In the past 100 years, we needed institutions to create scale.
Firms provided us with a more efficient way to create value by lowering collaboration costs and increasing the access to information. Centralized firms enabled what individuals could not do on their own. One side effect, though, was that the customer became “out there”. Also, centralized democratic government models provided a way to streamline representative decisions because the cost of engaging many people on a regular basis would be too high. (And democracy beat autocracy.) The voters at least had a chance to decide once every x years who would represent them. Lobbyists, like the AARP, started to play a bigger and bigger role to influence policy on behalf of voters because “representation” didn’t seem to be working well.
With the web, as we know, we have the ability to reconstitute how value is created.
I think that’s an interesting word. Reconstitute. It implies that we can dis-aggregate the components, and remix them as needed. Like having lego blocks that can be formed and reformed into the functional construct that best works. Each of the components matters. And so does the formation of how they come together.
What once only centralized firms offered, decentralized organizations can also achieve. Using a corporate example, it is what Microsoft (the centralized organization) does but also what the Open Source movement (decentralized, collaborative work) accomplishes. One could argue that Open Source out performs equally well as Microsoft. Different, surely. But centralized doesn’t naturally “win” as the only construct of scale. Where once we largely only had efficiency through a centralized organization, we now have more variability on which organizational model works. Where once we couldn’t possibly mobilize/organize more than election cycles, now we can weigh in on a policy by policy basis. And it is quite possible today for citizens to mobilize their opinions and understanding to influence policy, as the SOPA movement showed.
I wonder what we then think of as “big” or “scaled”. Are Wikipedia or Instagram small because their organizations are small? Or are they huge because they have so many contributors and co-creators in how they create value? Or referencing back to my Singularity example, is singularity “scaled” because it can mobilize to deliver 300 hours or instruction, or “small” because of their 7 full time staff?
The question seems to me that once scale used to also mean big. And the social era, with all of its technologies as well as new cultural norms are redefining or reconstituting what scale is. I’m starting to ask myself what is it defines / enables / illuminates scale. This video, in particular, gave me some things to chew on. In it, Don Tapscott, Clay Shirky, and others provide commentary on what they see happening around the world that allows power to shift from centralized institutions to “us”. There’s a host of examples from Couch Surfing and other loosely-formed organizations. It’s rather long, but quite worth the time.
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So what do you think? What defines scale?
Thanks for this instigation Nilofer!
I have an aversion to the word scale, but that may be limited to the traditional push of funding to projects that “scale” whether those are social entrepreneurial endeavors or straight up business endeavors. I think it obscures a lot of valuable business in our economy. Like a local family restaurant. Maybe it is better not to scale it? Maybe it fits the way it is.
I have been thinking in terms of impact and reach instead of organizational size, and I find that more exciting. In the world of social entrepreneurship there is a lot more interest in open franchising. A local entrepreneur starts something that works – it makes impact and earns revenue. But they might feel devoted to their location. It can be that their work scales through “adaptive blueprinting” the endeavor elsewhere with new “founders” replicating it (in culturally sensitive ways). The work “scales” but the organization might not. This can be especially important in context where trust is crucial, and thus a local organization may be better than a global one. (info on adaptive blueprints here: http://www.ned.com/group/ab/ws/index/)
In network terms, it can be interesting to look at reach. Rather than who is inside the organization, who is touched, influenced, or influencing the organization? That map of reach feels much more valuable to me than organizational size. Centrality in a larger ecosystem would be a good indicator of how crucial an organization is to the health of the ecosystem.