This is why your company won’t be around for much longer
A Fresh Look at an Old Idea
When Ford’s first model T rolled off the production line, it was hailed as a manufacturing marvel. Using the “progressive assembly line” approach, Ford had revolutionized the production process by cutting the average production time by 8x from 12.5 hours to just over 1.5 hours. That was in 1908. Yet, in over a hundred years, our approach to manufacturing has not changed much since then.
Fast forward to 2016, Elon Musk, the CEO of Tesla, has challenged how we manufacture by building the world’s largest lithium battery plant in the world – the “Gigafactory”. As Elon Musk describes it, the Gigafactory is essentially “a machine that makes machines…looking more like an advanced CPU or a multi-layer integrated circuit.” Its production capability will be nearly 10 times greater than average production, maximizing output velocity and optimizing density utility.
In doing so, Musk inadvertently showed the world that the way companies operate is a 20th century concept: old-fashioned, inefficient, and outdated.
Size doesn’t matter
But reimagining how companies operate doesn’t mean bigger is always better. On the contrary, there are micropreneurs like Uber drivers and digital nomads, freelancers whom as long as they have a computer and an internet connection, can offer their individual services to the world. These pioneers have already transformed the taxi, marketing, consulting, and IT industries. So what does Elon Musk’s Gigafactory have in common with, say, a digital nomad? They are decentralized.
Birds and the bees – a new look
Imagine a bee hive or a flock of birds. Have you ever wondered how a duck stays in perfect distance within the rest of the flock while flying in perfect unison? How is a hive made by thousands of bees perfectly constructed? This is decentralization. Decentralization refers to many complex processes working in tandem and independently from each other, but within an ecosystem, toward a common outcome. The key benefit is that if one of those independent parts stop working, it does not disturb the rest of the ecosystem.
We have already seen a gradual movement towards a decentralized economy via outsourcing jobs. But outsourcing is just the beginning. The cloud, for example, enables both freelancers and startups to work in a decentralized ecosystem (think Google Android, Chrome, and Apps). Which is why they are typically extremely lean, product specialists, and can outsource non-critical business activities to other specialists all over the world.
Furthermore, with the advent of cloud computing, machine learning, artificial intelligence, and robotics, routine tasks are becoming more and more automated, increasing productivity and output like Tesla’s Gigafactory, creating a richer decentralized environment for businesses. A potential negative consequence of decentralization is that it puts some jobs at risk. Even what we assumed to be “safe jobs” will also be up for a major upgrade soon, especially in the healthcare and legal profession.
The Next 100 years
Like the Ford model T, we are now experiencing another revolution. Largely a 20th century phenomenon, companies as we know them today will become obsolete. However, make no mistake, decentralization does not just represent efficiency or productivity gains, but more importantly, will significantly impact customer experience.
A truly decentralized company will deliver continuous value to the customer 100% of the time. A company that fails to adopt this standard will fall behind, falling short of customer expectations and forever lost in the annals of companies that failed to transform. In the 21st century, a modern company is a decentralized company.