In a HBR podcast that aired last week, Nilofer Merchant, author of 11 Rules for Creating Value in the Social Era, discusses the emergence of a new organizational model that threatens the power of 800-lb gorillas in business:
“The 800-lb gorilla in business has been aspiration, and it worked as a metaphor — it was the one who dominated over others, perhaps in the form of pricing power or market control, market monopoly, and it was, sort of like, ‘beat everyone else out’.
“And I think the Social era is going to look a lot more like 800 gazelles — meaning, many connected individuals running in the same direction provides a scale that once was limited to a few big enterprises. Now we can have many organizations being able to create scale without being big, per say.
“And what that gets us, why that’s important, is we’re going to be able to be fast and fluid and flexible not because we’re just going faster and working harder, but because inherently this [Social] model allows community to organize very fluidly and be able to create value together.”
Merchant discusses this point in more detail in a blog posting published earlier this month, “Traditional Strategy is Dead. Welcome to the #SocialEra.”
I encourage you listen to the podcast and read the blog posting to get the full picture of Ms. Merchant’s arguments, but here are three simple, yet important points that underpin her thinking (and mine too):
Social is not just about Media. Or just about Facebook, LinkedIn, and Twitter either, which is how many supply chain executives define social. The opportunity to create business value in new ways exists across all industries, and across all business processes — a point I made in my CSCMP presentation last year (see this slide).
Social is not just about Technology. You also have to change your business processes and organizational structures to create value. As I’ve written before, just because you deploy a new technology and tell people to use it doesn’t mean that they will or that you will realize any business benefits.
Social can redefine Organizational Structures. Now that we can connect, collaborate, and communicate with individuals (especially knowledge workers) in easier and more productive ways, you can create more fluid organizational structures that go beyond the four walls of your company. Put differently, the role and definition of “employee” is evolving.
It’s this last point that gets to the heart of the question in the title. Ms. Merchant argues that Social will allow companies to achieve scale and flexibility, and obtain market power, without necessarily becoming large enterprises in the traditional, 800-lb gorilla sense.
Of course, you can argue that outsourcing is a step in this direction. Many 3PLs, for example, position flexibility and agility as part of their value proposition to shippers. But the construct in a traditional outsourcing relationship is between two companies, between two traditional organizations. The Social era, as Merchant sees it, takes it a step further and deeper: it’s about organizing individuals — people — in dynamic and fluid ways, across traditional organizational boundaries, to create value.
In some ways, you can see this phenomena of “dynamic and fluid organization of people” already in action outside the corporate world (see Occupy Wall Street, the protests in the Middle East, and Change.org). And crowdsourcing is another example, which companies like P&G are using to extend the breadth and depth of their product development teams (see P&G’s Connect + Develop, IdeaConnection, and Quirky). If people across state lines and geographic regions can organize very quickly and apply their knowledge and skills to tackle an issue or problem they all care about, then why not apply the same model to organize people — supply chain talent — to fix, improve, and execute supply chain processes?
Okay, there are plenty of stones you can throw at this model and way of thinking, too many to discuss here. But here’s the main takeaway: Social is not just about media or technology; it’s also about how you find, connect, and leverage talent to create business value. Take a look at your org chart, with its rectangular boxes and rigid lines, and compare it to your network (social graph) of LinkedIn connections. The latter is the org chart of the future.