I've now finished Charles
Handy's Age of Unreason and Age of Paradox. They were both
written a little over a decade ago, and the thinking in them is dated,
almost quaint, coming as it did before the dot com boom and bust, the
'offshoring' of jobs and the events of 9/11. In these two volumes,
Handy grapples with the future of organizations and their inability to
balance the needs of shareholders with those of employees, suppliers,
customers and the community. He laments the soullessness of modern
corporations and their abject failure to deliver the global prosperity
and equity that advocates of globalization and 'free' trade had
promised. He describes the resultant paradoxes -- such as half the
people working absurd hours while the other half are un- or
under-employed, and the paradox of productivity:
Economies have traditionally
grown , in measured economic terms, by turning unpriced work [e.g.
child care, senior care, home repairs and maintenance, which most of us
used to do ourselves] into priced work because that work can then be
counted. The irony [in this economy] is that, although the economy
appears to grow, the work that is done may actually be reduced. By
pricing the work, we turn 'activity' into 'jobs' and create employment,
but then some work gets too expensive for most customers to afford and
so no longer gets done at all. And in many cases we can't do it
ourselves for free because we've forgotten how to do it. The activity
disappears. By pricing work we can actually destroy work, but we will
never notice it because it never got counted in the first place...
The new growth sector for work is the do-it-yourself economy [looking
after the young, the old and the sick, doing our own repairs and
maintenance, growing our own food, plus self-employment and the
underground economy]. As more and more people get pushed out of
organizations [in the endless pursuit of more 'productivity'] it makes
good economic sense for them to do themselves what they used to pay
others to do...when they now have more time than money. But this new
growth sector is largely invisible [it is not measured as 'productive'
because
it is not 'paid work'. It is the precise reversal of what had happened
in the
traditional economy].
Handy goes on to contrast the Anglo-American adversarial culture,
reflected in the business 'kill or be killed' competition ethic and the
justice system ("a conflict between opposites is the best recipe for
fairness") with the European/Asian 'trinitarian' culture ("looking for
solutions which can reconcile or illuminate the opposites"), reflected
most famously in the French motto "liberty, equality, fraternity",
where the third element serves to mitigate the inherent tension between
the first two.
The meat of the two volumes is the prescription for a 'federation'
model of business to replace the old 'hierarchical' model. The
federation model entails balancing business control between the centre
(management) and the ends (front line), and requires adoption of two
principles: twin citizenship
where each worker becomes a 'member' of both their front-line business
unit and the larger organization, and subsidiarity
where the tiny centre is voluntarily ceded just enough authority by the
front lines to look after needed coordination, resource allocation and
crisis intervention decisions. Handy quotes a 1931 papal encyclical to
illustrate just how important it is to keep the centre from becoming
too powerful: "It is an injustice, a grave evil and a disturbance of
right order for a large and higher organization to arrogate to itself
functions which can be performed efficiently by smaller and lower
bodies." Citing Occam's Razor, Handy asserts that the centre must be
both "as small as it can be and as large as it has to be".
Most of this is consistent with the principles I've espoused earlier
for what I call New
Collaborative Enterprises (NCEs) -- self-selected, self-managed
groups of equal partners (members) who possess complementary
non-redundant skills and expertise in a field of endeavor, making a
living together following a set of agreed-upon principles that place
members' well-being (as each member defines it) ahead of profit.
It is also consistent with the evolution of business from
self-contained hierarchy, to 'shamrock' organization (involving more
outsourcing, contractual workers and temporary/part-time workers), and
ultimately to a World of
Ends, where the managing/aggregating 'centre' disappears completely
(and with it, large powerful corporations) as NCEs use current
technology and social networking to contract with each other to meet
customer needs more effectively, with greater agility and at lower cost
than they ever could under greedy, dominating multi-national
conglomerates.
Handy, at least in his 1994 thinking, would suggest that a pure World
of Ends in business is just too anarchic -- that there has to be some
'centre' left to coordinate the ends, just as the human body cannot
function without a brain. I would hope that a decade later he would be
prepared to go the final step and acknowledge that, just as our Earth
organism seems to be able to function (sorry, theists, I'm about to
offend you again) without a central guiding hand, so too should human
enterprise (as it did for the first three million years of our
existence on Earth). Modern technology is ultimately all about
connection, and I believe we are now so well connected,
business-to-business and business-to-customer, that we are within reach
of a true World of Ends where central management is obsolete. The grey
dot in the World of Ends chart above, in other words, is just 'the
network'.
What may be needed is a 'virtual federation' of independent
businesspeople and NCEs. I don't believe such a Federation needs to
have any authority, or any employees, or make any decisions, but, just
like the Internet, it needs a central registry, and some databases and
social networking tools to link together businesspeople, NCEs and
customers. It would serve some of the functions of an employment
agency, but do so completely transparently, allowing members to
contract with each other and with customers through its auspices and
technologies. It would serve some of the functions of a business
incubator, allowing independent businesspeople to create new NCEs and
to identify other people with whom they would like to make a living,
either for the term of a customer contract, or for a lifetime. And it
could serve some of the social and financial (but not political)
functions of a Buying Group or Trade Association, gathering information
and collecting and remitting funds on behalf of member NCEs to receive
volume discounts from suppliers and hence giving Federation members the
same economies-of-scale benefits that large organizations and
oligopolies receive, with none of the associated costs (financial and
other) of such large organizations. I've been involved in the
organization of Buying Groups, and they are interesting creatures: very
lean and collaborative, and only limited by the deep distrust that
businesses in our Anglo-American culture have for their competitors.
I'd propose that the Federation obtain all its tools, databases,
collaboration spaces and technologies organically and without cost to
members, by voluntary contributions from members, built collaboratively
by the members for the members in the members' spare time. Don't impose
infrastructure, in other words, let the members compare and tinker and
choose what works for them.
And I'd propose that any individual
could be a member of the Federation, and create or join NCEs, provided
they are not restricted by their current employer from contracting
independently to supply goods or services. Corporations could not be members -- they bring too
much restrictive baggage to the collaboration table to be of value to
the members.
So how might this work in practice? Before I provide an example, here's
a caveat: It would of course be naive of me to suggest that
old-fashioned
employer-employee relationships and hierarchies will magically melt
away in favour of the type of flexible, egalitarian, socially
responsible NCE that I outline above and in my earlier articles. It
would be equally foolhardy to
try to mandate certain standards of social organization as a condition
of
membership in the Federation -- the consequence of that would be to
provoke others to set up a less restrictive, and inevitably more
successful, Federation of their own. So let me coin a broader term than
NCE, called Non-Restrictive Business (NRB) to refer to any organization in any form that
does not contractually limit its members to working only with other
members of that same organization.
OK, now here's an example. ABC Bank decides it wants to provide weblogs
and other social software to its researcher-analysts, newsletter
publishers, and subject matter experts, to facilitate communication
with other employees and with customers and suppliers. The Bank decides
to outsource the project. It would go to the Federation database and do
one of the following:
- Place an RFP on the database -- That would allow members to
team up with other members who have the appropriate skill sets, and
pull together collective Proposals to send to the Bank; or
- Identify a Project Leader on the database -- The Project
Leader would then assemble the project team, probably also using the
Federation database, and present the Project Plan to the Bank; or
- Identify an NRB on the database -- The Bank would be able
to peruse the skills and expertise of each member of each NRB, and
identify one or more NRBs to bid on the project; or
- Assemble the project team themselves -- The Bank could
browse the skills and expertise of individual Federation members
regardless of what NRBs they belong to.
The Bank could of course also send RFPs to established corporations
that supply such services. But once the Federation grows to have
millions of members in thousands of NRB's, each with letters of
recommendation from previous happy customers, with one-stop shopping,
no 'limited' corporation will be able to compete on price or competency
with the vast market of expertise that the Federation offers. And if
you're a member of the Federation or the buyer for an NRB yourself, you
will almost inevitably buy from other members. Eventually, the
'limited' corporations will free their members to join the Federation,
or convert into NRBs themselves so that all their members can join.
The logical first members of the Federation will be independent
consultants, technologists, and other 'information professionals'. But
I can see other freelancers -- health care providers, financial
advisors, just about anyone in a service industry (which is most of us
these days) jumping on board. And once you start getting researchers,
distributors, job-shop manufacturers, and marketers, you start to have
the makings of the business World of Ends in the diagram above,
flexibly contracting with each other, and eliminating the big corporate
middlemen who currently skim most of the profits and make all the
decisions.
I'm currently putting together a Business Plan for the Federation and
both a Business Plan and a Charter for three sample NCEs. Since the
concepts are so radically new, these documents will need collaborative
input from interested readers and leading business innovators before we
can actually start building these bold new organizational forms. I'll
post the drafts here, of course, but I'm also looking for some business
and technology A-listers to spread the word and expose these ideas to a
larger and more critical audience. Stay tuned.
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