Thread by @meedabyte

The transformation of the firm when transaction cost plummets and potential grows at the edge (a thread)

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What is happening in the context of organizing?
1) transaction cost plummets thus elements of the workflow that can be leveraged from outside a firm become more and more compelling (the ratio between transaction cost and interaction value plummets)

2/18

2) As potential grows at the edge many small players become able to provide services vs one big player
3)Contracting cost declines and contracts become abstracted and standardized through technological means (e.g. smart contracts)

3/18

So what happens to the firm?
1) Owning and coordinating the interactions between parties is less attractive vs defining/owning the interfaces between elements and let evolution-competition do the rest

4/18

2)Micro-entrepreneurial units become more able to create a fully structured part of a business-process and complex user-scenario become easier to prototype in "connect & leverage" fashion (eg: plug APIs) - See @packyM's notboring.substack.com/p/apis-all-the…)

5/18

3) Each Micro-entrepreneurial unit becomes responsible to trigger its own ILC process (Innovate - Leverage - Componentize) and thus to create a "platform-ecosystem strategy" (see @swardley's

https://twitter.com/swardley/status/1092025762780270597?lang=en

and blog.gardeviance.org/2014/03/unders…
In this context ...

6/18

pervasive contracting such as with Haier's Ecosystem Micro-Community contracts become essential for a group of Micro-entrepreneurial units to coalesce to get to the size where the agglomerate can exert an ILC strategy. (see platformdesigntoolkit.com/eeeo-toolkit/)

7/18

Each Micro-entrepreneurial unit becomes core to its own #OODA loop versus what happens in industrial, siloed organizations where OODA loop bubbles up in terms of responsibility to the top of the firm (that is supposed to set the strategy).

8/18

This because when you embrace Micro-entrepreneurial units, and those units are deliberately framed as non-permanent (and they need to continuously justify their existence being "paid by their users" and not with budgets) all units are subject to red-queen effect/evolution.

9/18

Thus all Micro-entrepreneurial units need to develop their own fitness through OODA:

10/18

But, more in details how could the interplay between the big (organization) and the small (micro-entrepreneurial unit) work?

11/18

PURPOSE: despite purpose can be at the level of the organization it needs to be trickled down in "aims". The level of coherence between Purpose and Aims is crucial.

12/18

In some cases the big organization can be bold enough to "drop" purpose, see:

Zhang Ruimin and his "be like water, benefitting everything and competing with nothing"


13/18

@snowded "“if you have to write a purpose statement, then you’re doomed to purposelessness for the rest of your life”.(see: stories.platformdesigntoolkit.com/realizing-the-…)

14/18

@fred_laloux "Evolutionary purpose"

15/18

LANDSCAPE AND CLIMATE: mapping landscape becomes a pervasive capability to develop in the whole organization (at the team level). Like in Boundaryless' Platform Exploration Framework (Ecosystem Scanning, Platform Plays) platformdesigntoolkit.com/opportunity-ex…

16/18

DOCTRINE: becomes key as every small unit shares most of landscape and climate with not only who's inside the organization but also outside. The application of doctrine becomes the key differentiator in a world where competitive advantage is transient (red queen effect).

17/18

LEADERSHIP is expressed at 3 levels:
Architectural: defining structure & common language
Enabling: optimise what's optimisable
Enterprising: venture out with no connection with "core" (there's no core anymore), listen to users, enable "ecosystem as a future sensing engine"

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