not your father’s enterprise
I attended a technology industry event hosted by IBM this week. One of the keynote speakers, an IBM employee, made an offhand remark that stuck in my head. He said, "Today’s IBM is not your father’s IBM, and I expect for many of you, your company is not your father’s". Honestly though, how many companies that exist today were even around when my father was my age? IBM happens to be one of a vanishingly small list of technology companies that have been more or less in their present form (if not in their present business) for more than 60 years. Most of IBM’s contemporaries were founded in the 1970s. How many of these will have earned the right in 30 years to make a statement like that of the IBM executive made? How many such companies exist today that will share a continuous historical timeline with their present selves in 60 years? I contend that we’ll be lucky to find enough of them to fit the fingers of one hand.
The enterprise of the future will be an Atomized Enterprise. A traditional enterprise was essentially a pool of intellectual capital (business model), social capital (employees) and monetary capital (investments) intended to advance the interests of its shareholders. It made sense to establish a traditional enterprise as a separate entity because the means of production were accessible only to a few, communication across vast geographies was limited and employing a captive set of workers lowered transaction costs for the enterprise. Some of these assumptions still apply, especially to successful traditional enterprises with existing operations and resource allocation models. Conditions are ripening, however, for Atomized Enterprises to take root in what we know today as the long tail of enterprises. We will touch on the definition of an Atomized Enterprise in this post and think through some of its implications in future posts.
An Atomized Enterprise is one where pools of intellectual capital, social capital and monetary capital are combined in efficient, loosely coupled ways to create stakeholder value. Perhaps the biggest contributor to the rise of the Atomized Enterprise is the rise and spread of the Internet as an efficient means of communication. After having percolated through developed and emerging markets for just over a decade, the Internet has come to serve as a neutral intermediary among global pools of labor and capital; in so doing, it upends a number of the assumptions underlying the establishment of traditional enterprises. As we will see in future posts, Atomized Enterprises represent a classic, Innovator’s Dilemma-style disruption in the very concept of an enterprise. As with disruptions in other markets, there is immense potential for the creation of wealth for those players who get ahead of the disruption and devise resource allocation models that recognize the disruption.
What are the forces facilitating the rise of the Atomized Enterprise? What will future models of wealth creation for stakeholders (as opposed to shareholders) look like? What opportunities will these create for interested parties? These questions are the beginnings of the kind of conversations I would like to facilitate in this space.
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[...] fix its chronic problems with service availability. This is huge! It ties in well with our earlier definition of the Atomized Enterprise: a pool of talent is being brought in to deliver value efficiently and [...]
[...] that we have some idea about what an Atomized Enterprise is, what does such an enterprise actually look like relative to traditional enterprises? Are there [...]
[...] software doesn’t serve Atomized Enterprises. We have seen in some of my earlier posts that Atomized Enterprises are beginning to emerge as a result of several economic, organizational and technological changes. [...]