This post reflects some of my thinking for a new book on a framework to identify the large market opportunities that have consistently repeated themselves over the last 4000 years.
Image credit: en.wikipedia.org
Evangelos Simoudis guest posted in Steve Blank's blog:
"The last 40 years have seen an explosive adoption of new technologies (social media, telecom, life sciences, etc.) and the emergence of new industries, markets and customers. Not only are the number of new technologies and entrants growing, but also increasing is the rate at which technology is disrupting existing companies. As a result, while companies are facing continuous disruption, current corporate organizational strategies and structures have failed to keep pace with the rapid pace of innovation."
Much of the article is devoted to the evolution of organization structure as technology fostered changes in society. Small family firms evolved into specialized corporations that then became geographically disbursed to serve multiple markets. This very interesting history supports Simoudis' point that corporate organizations change in both strategy and structure. What Simoudis does not explain is why these organizational changes take place. The answer lies in the amount of information that an organization needs to process.
Has information increased or decreased since the Industrial Revolution began around 1770? Of course, the answer is that information has increased dramatically and since the 1960s the rate of increase has accelerated. Ronald Coase the Nobel Laureate helps us to understand why increased information causes organizational change. Coase showed that firms were organized to reduce transaction costs. Firms internalized functions when it was economically beneficial compared with buying the service. This insight defined the line between the firm and the market. Now if firms are organized to efficiently use external resources, one might logically expect that firms also organize to use their internal resources in the most efficient way. What are the internal resources? Coase described these resources as legal rights.Effectively, what Coase meant by rights is information--knowledge in workers, contracts, intellectual property, business processes, business models, etc. As JR Galbraith makes clear in "Organizational Design Information Processing”, organization form and structure is updated to process information more efficiently. This, of course, is the same behavior that complexity theory would predict. Organisms are constantly trying to organize information in order to reduce the amount of energy required for search and organizing.
Now what does all this discussion of information mean for how corporations should be organized. Brainspace has a good article, "5 Impacts of Sharing Knowledge Within an Organization,
proposing one way to look at the problem. The five key takeaways from Brainspace about how corporations should deal with information (in the future) are:
- Identify subject matter experts
- Information will be captured for reuse
- Access to information in context creates value
- Open, collaborative workflows and processes will be required
- Leaders need to gain a real-time view into the knowledge network
Brainspace identifies correctly the need for a corporation to totally redefine how they think about information and how they create it and manage it to achieve knowledge (meaning derived from information). The most important point is No. 4, where Brainspace tries to articulate the new role of the individual employee. However I think that words like collaboration, workflow and processes, Twentieth Century words, do not accurately capture the new environment. I think ants, as famous in complexity theory as ducks, may be a better way to describe this new organization. Individual ants, with no directions or orders seek out food sources, independently capture information about food and report back (through pheromone trails), which may trigger exploration by additional ants who also report back until sufficient information through pheromone confirms a good food source. Workers in the future will capture information that will be available to everyone in an organization, which will prompt various other employees to investigate.. some in more detail. A significant portion of the information will be in real time, captured by IOT sensors.
I expect that corporations in the future will:
- Assign a portion of each employee day to information management--search, analysis and curation--in order to keep up the larger volumes of constantly changing information
- Use some form of Evernote designed as an enterprise-wide app, with equal attention to the future and current environment
- Use AI to organize and re-organize information in enterprise systems, based in part on the results from individual employees doing information management
- Adopt more analytics for decision making, but realize that information capture to feed the analytics is the priority
I think that when artificial intelligence can re-organizes the information for a company’s employees to better reflect their evolving understanding of a subject, then organizations will look like ant colonies with a large number of integrated but autonomous information gathers. Some might call this holacracy, but I think "ant colonies" better captures the idea.