by Joe McKendrick
February 19, 2008 at 3:36 pm
· Filed under 2.0 Design Thinking, Artisanal Economy, Change, Collaboration, Economics, Enterprise 2.0, FASTForward '08, FASTforward08, Messy World, Social Networking, Wikinomics
In his keynote at FastForward 08, Don Tapscott asked a question I’ve always wondered about: “Why does the ‘firm’ exist? …Why isn’t everybody an independent contractor at every step of the proecss?”
I’ve always felt that there’s entrepreneurial energy in all of us, and that being relegated to worker bee roles stifles that innovation, locking it into a 9 to 5, two-week-vacation-a-year cage.
Don answered the question with the fact that the cost of transactions has historically been too high for most of us to bear.
Well, the times, they are a changing. Enterprise 2.0 has changed that equation dramatically. Don pointed out that collaboration costs have dropped dramatically, to the point where people are peers, and the can interact beyond the bounds of the traditional corporation.
Don offered an example of Goldcorp, a mining company, which had the challenge of locating new sources of the mineral within its properties.The company’s in-house staff of geologists were unable to identify new sources with the information they had. The CEO decided to open up all the information it had on its properties, including geological data, and offered a reward to anyone out on the net who could help locate new sources. Geologists and non-geologists alike offered information that led to new finds, and the company has grown from $90 million to $10 billion in assets.
Dare I say it? There’s gold out in them thar Enterprise 2.0 hills.
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Joe,
If you poll the consumer Web apps developer crowd, you’ll see the extreme of what Tapscott talks about–independent contractors, many of them, and most of the rest are at small companies. Digg had six people or less for years. But that sort of work is often solitary anyway–it’s go off and code for hours, then come back and get some feedback, then go off again and code….. Purely online environments require the custodians to become part of the machine, really, to borrow an O’Reilly observation.
That’s hardly the only kind of work there is. Even highly analytical work can be highly interactive, and it often benefits from teams being quite close together physically. Then there’s the scale economies of firms who specialize in good execution…. Sure, companies benefit from fresh ideas from the outside, but what Tapscott didn’t mention about Goldcorp was what happened after they reviewed the suggestions from the public Web. A lot of good execution had to take place for them to mine and process all that gold efficiently and effectively.
It’d be an interesting exercise to ponder the inside/outside benefits of strategy and planning vs. execution. My guess is that execution requires a lot of standardization, which requires a lot of working closely together, and frequent feedback and response…. Insiders, mostly, in other words, even if they’re ostensibly “contractors.” Meanwhile, good strategy requires timely, but less frequent infusions of insights from the likes of the Tapscotts and the Weinbergers….. Objectivity and reflection are important in these circumstances….
Historically, companies have been a closed environment generally ruled by its own unique set of politics. Every now and then these closed environments would bring in an outside ‘consultant’ to get an objective point of view to help move them forward. Usually this was simply lip service to codify those in the organization who were continually complaining about the obvious issues that business had.
Once the consultant was gone…things went right back the way they were. I have personally witnessed this on more than one occasion.
But now things are different. Things are much more transparent, communication and collaboration is much easier…and keeping the knowledge and power close to the vest is much harder.
And yes…this is a result of Enterprise 2.0…Web 2.0…social networking…all of which mean that people at all levels in an organization are talking and sharing.
Harder to control, but infinitively more productive. And the smart managers will take advantage of this.
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