Is it desirable to build a company utilizing the model of al-Qaeda? This is not the first time the question has been asked. There is at least one scholarly essay on the topic and an LA Times article that looks at how well al-Qaeda runs as an organization. But if we leave behind the reality of al-Qaeda and its connection to death and destruction, is the cellular model a route to corporate success in today’s business climate?
Many corporate theorists call for the death of the hierarchical structure. The structure of a new business can be web-like, with relations only extending in length as far as they need to. This new corporation can be one of individuals working together, but the individuals would not be expected to know or to contribute anything more than they are able.
What would end up happening would be the creation of a small market within the community of the “corporation,” with politics and skill increasing the number of tasks that one invites onto oneself. No one is more responsible than one wants to be.
I imagine this corporation would have a unifying mission, but the way in which the individuals would choose to accomplish this mission would be totally up to them.
Google seems to function in this way, at least to some degree. But I’m wondering if there is another way to do it. At Google, the two head dudes have the final say as to whether the different projects ever see the light of day. But what would happen if you got rid of these two guys?
Imagine Fluid Imagination as a corporation that had a mission of “helping artists collaborate.” And that would be the only dictum. Anyone who wanted to contribute to that mission would be able to find a home for their project on Fluid Imagination. Three people could work together on one idea, several others on another, one person could have still another idea, etc. These individuals could work on their particular ideas for Fluid Imagination, but they would not be limited by the company. They would also have the freedom to work on their own particular projects. The only responsibility they would have would be to the other people they are working on their particular project with. No boss would be asking them to do anything, because there would be no bosses. There would just be the people they were working with.
Responsibility at a corporation of this structure would be moral, not “incentive” based. It would simply be, “If you say you’re going to do something, then do it.” And that’s it. If you don’t want to work on a project, then you say no.
The question becomes one of pay. Anyone got any ideas on how a corporation of this structure would handle payroll? I think hourly pay might be the only fair way to take care of it, with everyone getting the same rate of pay, but there might be some ill-will when someone feels their individual work is “more important” than work being contributed by someone else on the project. And there’s always the possibility that the person who “came up with the idea” might feel like they deserve more than the people who came to the project later. Perhaps there would be a bonus kind of incentive for “creating” the idea, but that would privilege the “idea” over the “reality” of what the project becomes, so maybe that’s not fair either.
And so I ask again, how would you take care of paying people in such a corporate structure?
7 Comments
perhaps… - for a project… - make a sheet and list everything that is involved with making the project… - each action or nonaction is listed by a point system… - starting with the idea… - and sub-points incase it’s a joint effort or was improved after brainstorming… - maybe?
it all depends… - if the creators - inventors - and participators of the corporation go into it knowing that everyone is going to get the same cut whether they invent or design or help produce a certain project - then… - that’s that… - or - they can go into the corporation knowing that what they do is designated to a point system grid system of pay… - but… - the point system could be designed so it’s not an overly corporate pig type structure… - there can be incentives - but - incentives to strive for instead of capturing and keeping - king of the hill - kicking people off… - the hill is much too big for one king…
In the corporate world there is something called internal markets within companies. I think IBM does this and it works like a futures market inside a corporation with each “area or plant” bidding on projects.
A Person in this case could be on different projects and make money depending on the successful completion of the project.
Example if this “corporation” wanted to create a website/blog/whatever they would create the project then take bids from the different groups of people choosong the best one depending on the factors they have set. They could bid out each part of the creation of the site, or the whole thing.
Think of it kinda like making a movie. With a movie you have a collaboration of hundreds of different outside contractors all working together to make the movie. Actors, directors, the people who build the sets, the fluffers, makeup people, well you get the idea. After the movie is done they all split up and do other things.
Or something like that.
Although
“Corporations often require a single strategic vision that can only emanate from the top. Only centralized management can resolve conflicts, especially when an organization is downsizing and faces difficult choices.”
But if the organization only pays on a per-project basis, doesn’t that mean that there are no “employees” to lay off? Your movie-making analogy is apt here. People don’t get laid off from movies. They simply “don’t work” on the movie anymore :-)
On the internal markets thing: who comes up with the idea that people bid on?
Try this: Use the concept of Fluid Imagination as this corporation. Imagine, as I did above, that the mission of Fluid Imagination is to help artists collaborate. Draw me an illustration from there.
Well is helping artists collaborate what you “sell” or is the finished piece of art what you “sell”. How does Fluidimagination make money?
Tell me how it makes money and I suggest ways to pay the people.
The internal market is good if you know what you are going to sell. IBM bids out the making of computers to the different computer making plants that are under its umbrella. Wouldn;t really work in this case.
Greetings Programs,
In taking a brief break from studying for an Econ. final I ran across this interesting post.
Briefly, after gmc, lived in ME. for 7 years, then moved to Jackson Hole for 8, and have recently found myself back in school, getting my MBA in Real Estate development(New Urabnism) at U Wisc.Madison.
A company the likes of which you describe exists (or at least used to). Check out AES (Applied Energy Solutions). Founded by Dennis Bakke AES was known for having a drastically de-centralized business model and a global presence. The home office had little to do with daily operations at the individual facilities and their philosophies were humanistic (almost) to a fault. The company grew at double-digit rates and eventually went public. After enron, and the effects of significant political instability in South America (40% of gross revenues) the board called for Bakke’s (then CEO) resignation - he left stating that the board merely paid lip service to his philosophies and once the chips were down, his unorthodox methods were brought to a screeching halt. Bottom line: (excuse the pun) is that once a company goes public, it’s not up to company leadership anymore. While Bakke made it public that AES was not putting shareholders first, investors put up with him because he was making them money. Once they felt the his fiduciary(sp?) responsibility was not being taken seriously, he was out.
Check out “Hidden Value” by O’Reilly & Pfeffer, Harvard Business School Press 00′.
Cheers, & long live Bertha the 6-footer that once haunted the Halls of Moses 2nd and my dreams to this day.
Drew Hibbard
Hey Kyle. I like the website.. Some interesting posts in here. In addition to EAS Gore has a similar model… Gore-tex. They are called associates. There is a maximum number of associates that work in one office or department. This cuts down on the amount of bureaucracy and is founded on relationship thresholds. Being that after to many relationships by one person needs to be accounted for a breakdown of relationship maintenance ensues and the model stops working.
The last commenter was spot on. For this to work the company needs to stay private. Once the company goes Public then the business needs to report to the shareholders and the managers have a fiduciary responsibility to the shareholders. Private business is the only way to get it done. At the end of the day it can never be cell based, because someone needs to pay for it. If they are putting up a certain amount of risk then they have to be re numerated. Otherwise why take the risk?
Unless you can completely get a company up and running like in a wiki fashion keep it private and then sell off the ownership to all of the associates in the structure and make an ESOP. Where everyone is an equal owner and equal risk taker it can’t happen. That is feasible, but getting there is the tough part.