The end of companies as we know them?

Some people claim that business and society has been undergoing a significant transformation for the last 10 years. Others claim that this is always ongoing, mostly in small steps which we adjust to without much fuzz. Regardless, it is relevant to ask ourselves how companies will operate in the future. Are we at the beginning of the end of companies as we know them?

In my mind, it is not really a question about companies as a legal entity, but rather one about the organisation. A company can be organised in many different ways, so the question becomes what a company will look like on the inside in the future. Until today, and probably for some time to come, the departmentalised structure is prevailing. Different competence areas support each other to generate the efficiency and effectiveness needed to stay competitive.

There are two movements that can challenge this existing paradigm of companies—people and technology. But what factors within these two areas are likely to drive a possible change? Let’s take a closer look.

People

They are sometimes called generation Z or post-millennials. Note that it is not about age but rather about behaviour. This is the generation that had access to the internet from early childhood. Within this group, you can find lots of sub-groups, e.g. gamers—which define the characteristics of this generation. Characteristics that will have an impact on organisations could be:

• Multitasking. They will not work from start to finish with only one task at the time. Instead, they are more likely to easily switch between tasks and projects at their own will.
• YouTube is their preferred search engine (i.e. they prefer audiovisual communication rather than text-based).
• They do not read and think. They look and feel.
• They need to be continuously acknowledged.
• Their digital identity is larger than their ‘real-life’ identity. Everything is on their smartphone.
• They have lost belief in formal authority. They choose who to trust.
• They do get engaged but in very specific questions at specific times.
• They are used to interact with people worldwide through online.
• They use their own community as an echo chamber for decisions.
• Their definitions of things, like media, differs from previous generations.

Photo by Gavin Whitner

This suggests that they have a great acceptance for working together in virtual networks with people from different backgrounds and from different cultures. Today’s processes in companies are not designed for their way of working. Traditional hierarchical management applied to this generation could be devastating.

Technology

It is called the Cloud. Back to the future. Big data centers serving users, remotely located. The real benefit will come with artificial intelligence and robots. No humans will be needed in the operation of a hyperscale datacenter. Infrastructure will be software defined. Functions will be dynamically created and launched. Some of the characteristics:

• It will be agile, meaning that it can automatically scale resources up and down based on usage. It will allocate resources as needed.
• It will be fast in response to new service requirements. The functions are pre-installed and can be activated upon request meaning that timing is less of an issue.
• It will be efficient in terms of self-healing which means that the service will be there when we want it to be there.

This suggests that there will be no need for internal IS/IT departments owning a lot of hardware and software which requires a lot of maintenance and upgrading. The ROI calculation is not too complex. Just pick a cloud service with a full-service offering and you can shut down your own support efforts. Focus on your business and not on the tools.

Now, what if we combine these two dimensions, people and technology? Generation Z suggests that existing organisations and processes will not work. Technology suggests there is an alternative. What if the company becomes a competence defined infrastructure in parallel with the software defined infrastructure that constitutes IS/IT? It will enable disconnecting departmental functions from each other. Organisational functions can then be dynamically and freely connected to each other outside limiting legal boundaries. Today’s inside becomes tomorrow’s outside.

If the main parameter, guiding new connections to be established, is ‘served value to an audience’, we have established a fast system with a clear business focus. A clear reason to exist. And, since generation Z is pro using consumption as a driver for influence we might actually find sound businesses that actively work for the greater good.

Wouldn’t that be nice?