The Year of Scale
It's a scaled world. But traditional businesses aren't built to scale. That's going to present managers with problems -- or what we prefer to call "challenges" -- this coming year. For many managers who've managed to stay safe within the bounded smallness of traditional business, 2008 will be the year of scale.
The world has been scaling radically since the Web first came on the scene. But the success of large, open-ended collaborations -- a robust operating system, a comprehensive encyclopedia, some "crowd-sourced" investigative journalism projects -- now is not only undeniable, but is beginning to shape expectations. This year, managers are going to have to pay attention.
The scaling is due to the basic elements in the Web equation: Lots of people, bazillions of pieces of information, and gigabazillions of links among them all. As more of the market, more of the supply chain, and more of the employees spend more of their time online, the scaled world of the Web begins to set the agenda for the little ol' real world.
Here’s where the scaling effects will be felt most in 2008:
Markets. More and more managers are going to have to figure out how to deal with scaled markets in 2008. This was actually the first scaled phenomenon that businesses noticed, but it still remains a challenge. Markets have scaled because it's so easy to reach so many people. Of course, if you try to reach everyone who can be reached simply because they can be reached, you're a low-down dirty spammer. Nevertheless, the size of your legitimate market has gone way up. And because this is a networked market -- markets are, after all, conversations -- the effects of scale go way beyond quantity. A networked market knows more than the company does about its own products. A networked market expects the same sort of treatment from the company that it gets from the other customers with whom it’s engaged. That requires different behavior by managers when addressing the market. The old days of attempting to control markets by selectively releasing information are rapidly coming to a close. Crowds create sunlight. But a scaled market is also a market with a long tail, with implications for product design and services delivery.
Innovation. In a scaled world, most innovation is going to happen outside of the purview of any one company. Relying on only the people in your team to come up with all the best ideas is a formula for disaster. Losing one's pride and being willing to involve as many people as possible in the innovation process is not a formula for success but it greatly increases your odds.
Employee attitudes and expectations. Management by control just can't work in a scaled world. In fact, it was only by removing control that the online world was able to scale. Participants -- and employees -- are learning that collaboration works, but only if certain conditions are met: People need equal opportunity, a meritocracy needs to be able to emerge, roles should shape themselves to the individual's abilities and social relations, and there has to be complete transparency about the process and the progress. In a sense, management comes after the fact in the scaled world, helping out where needed, but letting much of the organization emerge from the complex relationships among the co-workers.
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Hi David, all,
this is all through indeed. Yet, at the other end of the spectrum, managers are pulled into deep understanding of the (business) processes they run and their 'compliance' to detailed and stringent, externally- imposed regulations which evolve to true 'bastions'.
This is one example where 'scaling' on the one hand and 'controls' on the other seem to be going in opposite directions.
The idea I want to infuse into the discussion here, is that, as in nature, any action (scaling) is counterbalanced by a matching reaction which I have yet to come to terms with on what it will be. Any ideas ?
My Best Wishes for 2008,
Hans
- Posted by Hans Van Mingroot
December 27, 2007 11:12 AM
Quite impressed with the insight of David Weinberger and the feedback from Hans Van Mingroot. I would like to dovetail Hans's notion and take it a bit further, namely, re the "counterbalance"...
With Al Gore having won a Nobel prize and the United Nations finally confirming an ascalating ratio of "decapping" of both our poles, I wonder what will it take for serious messages NOT to fall on deaf ears of policy-makers in both the public and the private sectors, but more so the former.
A "scaled" world is on way to dictate the real world in mainstream mundane matters. But, what will it take to mobilize the "gigabazillions" of the Internet's global populace to start allowing a decent portion of their/our online attention to topics such as the dire consequences of global warming. And, hopefully, that positive actions can begin to take up momentum before it is all lost?
Hans, you are curious about the possible "counterbalance" and I am basically not a nay sayer who subscribes to doomsday notions. But the way the world has chosen to ignore an increasingly deteriorating planet earth, I fear that an ozone layer depleated beyond repair could well be an answer to your query. The scaled world keeps on scaling, and the real world collapses a bit in proportion...
This could be the beginning of some sleepless nights for some. But isn't insomnia one of the prices we pay for a scaled world where "always on" is both a trade mark and an accomplice to information anxiety?
Welcome to the club!
- Posted by Geoffrey Malcolm Chang
December 28, 2007 3:21 AM
Hans, we do seem to be moving in two directions at once ... which is more or less the definition of a tectonic change, or perhaps of the rending of garments. On the one hand, we've learned that in many cases, control kills scale. On the other, in many areas -- SOX anyone? -- we are instituting controls far beyond what we could imagine for the real world. It's not at all clear to me how this historic contradiction is going to be resolved, although I know how I'd like it to come out.
Geoffrey, here's hoping that 2008 is a year of extremely rapid evolution for our species.
- Posted by David Weinberger
December 28, 2007 4:11 PM
Hi David,
Great observations, as always, on what the Web/Tech community has created and its implications, but I'd like to take a very contrarian view. I think we've yet to see the "Empire Strike Back" as it were...In order to meet these scales companies do need to innovate, yet sadly more and more of them will (like the RIAA/MPAA have) turn to litigation to stem the tide of innovation that is outside of their control.
Sadly, at least here in the US, they have allies everywhere in government who wish to aid and abet them in attempting to shove the technological/innovation toothpaste back into tube through legislation designed to penalize innovation (but of course they'll do it with cutesy acronyms that cloak their actual intent/effect...). In the end. of course, the age of large market dominating businesses will come to a close simply because the scale any given world-wide marketplace is too large for any one company (or even a keiretsu) to be able to satisfied with home-grown innovations of any scale.
The future will eventually be dominated by more specialized and by definition smaller businesses that thrive on mutual collaborative innovations, rather than the "co-op-etition" that exists now..
- Posted by David HM Spector
January 1, 2008 3:49 PM
David,
The Year of Scale included religion - the Wikiklesia ("fast community") Project gathered forty authors to explore the impact of technology, and specifically the Internet, on religion and spirituality. A five-hundred page anthology was born ==> from concept to publication in eight weeks. Just won a SNCR Award.
The antithesis of, as you say "management by control," the Wikiklesia Press is an experiment in organizational effectiveness with minimal structure (Hans: the only counterbalance here is prudent editing).
Wikiklesia may be the world’s first self-perpetuating nomadic DBL business model: raising money for charities - giving voice to emerging writers and artists - generating a continuous stream of new anthologies covering all manner of relevant topics. Nobody remains in control. There is no board of directors. The franchise changes hands as quickly as new projects are created.
Self-organizing / emergent book publishing IS possible. Literary quality CAN be maintained in a distributed publishing paradigm. "Crowd-sourced" - indeed!
- Posted by John La Grou
January 1, 2008 5:26 PM