How the Next Generation Enterprise is Different
From People Management to Harnessing the Global Pool for Talent (part 2 of 10)
The deep structures of the corporation are changing---the largest such change in a century. In his 1937 essay, "The Nature of the Firm," Ronald Coase, Nobel Prize-winning economist famously asked, "Why do firms exist?" He questioned why companies were necessary to direct the coordination of resources rather than individual actors cooperating through a free market. After all, in an efficient free market system there should not be any need for another coordinating body or institution like the company. His answer was that the use of market pricing mechanisms entails its own costs. The transaction costs of operating in a free market create opportunities for companies that offer refuge from these higher transaction costs, coordinating the factors of production without incurring the same level of cost.
Today, radical improvements in networking, storage and processing power are producing discontinuous transaction-cost changes. This process is in its early stages and we can expect significant changes in the architecture of corporations for the next decade or two.
Thanks to New Web, the old notion you have to attract, develop, and retain the best and brightest entirely inside your corporate boundaries is becoming null. With costs of collaboration falling precipitously, companies can increasingly source ideas, innovations, and uniquely qualified minds from a vast global pool of talent.
An nGen deploys talent on demand. To get the right talent, it engages and develops people in a wide variety of ways, from full-time employment to anonymous collaboration over the Web. Employees, especially younger ones, bring their experiences and expectations as consumers to the job. They expect not just friendly technology, but lots of information and lots of communication. They expect to collaborate, to co-create, to be treated individually every day. In the process, they may present an unprecedented and inexorable challenge to corporate culture and style.
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