What is the future of the corporate model in a knowledge society?
Networked workplaces are on the rise and are challenging the large corporation model. For instance, many big web companies have comparatively few staff. They leverage their networks.
But the corporation is not going to become suddenly extinct, as most of our laws and business practises favour the corporation over the individual. Witness who legally owns the intellectual property (IP) produced by the employee [answer: the corporation]. It’s only in some universities that the knowledge worker maintains these rights.
While salaried workers may not own their IP, they own more and more of the “know-how”. This intangible know-how is the real value of knowledge – being able to do something with it. We are seeing the rise of knowledge artisans who bring their tools; and leave with them. This is change from the bottom of the organizational pyramid.
Intellectual Property itself has minimal value and much IP isn’t worth the effort to protect it. Consider that companies like Facebook and Twitter have not built their businesses on patent applications. They’re too busy refining their business models, which are in perpetual Beta. Much business value is not in the idea or even the artifact that represents it, but in the speed and vigour of implementation.
The command and control corporate model may be forced to change when shareholders really understand that the valuation of their average corporation is getting to be more than 85% intangible assets. These intangibles are worthless without the know-how of knowledge workers. Therefore the actual value of the average corporation, without its people, is getting close to zero. So where would you put your money? In the corporation or in the people? For now, you have limited options, but who knows if this may change.
Look at Rachel Happe’s vision for the social organization, with some of these attributes:
- Employment as a mix of commitment/free-agency
- Managers focused on developing people or managing projects, not on pieces of turf
- Workers manage their own schedules
- Each worker has a unique “competency model” [farewell HR]
- Customers participate in projects
This sounds like a wirearchy or what I would describe as a structure that fosters multi-way flows of power based on trusted relationships facilitated by networked transparency. It reflects what chaordic structures have tried to do – balance chaos and order. Between chaos and order lies complexity, and that’s what simpler, but more nimble, organizational structures can better address.
In a networked world, the future of the corporation will be different, just as the future of many countries today looks suddenly different.
Thanks to Timbuk3 for the title inspiration.