PROVEN STRATEGIC NAVIGATION

With IBM’s exit from silicon chip manufacturing (an industry it largely created) just announced and Hewlett-Packard and EBay/PayPal both splitting in two, you’d be right to wonder if the days of big technology companies are numbered. Microsoft is essentially a two headed beast, hardware and software, with 128,000 employees across the world, acting out countless strategies. How can organizations working on a vast array of products remain nimble in the fast changing technological world of 2014 and beyond?

In my previous article, “30 years of creating businesses”, I looked back at the dismantling of Thorn EMI and noted that:

“Keeping the best technical and entrepreneurial people inside the core is never going to be possible or desirable. The best should, and will want to, run their own business, and in encouraging them to do so, the central business becomes difficult to sustain over the long term.”

It is natural that large companies will seek to split to maintain strategic focus, to concentrate innovation and realize shareholder value from individual businesses. However, this is really a failure of management to not see this in advance. The complexity of large organizations becomes their very reason to exist. Leadership cannot know or understand everything going on in an organization of tens of thousands of employees and multiple business units. These are complex webs, built and managed by a spider. Get rid of the spider and the web has no purpose and quickly falls apart. A centralized organization has a clear leader who’s in charge. Get rid of the leader and you paralyse the organization.

The answer lies in the development of starfish organizations.

“A decentralized organization is a different animal – it’s actually a starfish. At first glance, a starfish is similar to a spider in appearance. But a starfish is decentralized. The starfish doesn’t have a head. The major organs are replicated throughout each and every arm. In reality, a starfish is a neural network – basically a network of cells. Instead of having a head, like a spider, the starfish functions as a decentralized network.” *

Starfish organizations have no leader. Generally this would be considered a recipe for chaos. The Internet has enabled the rise of seemingly under resourced entrepreneurs to attack incumbents, disrupting long-standing business models and creating new industries.

Organisations need to build, grow, iterate and re-invent themselves frequently. Being small provides a fundamental economic advantage. As diseconomies of scale increase, the cost of entering a new market dramatically decreases. Community-based systems, where each new member adds value to the larger network, allow and value creativity. Without the need to justify one’s position in the community, the willingness to contribute and share becomes normal. Without a single leader, it becomes the ideology of the community that drives and informs the network.

That’s what we are building at Indycube and Indycube Ventures - the decentralized, ever growing, self-regenerating starfish organization.

* "The Starfish and the Spider" Ori Brafman and Rod A. Beckstrom, 2006, Decentralized Revolution, LLC