. Here are three ways:
1. They’re moving to the cloud. One in five companies has replaced its accounting systems and financial tracking applications with cloud-based alternatives, per Deloitte.
2. They want to predict the future.
Analytics will be more important in the next three years, say 96% of senior execs.
3. There’s money at stake. Companies will spend more than $23.1 billion on financial management software this year.
It’s Time to Rethink the “T” in CTO
Three years ago, a Harvard Business Review headline blared, “The New CTO: Chief Transformation Officer.” We still agree. It is clear that corporate tech has quickly evolved from being a cost center to serving as an enabler. And the best stuff can’t be bought: 69% of execs think custom software is necessary for digital transformation, according to Appian, but roadblocks hold it back. Who will keep traffic moving? The CTO, of course.
Nice to Meet You Boss
Notice something different at work? Try the person in the corner office (if there still is a corner office). Analysis by Strategy&, the strategy-consulting arm of PricewaterhouseCoopers, shows an unprecedented amount of CEO turnover in 2015 and a growing tendency to look for new leadership outside the company. Seventeen percent of the world’s 2,500 largest companies replaced their CEOs last year—the most turnover at the top since PwC began keeping score more than 15 years ago. In recent years, those new top execs were increasingly hired from elsewhere, even during planned leadership changes. It’s clear that 21st-century companies prefer a new perspective. One catch, though: Fewer than 3% of incoming CEOs in 2015 were women, the lowest share since 2011. Even in the 21st century, some 20th-century habits linger.
Operation: Information Agility
“Tech has become core for every company. Everything is coming at us a lot faster than it did before. We have to be able to live in a world where we can absorb the new things and rapidly adjust our view of the future rather than have a fixed, multiyear plan. Roles like chief digital officer and chief innovation officer are showing up because the CIO is not leading and driving differently.” —Jim DuBois, CIO, Microsoft
A Structure Built for Success
According to Deloitte:
- 92% of leaders believe it is critical to redesign their organization to meet global demands.
- 45% of leaders say their companies are either in the middle of a restructuring (39%) or planning one (6%).
- 89% of leaders cite strengthening, reengineering, and improving organizational leadership as an important priority in the year ahead.
- 56% of leaders say their companies are not structured to produce the leaders they need.
Your Corporate Cloud Needs a Crew
Today’s companies: “I need a cloud! But what kind?”
Tomorrow’s companies: “I have a cloud. How should I use it?”
For years, businesses debated whether they needed a public, private, or hybrid cloud-computing platform. With choices, capabilities, and concerns addressed, they’re now hunting for talent to handle it all: 32% say they lack the resources or expertise to manage cloud workloads, according to RightScale.
Tech to Instill Trust
Tech has a tendency to cause marketers “shiny object syndrome,” says Don Branch, chief marketing officer for 3M (MMM), and distract them from their true aim: reaching customers. But done right, “tech becomes the enabler,” he says. “Fifty-seven percent of B2B buyers make buying decisions before engaging with sellers. That’s a dramatic shift. The old days of printing literature to put in a trade show booth are gone.” Today it’s about tapping the power of predictive analytics. “I need to know you and anticipate you coming back for the next step in a journey,” he says. “That’s the holy grail.”
Say Goodbye to the Hard Sell
“Ten years ago you never could have done some of the things we can do now, because visibility into individuals was so opaque. Now you can pick up on the digital wake that people create.” —Justin Shriber, head of marketing, LinkedIn Sales Solutions
“The cloud, social, mobile, the Internet of things—we have all this data, and it’s beyond human capability to understand what to do with it. We’re going to see machine-learning tech detect patterns, find correlations, make predictions. Analytics will look forward into the future, not back into the past. And it will start to make decisions. That’s going to create the next level of contextual information about what a customer needs.” —Scott McCorkle, CEO, Salesforce Marketing Cloud
“Soon it won’t be enough just to be automated. Now that I have all of this data, there’s no reason I can’t use it to get predictive and let the tech start making decisions for me. It’s a fundamental competitive advantage that’s going to reshape my P&L.” —Kevin Akeroyd, GM, Oracle Marketing Cloud
Yes, You Need Data Scientists. But Not Many
A few years ago it became clear that companies awash in information needed data scientists to make sense of it. One problem: The highly educated, cross-disciplinary role was impossible to fill. Today, expectations have settled. Empowered by natural speech processing, cognitive computing platforms like IBM’s (IBM) Watson aim to create “citizen analysts” out of your workforce, leaving only the most difficult challenges to data scientists.
A Meeting for Every Room
Why resort to a meeting room to call or videoconference with colleagues? Rowan Trollope, general manager of Cisco’s (CSCO) Collaboration Technology Group, says the 21st-century office will be packed with embedded sensors and displays. “Cameras will be built into the walls and ceilings, and a computing fabric will connect spaces,” he says. “With open workspaces, the room as a metaphor has almost fallen out of favor.”
For more, read our Q&A with Ryan Anderson, director of product and portfolio strategy at Herman Miller.
I, For One, Welcome Our New Robot Colleagues
According to McKinsey:
- 45% of activities that companies pay humans to perform can be automated using tech available today.
- An additional 13% of activities could be automated if tech that “understands” spoken language performed as well as humans.
- 60% of occupations could have 30% of the job automated.
- 5% of occupations could be entirely automated.
A New Production Process
HP Inc. (HPQ) chief technology officer Shane Wall believes we are facing a new Industrial Revolution—“a complete transformation from an analog supply chain to a fully digital one,” he says. “On the front end, we will change how we design parts. On the back end, we’ll actually print those same parts ready to be used.”
Wall is talking about industrial 3D printers, which his company sells. The technology has already changed manufacturing, and it will continue to reshape the production process in ways we once thought unfathomable, he says. “In the next five years, we’ll be able to print parts that are one color on the outside and another on the inside so you can visibly see them wearing out. We’ll be able to print parts with sensors like strain gauges on the inside. We will be able to print security information right into the parts themselves, giving companies the ability to trace any part through its entire life cycle and cut down on counterfeiting.”
And what if your company doesn’t make widgets? “Radical changes in the manufacturing ecosystem” will still affect you, Wall says. “Our entire system of taxation is based on where objects are manufactured and where they are imported. Imagine when you don’t have to do that. The implications to our society and the companies in it will be profound.”
Perks for Productivity? Maybe.
Want to attract and retain the best young talent? Your company might do well to look past lavish perks like Ping-Pong tables and climbing walls. (After all, with the highest employee turnover rate, according to PayScale, tech companies may use perks more as tools for marketing than retention.) Instead, focus on how incoming employees actually want to work and live. The No. 1 request, according to a TechnologyAdvice survey? A flexible schedule, with gym reimbursement a close second. Turns out the in-house ball pit is just a Band-Aid for bigger work stress issues.
Don’t miss our Q&A with Ryan Anderson, director of product and portfolio strategy at Herman Miller.
Check out the new Fortune 500 at fortune.com/fortune500 for company profiles, financial data, stock quotes, CEO videos, interactive graphics, breaking news, and more.
For more on the 21st-century corporation, watch this Fortune video:
A version of this article appears in the June 15, 2016 issue of Fortune with the headline “Does Your Company Look Like This?”