Monitoring ITC Emergent Intelligence in Economic Systems


Learning in Economic Ecologies

  1. Toward the end of the presentation
  2. More at the end of the presentation

The work of John Seeley-Brown should be described in detail here.

The Internet provides extraordinary business opportunity circumvents entrenched information gatekeepers, disperses power, flattens business heirarchies, and allows business units to "self organize". Let's look at some examples.

That businesses might operate efficiently without hierarchy might come as a surprise. In fact, you will probably be amazed at how successful as they are.

The first example is of the largest business organization in the world. It grew to this size in less than a quarter-century. If stock were traded in this company, it would more than double the market capitalization of any publicly traded company. The company is Visa International and its organization without hierarchies was conceived and promoted by Dee. Hock who was recently inducted into the Business Hall of Fame for conceiving and managing Visa International’s organizational structure.

The second example is Gore Associates which makes water resistant apparel and numerous other high-tech products. Gore Associates employees have no titles; there are no organization charts, and no formal hierarchy. The Company, a privately firm, has been profitable for 35 consecutive years and is a multi-billion dollar business. This extraordinary achievement is undoubtedly is a direct consequence of complete lack of organizational hierarchy. Individuals within the firm are free to "self organize" to respond to new opportunities.

Illinois Tool Works provides another example. This is a $6 billion firm composed of approximately 400 business units. On average, when the business unit revenues pass $50 million, the business unit is divided into two or more new business units. The goal is to keep the business units small enough to foster entrepreneurial management style. Having completely independent business units guarantees that hierarchy is a non-issue. Furthermore, entrepreneurial management style embodies much of what we mean by the phrase "self organizing”.

It also guarantees that competing for resources is not an issue. Hewlett-Packard put its inkjet printers and laser printers in separate divisions to prevent one from robbing their resources of the other. As a consequence, each division became the leading supplier in its product category.

Breaking businesses into smaller units is a relatively new thing made practical by progress in information processing and Internet technologies. Smaller units can function without the need to have every function under the same corporate roof by using Internet/extranet connectivity to be part of a larger network of suppliers and contractors.

Geary Hamel, considered by some to be one of the world's leading business strategist, in his book "Leading the Revolution", points out that management processes in most established companies must be deconstructed because they obstruct innovation and change.

What will replace management processes if they are "deconstructed"? The answer is "self organizing "business units that are practical because of the availability of information afforded by the Internet Revolution.

Increasingly intranets (internal Internets) are used to replace old-fashioned hierarchies by allowing every person to reach across the business organization. Anyone can have access to their bosses using email, and they can gain access to the same information through the Internet regardless of rank. They can understand where the business opportunities are and they can see what needs to be accomplished in order to bring in revenue. In other words, they can more effectively "self organize" themselves.