The Elastic Enterprise

I was recently connected to Haydn Shaughnessy, the Forbes columnist and E2.0 expert, who just wrote a book, called the Elastic Enterprise.

In it, he mentioned that one of the main transformations that the elastic enterprise brings is a new form of scale. As you know I’ve written about this topic of scale in the post called, “Why Porter’s Model No Longer Works“. He says that rapid scale at low risk and low cost, infused with participation from wholly new groups of economic actors that are now being called business ecosystems, allows different types of enterprises to flourish.

I asked him if he could give us an example of how a “traditional” enterprise might look to then become “elastic”. What are the ways to let go of the old to get to the new form of scale?

His answer:

I think you can see a number of traditional enterprises experimenting with this idea. Take a look at USAA’s Home Circle and Auto Circle services and you can see a tight-knit ecosystem of suppliers feeding data and capability into USAA’s offer. Look at Forbes and its new community of 800 writers. Or Expedia converting its affiliate network to a hyper-channel partner ecosystem. American Express too is now thinking about its members and merchants as a commerce ecosystems. So short answer is that MANY established companies are thinking about it.

And how so?

Letting go of the old means thinking of your company as a platform for other people’s activities.

Ask yourself, what groups do you naturally connect or could connect?

The current constraints on scale are capital investment and new hires, so what you want to be aiming for are strategies that do not revolve around these two resources.

Good food for thought on the topic of scale… His book is an interesting reading covering many global brands and how they are acting elastic.