Removing unnecessary intermediaries and middlemen can significantly improve efficiency and cut costs for large organizations. However, eliminating these entrenched roles requires careful analysis and planning. Follow these steps to determine if and how to organize a large company without relying on traditional go-betweens.
Evaluate Whether Disintermediation is Beneficial
Before scrapping intermediary roles determine whether the benefits outweigh the drawbacks. Ask
-
Are middlemen actually creating inefficiencies and excess expenses? Or do they provide vital services?
-
Does the company have the capabilities to take on their responsibilities effectively?
-
How complex are the tasks and processes currently handled by intermediaries?
-
What risks or disruptions might arise from their elimination?
-
How will service quality be impacted? Can it be maintained without middlemen?
-
Will the restructuring align with strategic goals and priorities?
Be realistic about the company’s ability to operate without intermediaries. Eliminating them will only improve organizational performance if their roles are truly redundant or inefficient.
Identify All Intermediaries and Scale Gradually
Once leadership decides to organize without middlemen, comprehensively map which roles serve as go-betweens. Common intermediaries include:
-
Distributors, brokers, dealers, and other sales agents sitting between suppliers and end-consumers.
-
B2B resellers or wholesale suppliers between manufacturers and retailers.
-
Third-party agencies providing services like marketing, logistics, technology, HR, accounting, etc.
Also assess how deeply entrenched their functions are. Pursue mergers and acquisitions to bring critical distribution channels and service capabilities in-house if disintermediation poses too much risk. For instance, purchasing distributors or suppliers to handle functions internally.
Phase out intermediary roles gradually to control the pace of change. Set target timeframes for specific middlemen reductions. Monitor impacts continuously when transitioning work. Being strategic and gradual mitigates disruption.
Forge Direct Supplier Relationships
Reducing reliance on sales intermediaries requires establishing close ties with your suppliers. Take steps like:
-
Communicating about forecasted long-term demand to help suppliers plan production and inventory management.
-
Providing transparency about your distribution capabilities so suppliers know you can market to end-users directly.
-
Coordinating logistics like transportation, warehousing, and delivery that previously involved intermediaries.
-
Utilizing e-procurement tools and platforms that connect your systems directly to suppliers.
-
Collaborating on product development and innovations so you can take new offerings directly to market.
-
Committing to minimum purchase volumes in exchange for exclusive direct supplier relationships.
By working closely with suppliers at multiple levels, you become equipped to handle functions previously requiring go-betweens.
Leverage Technology
Digital tools also enable disintermediation by streamlining everything from ordering to customer service to inventory control.
-
Centralized data platforms give all business units real-time visibility into supply chain operations and sales performance. This coordination replaces cross-functional intermediaries.
-
Order management and POS systems facilitate direct-to-consumer and business sales rather than relying on middlemen.
-
Customer portals and CRM systems provide self-service options to replace service intermediaries.
-
IoT and logistics tech allows monitoring and managing inventory flow without third-party involvement.
-
Marketing automation lets you deliver promotions directly to end-users without sales agents.
Integrating scalable technologies paves the way for direct coordination with both suppliers and customers.
Adjust Organizational Structures and Processes
Eliminating intermediaries can create disconnects between different functions used to communicating through shared middlemen. Address this by:
-
Assigning cross-functional teams of subject matter experts to coordinate on key initiatives and processes previously siloed.
-
Using all-company communications, collaboration networks, and knowledge sharing platforms to democratize information.
-
Empowering frontline employees to make decisions instead of relying on bureaucratic hierarchies.
-
Promoting agility with flexible structures and roles that quickly adapt to changing needs.
Updating rigid structures, policies, and cultures is necessary to enable direct coordination. Change legacies inhibiting responsiveness, openness, and collaboration.
Provide Adequate Support and Training
Removing intermediaries only succeeds if employees are equipped to handle new responsibilities. Invest in:
-
Change management programs helping teams adapt to workflow changes. Address uncertainty and build capabilities.
-
Training programs teaching employees the skills previously provided by intermediaries like sales, relationship management, analytics, and more.
-
Job aids, online resources, coaching, and mentoring to embed new competencies.
-
Improving systems, tools, and infrastructure to empower employees to take on intermediaries’ duties.
Without proper support, disintermediation leaves dangerous gaps. Manage change proactively via learning programs, communications, and system improvements.
Key Takeaways on Organizing Without Intermediaries
Eliminating inefficient intermediaries can add value. But organizations should:
-
Weigh benefits against risks before disintermediation. Move gradually and strategically.
-
Forge close supplier partnerships and leverage technology to enable direct coordination.
-
Adjust structures, processes, roles and culture to remove silos.
-
Build employee capabilities to take on new cross-functional responsibilities.
With sufficient planning and investment in capability development, large companies can transform themselves to eliminate unnecessary intermediaries. This streamlines operations, reduces costs, and improves responsiveness. But organizations must be strategic in determining which intermediaries provide true value in connecting functions – and which are just redundant middlemen to be removed through organizational redesign.
Skip the intermediary and deliver directly to customers
Recipe
Also called: Disintermediation, Direct selling, Cut out the middleman, Direct to consumer, D2C
| Key Partners | Key Activities | Value Propositions | Customer Relationships | Customer Segments | |||||
| Key Resources | Channels | ||||||||
| Cost Structures | Revenue Streams | ||||||||
How: Bypass the traditional sales channel to target end-users directly. Sell door-to-door, through company-owned stores, or through an online web shop.
Why: Skip retail margin and any additional costs associated with intermediates by selling directly from provider to consumer
This business strategy is part of the Business Model Patterns printed card deck.
Proven business models that have driven success for global leaders across industries. Rethink how your business can create, deliver, and capture value.
In the No Middle Man business model, a company dispenses with intermediaries and makes its products and services available directly from the manufacturer. By doing so, the company is able to circumvent the expense and inefficiencies of retail profit margins and other costs. These savings can then be passed on to the customer, creating a mutually beneficial outcome for both parties.
Not only does this model yield financial advantages, it also facilitates a more personal and intimate sales experience with customers. This allows the company to better comprehend their needs and preferences, which can in turn inspire new ideas for product and service improvement.
Moreover, the No Middle Man business model grants companies a higher degree of accuracy and control over sales information. This enables them to maintain a consistent and uniform distribution system, thereby ensuring that customers receive prompt and effective service. This is particularly beneficial when dealing with products and services that require comprehensive explanations.
Use This Approach to Begin Contacting Companies
How to coordinate activities and tasks in large organizations without middle management?
4. Coordination Coordination of activities and tasks in large organizations without middle management happens mostly via direct person-to-person interaction and digital tools. Top management has established clear “rules of the game” to coordinate all activities and tasks as efficiently as possible.
What is the organizational structure of large organizations without middle management?
2. Organizational Structure The organization structure of large organizations without middle management is based on a ‘network of teams’ structure. Employees self-organize into teams around tasks with end-to-end responsibility. New self-organizing teams are initiated by groups of entrepreneurial employees.
Is it possible to organise without managers?
Organise without managers seems therefore possible also at scale. And the ingredients seem not to be extremely complicated. Above all, it appears that there is a strong sense of intentionality in not creating useless management levels. There is also a strong focus on creating consistency across all of the levels in the organisation.
How do you organize for success?
Organizing for Success: Map out your Organization Structure! Perhaps the most important resource of an organization is its people. So the role people play, how they interact through formal and informal processes and the relationships that they build are crucial to the success of any strategy.
