Smart self organizing pull corporations

Writing in the latest issue of The McKinsey Quarterly, John Seely Brown and John Hagel III have crystallized their thoughts around an emerging business trend toward smarter organizations and self-evolving organizational structures.

Their article: From push to pull: The next frontier of innovation, shows how " smart" modular, decentralized systems that connect an array of suppliers and other external stakeholders are providing a competitive advantage and changing the face of the efficient corporation.

Problem:

Most companies now mobilize resources by deploying push systems, in the mistaken belief that they promote efficiency, writes Brown and Hagel.

Push systems-characterized by top-down, centralized, and rigid programs of previously specified tasks and behavior-hinder participation in the distributed networks that are now indispensable to competitive advantage.

Smart Solution

More versatile and far-reaching pull systems-characterized by modularly designed, decentralized platforms connecting a diverse array of participants-are now starting to emerge in a variety of arenas.

Example Product innovation.

The authors cite the example of Lilly's informal open-innovation system called InnoCentive

" In 2001, Lilly created a wholly owned subsidiary - InnoCentive - that has recruited a distributed network of more than 80,000 research participants (called "solvers"), in over 170 countries, to help its clients find solutions to difficult R&D challenges. InnoCentive has more than 30 such clients (called "seekers"), including Dow Chemical, P&G, and its own parent, Lilly. When seekers confront a particularly difficult research challenge, they post their requirements to InnoCentive's solver network and offer a bounty to anyone who finds a solution." (.....just like the DARPA Grand Challenge race, that took place last weekend -see: The future of Smart Cars )

They note that:

"the InnoCentive's success rate is roughly 50 percent - not bad for research problems that the seekers' internal R&D staffs couldn't handle. Most interesting of all, perhaps, are the signs that InnoCentive's solver network is beginning to self-organize, with diverse solvers coming together to address a specific seeker's needs. This is a classic pull system: when needs can't be easily determined in advance, companies can create platforms to mobilize distributed resources readily."

Example-flawed organizational design

In another story on the 21st century corporation in the same McKinsey journal, the author cites a similar example to show what happens when push clashes with pull

"Today's big companies do very little to enhance the productivity of their professionals.  In fact, their vertically oriented organizational structures, retrofitted with ad hoc and matrix overlays, nearly always make professional work more complex and inefficient.  These vertical structures - relics of the industrial age - are singularly ill suited to the professional work process.  Professionals cooperate horizontally with one another throughout a company, yet vertical structures force such men and women to search across poorly connected organizational silos to find knowledge and collaborators and to gain their cooperation once they have been found."

Impact

1. What will the competitive landscape look like in your business space when the ratio of competitors starts to shift from push to pull?
2. Can your organization morph from a classic push structure to a more intelligent self-organizing pull format ?
3. As pull systems reach center stage, executives will have to reassess almost all aspects of the corporation.
4. Is your organization using tools such as Assumption Testing and Viable Systems Modeling to help in this makeover and to create new "disruptive killer" business models?
5. This may be a difficult transition for many executives who were taught in the "old" business school that overall control is the number one principle behind the classic business structure.

ETA: Coming to your industry ...very soon

Walter Derzko

Expert, Consultant and Guest Speaker on emerging Smart Technologies, Strategic Planning, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

.....Strategy without action is a day-dream; action without strategy is a nightmare"

- old Japanese proverb

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