The Elastic Enterprise

Amped Up and Ready To Go

We live on an amped-up, hyper-connected planet. Anyone, any corporation, any government or any group can immediately communicate and engage in complex transactions with anyone, and increasingly with M2M commerce with any thing, or any company on the planet at any time. This new reality connects people with information, ideas and knowledge without regard to boundaries – enterprise, organizational, or national.

In this hyper-connected world our attention has inevitably been drawn to the new significance of innovation and ideas. We want to suggest, perhaps heretically, that ideas’ generation, innovation and perhaps even collaboration, three pillars of static state innovation are the wrong place for us to be looking for change. Here on the Elastic Enterprise we’d like to invite you to join us in discussing what these changes mean to the future of how we product, how we create wealth. We’re launching in mid-September so if you happen across us before do come back.

In business the biggest barrier to change, to growth, is the organisational form that served us well in the 20th century. The hierarchical corporation of the 20th century is proving to be counter productive in the 21st.

Large organizations create profound dis-economies. Scale becomes the enemy of efficiency and progress. At each unit of growth, new layers of bureaucracy have to go in to control costs, to supervise labour, to learn the new functionalities of a rapidly changing IT world. Scale is the enemy unless of course you operate in a command economy like China. Scale equals sclerosis. Even young companies like Google with profoundly new ideas about management have been caught out by the sclerosis of scale.

Implicit in that new environment is something absolutely crucial to business – a new way of organizing people. This hyper-connected environment actually presents an even bigger advantage – a new way of people organising themselves. Here we are in the middle of a revolution where many people self-organise on platforms like Facebook, Ning, Google Plus, LinkedIn, and World of Warcraft. As users and consumers we have already moved beyond scale. When we go into work…. the story is still very 20th century.

We are now over 20 years into a continuing Internet-driven revolution. But most of our enterprises persist in business strategies, procedures and operations that were pioneered and perfected before the Internet came along.

As one CEO of a large industrial company put it: “I don’t know how much longer I can drag my 19th Century corporation into the 21st Century with any hope of sustainable competitive success.”

In our discussions we find that most executives share this sentiment. Now is the time to innovate and change. Now is the time to move to a new way of doing business.

But here comes the disconnect.

Most companies are talking about innovation without changing very much. Innovation is part of the status quo.

There are plenty of reasons for that. But one overwhelming reason is that most companies are approaching innovation as a method. Pioneers of new business models are changing the way we go about creating and scaling wealth creation. Apple has over 300,000 developers working on its behalf – at their own risk. Forbes has 1,000 new contributors on an incentive rather than salaried basis. CNN has a relationship with thousands of content creators that they do not pay.

These are not just cheap sources of wealth production, sometimes free, sometimes not. They are often impassioned sources, from people with real commitment to their roles and their creativity. But perhaps more important than that they present the core enterprise with a mechanism to scale business rapidly. And if necessary to shrink business too.

This is a new model of business. It fundamentally alters the rules of scaling business, of resource allocation, and the cost and risk of doing business at scale. It transforms the potential pace at which companies can grow.

It is a revolution and it is available to any company that wants to do business in a radically new way.

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