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January 4, 2006

Building emergent business models

(Posted by francois to: Strategy | book pointers | human resources | marketing )

chaordic.bmpAs I am working through my (huge) pile of books to read I hit another good one last night. It is "The birth of the Chaordic Age" by Dee Hock. Not exactly a new one, but I never claimed this site to be a news site or a recent book review site...

As many of you know, Dee Hock was the founder of VISA - one of the largest companies in the world. The interesting part about VISA is that it is one of the few large-scale commercial entities where the organizational infrastructure is not based on a command and control hierarchy, but rather on a true emergent self-organizing infrastructure. When Hock realized that none of the traditional company models could handle such a massively complex and distributed business model he focused instead on building a DNA for the new company, based on purpose and principles, rather than building a command and control infrastructure with all of its associated rules and regulations. The results - a huge company that emerged from chaos in less than 2 decades to become one of the most successful self-organizing companies in the world.

It is interesting to see what questions drove him throughout his career and ultimately led to the creation of VISA:

It's also interesting to read him say that: "...the need to harbor the Four Beasts that inevitably devour their keeper, Ego, Envy, Avarice and Ambition, and of a great bargain, trading Ego for humility, Envy for equanimity, Avarice for time, and Ambition for liberty..."

Maybe that is the way to ensure that marketing is not just another department (or worse - a set of departments) in a company - but rather a way of doing business, a way to behave in the marketplace. Instead of creating organizational structures with hierarchies, goals, rules and regulations we could focus instead on developing marketing DNA that can spread throughout the whole organization and become part of the company's fabric. On a certain level, Ritz was able to do that with their "every employee can spend up to $2,000 to fix any customer problem" principle. That's not a rule which gets enforced, and it's not a goal that gets measured (other than maybe to track potential abuse) - it's really a "behavioral" DNA strand that gets injected throughout the company. We could expand on that and come up with "listening" DNA strands, "innovation" DNA strands, or "branding" DNA strands.

Heck - why stop with marketing? Why not "financial" DNA strands, or a "governance" DNA strands?

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Posted by francois at January 4, 2006 7:21 AM | Bookmark This

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