Done right, and by bringing together a small team of inspired professionals to knock out a top notch product, the nano corporation is the perfect “killer app.” When the project is over and the product goes live, the teams disperse to the four winds, ready to take on their next projects. Different teams, partners, and collaborators then market and sell the products. These teams themselves can be composed of nano corps, such as independent, small distributors or channels. (Nothing futuristic there tech firms have been selling via channels for decades already.) Nano teams self assemble, disassemble, and reassemble at will. They can’t afford to support a large bureaucracy, and the members certainly wouldn’t want to anyway. They don’t have time to stagnate, to be unproductive they’re making something. They are driven by passion, and then they’re done. Does this describe how your company operates? If not, are you at least a little nervous right now? Keep reading.GO NANO OR GO HOME
Ever stick around at a movie to watch the closing credits? Hundreds of team members come together for several months, or even years, to make the movies we watch. Th en the film is “in the can” and the people who made the film are done, too. While the director, cinematographer, and members of the cast may go on to work together several more times, the crew for this particular film disassembles just as fast as it formed; individuals and small teams go off to their next project. Hollywood has operated like this for a century now. Th e Hollywood model even when making blockbusters with budgets of $300 million is all about nano. How about our legacy enterprises? Can they do the same? Can they assemble large project teams from individuals and small groups, create something for the enterprise to sell, and then disassemble just as fast? Can each team member move nimbly to the next project, with a new creative force driven by different passions; different motivations?
Actually, we’re already well on our way there.
If you look at the history of the corporation, what you saw for much of the early years was the drive to employ every possible job function in house. But as early as the 1970s, this acquisitive urge began to diminish, and the fringe role of consultants became more commonplace. Look at how most companies operate today. Walk the halls of most workplaces, and it’s often hard to tell who is a full time employee and who’s a contractor, a consultant, an intern, or an outsourced service provider. Where once the megacorporation existed, today numerous companies come together to get work done. Is it so hard to extrapolate, to follow this trend to one possible conclusion, which is the existence of thousands of small companies where once there was one? Th ink about what that means what needs to happen, to make that happen. Th is workplace revolution would require a culture wide entrepreneurial mindset. A way of thinking we haven’t seen since William Carnegie was forced to walk away from the loom. A way of doing business not witnessed since the farmer walked off his land to find factory work in the city. Can we do it? Th at is a question only our most forward thinking educational reformers can answer. But we are optimistic!WE REPEAT: NOT ALL ROSES AND RAINBOWS
Th e process we’re describing here isn’t for everyone. It won’t work for every company. And some companies will maintain their own version of a competitive edge. After all, large organizations really aren’t trying to compete in the “entrepreneurial spirit” category. They aren’t trying to keep up with the power unleashed by digital media measurement
. Not exclusively, anyway. Let’s face it, big companies have two things that give them a leg up in the war for talent.
One is their deep pockets. If you are not the entrepreneurial type but you’ve got talent and you want a steady paycheck, a large company stands a good chance of crushing the most innovative nano corp when it comes to hiring you. It’s typical for employees at start ups to be paid wages that are much lower than market rates, with an upside sell that includes stock options (potentially worth millions if the company is one of those rare huge successes), a passionate work environment, and making a big contribution to a little team.
A lot of workers, especially once they have kids and a mortgage, would rather take higher pay with a seemingly more stable employer. Health benefits remain highly attractive to many. Th row in a 401(k) with matching funds plus vision and dental benefits, and, for many, a startup doesn’t stand a chance. Th e second consideration is pride of association. We humans are ruled by our own mental shortcuts, and one of those shortcuts our brain relies on a lot is status by association, also called social proof. In the eyes of many who are not cut out for the entrepreneurial life who don’t want to carve out their own future it’s better to be a janitor at a famous enterprise than a vice president of a company no one’s ever heard of. Many enterprises benefit from what Seth Godin calls the “Bat Boy Syndrome,” whereby even being a bat boy for a pennant winning team makes you a winner, too. In the war for talent, that is how Disney, Facebook, and many others win their fair share of battles.
After all, when we go to a party and get asked the “What do you do?” question, many of us would rather answer, “I work at Google” than “Bob’s Innovative Solutions, LLC.”
So if deep pockets and social proof continue to play in the enterprise’s favor, what’s going to spell its doom? What will cause the “death of large”? It could just be that the way large companies are managed in particular, the human side of that management is the source of the trouble.THE DEATH OF LARGE IS MORE THAN SPECULATION
Remember Bronson Taylor, from GHTV? He is one of three partners. They’re in business together; no one’s the commander. Th at is working just fine for them, but their company is minuscule. How about in an enterprise, when a company has 20,000 . . . 80,000 . . . 150,000 employees spanning a large country or even the entire globe? In that case, how many commanders do entry level employees have between themselves and the CEO?
And what about bureaucracy? When Bronson and his partners decide to make a move, they do it often literally in the moment. If one of them is working on his own project that day, or is traveling, the amount of time that decision might wait for him is overnight. That’s it. Not even twenty four hours. In our largest companies, by contrast, how many committees and task forces does a suggestion for change have to endure, how many months or even years have to pass before a good idea is implemented if it ever is? One aspect of life in a bureaucracy that seemingly never changes: Killing a project during its long gestation period is a lot easier than keeping it alive to reach fruition. If a company feels pressure to report strong quarterly earnings, the second thing to go (after employees) is any risky project with no “right now” ROI. Creative ideas outside the norm are often the first to go sometimes right before they reach maturity. Finally, when it comes to deep pockets and layers of bureaucracy, is “scale” still cheaper and more efficient than a cottage business, as it was in the twentieth century?
In mining iron and refining steel, yes, scale still wins. But how many organizations in our advanced economy still make simple raw materials? In the century of the creative knowledge worker, scale just doesn’t apply. And when creative knowledge work is the product, can the company stay competitive with a large bureaucracy to support? With all those executives’ salaries to maintain? It seems that management visionary author Gary Hamel might have been on to something when he dubbed our large companies’ current predicament “diseconomies” of scale. When nearly every worker is an educated adult fully capable of making sound decisions, and implementing and improving processes, the necessity of paying a huge staff of professional managers six or seven figures to keep workers in line is a sucker’s bet. In our social economy, the long term odds favor the house the small, nimble, nano house.HENCE, THE DEATH OF LARGE
Over the long haul, legacy enterprises that do not embrace social are in big trouble. They’re marching blithely off a cliff , completely unaware that they’re doing it. If nothing else, they will no longer be able to compete with other, similar organizations that leverage their deep pockets and prestige and at the same time, do unleash the power available to them in the Social Age while working through small, focused teams rather than a top heavy bureaucracy stuck in the 1950s. Want evidence?
▶ Think Montgomery Ward, JCPenney, and Sears vs. Amazon and its 17 million likes on Facebook.
▶ Consider the fine community work that Ford, and to a certain extent new kid Tesla, are doing compared to competitors General Motors and Chrysler.
▶ Ponder all the old school beverage companies slowly going away, while Red Bull rocks social media with 36 million likes on Facebook and 1.5 million followers on Twitter.
▶ Look at the work Th e New Yorker and Rolling Stone are doing on Twitter, and compare it to that of just about any dying magazine brand (and there are plenty to choose from).
▶ Spend a few moments looking at the engaging social media accounts of Virgin America, and compare them to the broadcasting and defensive stance of United or Delta.
▶ Compare the long term value of coffee brands like Starbucks and Dunkin’ Donuts to Folgers.
▶ Th ink about how Huffington Post’s 200,000 tweets have driven the younger demographic to a site operated by AOL, perhaps the Internet’s first original legacy corporation.
If we’re going to make a difference and save a few of these companies from self imposed extinction and in the process make the world of work a better experience for employees of all levels now’s the time. Th at list of enterprises getting social and going small the right way is absolutely a list of exceptions. For the other legacy firms, the hourglass is just about out of sand.
Meanwhile, the little, nimble guys, the nano corps, are popping up everywhere and thriving! We’ve given you only a few examples. Moreover, GHTV and YouTern are only niche organizations. Dennis Goldberg renting space and selling patents to Charles River Labs is merely one other, and the movie industry? Well, there’s nothing normal about Hollywood! Maybe these are all flukes. Maybe an entire economy could never function this way. Maybe. But do you want to be the guy who stubbornly stands at the loom while the world around you progresses? Do you want to be the leader who hangs on to the assembly line and mass production mentality long after that model was proven ineffective?
Didn’t William Carnegie and his peers see their way of life as secure; they were happy craftsmen proud of their work; they believed their continued success was inevitable. Today, the exact same thing can be said about the leaders of legacy enterprises who believe so strongly in their Industrial Age model and perhaps too strongly in the “too big to fail” mindset and make the choice not to adapt . . .
Until an irresistible market pressure changes everything in a given market in a virtual heartbeat. In business and in economics, nothing is inevitable. Absolutely nothing is unchanging. Social is every bit as powerful and unstoppable a disruptive force today as the assembly line was 100 years ago. At the start of this post, we laid before you seven factors that, together, spell certain doom for our largest companies as they exist today. So far, we’ve discussed the need for agility and the advantage of being nimble and nano. Now it’s time to really dive into the exciting, frothy waters of disruption. It’s time to discuss how “flat” works. Prepare for a whole new world and a whole new way to lead your team and company in the Social Age.