Social platforms for work
February 6, 2011
Before the industrial era, the mainstream economic activity was harvesting resources and trading them. In order to sell fish you needed to have access to the waters where the fish were, and you needed to have the right harvesting tools.
The industrial economy was centered on a different logic than the harvest and trade mindset, although the mining industry still today follows this logic. The new principle was to transform the raw materials into more valuable products. The success factors were now different. Raw material access was not the differentiator. In the new transformative economy, one could convert resources into products in places independent from where the raw materials or energy could be found.
Securing access to production knowledge instead of access to raw materials became the key success factor. As it was important to know, information became the differentiator. The industrial economy was based on economies of scale, standardization and specialization. The industrial logic was most vividly captured in the idea of the value chain. Value creating activities were sequential, unidirectional and linear. In the model, value is not really created but added step by step. To produce value, one receives something from one’s supplier, adds value to it and then passes it on. It is almost impossible to consider a supplier as a customer or a customer as a supplier.
But the relationships between firms, suppliers and customers are changing. The relationships are not purely transactional any more. The industrial relationship was based on the idea that the supplier did something for the customer that relieved the customer for doing that herself. Today leading firms are moving from the relieving logic to an enabling logic. Here the supplier does something together with the customer that enables the customer do things that would not be possible without the relationship.
The customers are not passive receivers and consumers of value but active contributors helping the providers to help them. Without the contribution of the customer, the value of the offering could not exist. Firm-customer relationships are not one-way but responsive interactions in which the parties “help each other to help each other”. Value creation is parallel and necessarily collaborative.
Division of work is now very different from the sequential, industrial value chain. Actors come together to co-create in a parallel, creative manner. Different actors participate differently in different times leading to each value creating situation being somewhat different and unknowable in advance. Thus it is not possible to take any organizational form, process or skill set as pre-given. Organizing and learning have to be ongoing, context specific, processes in time.
The move from the one-way and transactional business logics to interactive and relational logics changes the concept of management. Organizational change or strategic direction are neither caused by chance nor the choices of managers, but by the very nature of interaction, relationships and collaboration between people in the value network.
It is time to move away from thinking about an organization only as a system of predictive processes. Participation in complex, ongoing, responsive interaction is the key differentiator and success factor today.
It is about access to people and confluence this time.