| 4 May 2004 @ 14:43, by ming|
From Ming the Mechanic: Dave Pollard has a nice piece on The Future of Business.
Let's step back now from the perspective of the knowledge worker and look at how the business environment for corporations has changed in 2015. In the early 2000s, large corporations that were once hierarchical end-to-end business enterprises began shedding everything that was not deemed ‘core competency’, in some cases to the point where the only things left were business acumen, market knowledge, experience, decision-making ability, brand name, and aggregation skills. This 'hollowing out' allowed multinationals to achieve enormous leverage and margin. It also made them enormously vulnerable and potentially dispensable.
Various forward-looking management gurus, like Tom Peters have been talking about this kind of change in the business and job world for a while. Everything will become more loosely connected and changing faster. No lifetime position in a stable company. Everybody will need to be able to market themselves, and will be likely to work on a succession of projects in the form of virtual companies that come together ad hoc to deal with a certain opportunity and that might well disband right afterwards. The change goes all the way up and down. Everybody has to think like an entrepreneur, constantly learning and looking for new opportunities. Constantly working their network, keeping up their repuation.
As outsourcing accelerated, some small companies discovered how to exploit this very vulnerability. When, for example, they identified North American manufacturers outsourcing domestic production to third world plants in the interest of 'increasing productivity', they went directly to the third world manufacturers, offered them a bit more, and then went directly to the North American retailers, and offered to charge them less. The expensive outsourcers quickly found themselves unnecessary middlemen. Now in 2015, the result is what Doc Searls and Dave Weinberger, two Internet experts, have called a World of Ends -- which in its business application means a disintermediated world where specialized businesses contract directly with each other to bring the benefits of globalization and the free market to consumers. The large corporations, having shed everything they thought was non 'core competency', learned to their chagrin that in the connected, information economy, the value of their core competency was much less than the inflated value of their stock, and they have lost much of their market share to new federations of small entrepreneurial businesses.
- Your networks are critical: Your success will depend on who you know, but not necessarily who you know well. Because of a phenomenon known as 'the strength of weak links', your future employer, employees, customers and business partners are all likely to be two or three degrees of separation away from those you know personally. Who your associates know is probably more important, therefore, than who you know directly.
All of it is of course both scary and exciting. And there are other possibilities of course, but this is quite likely how the capitalistic society is evolving. So, unless something fundamental changes, we'll all have to pay attention. If you'll keep thinking like a good employee you'll be more likely to be expendable and unemployed. If you think like a business person, and you get together a package of goods that the world actually needs - it might all be great. You might have as much chance of succeeding as any multinational company.
- You need to know how to run a business, from start-up to dissolution. Not the sheltered academic skills of large corporate administration, but the down-and-dirty skills of entrepreneurship, where every decision is make-or-break. Your network can help here, too. You're probably three times as likely to be self-employed or unemployed in 2015, as you are to be an employee of someone else, so you'll need these skills.