The Web is changing how we live and how we create wealth

Acumentum’s catch cry was “Creating Better Ways of Working, Learning and Living” and now 10 years later the world’s web designers and entrepreneurs have changed how we live. eBay has given us an online garage sale, Facebook a much better way to share photos and organise parties, and no one would search for a new job or buy a car or house without spending hours and hours researching these most important decisions using the Web.

In short the Web has changed the way we make decisions and because of this it has changed the way our economy works. The way we co-ordinate, co-operate and collaborate has been radically changed because we can rapidly and globally share ideas to engage others. By engaging others with our ideas whilst building trust we more efficiently conduct economic activity so we create more value. Hence we create more wealth.

It has taken more than 40 years for the Web to achieve this impact on all our lives. My first experience of a global network was IBM Profs network in 1978. It was only 7 years earlier that the very first email was sent by computer engineer Ray Tomlinson in 1971. Since first using Profs I have seen 4 major evolutions which could be described as:

Web 0.0 linking the technologists from say 1969

Web 1.0 linking information pages from 1991

Web 2.0 linking people in social networks from 2002

Web 3.0 linking knowledge from around now

What we need to learn from these major phases of evolution is that it is the new forms of organisation that are important and never the technology itself. Without electricity we could not have computers but to see computers as an extension of electricity is pretty meaningless.

So by studying how organisations have changed in the past we can gain insight into how modern web-based ways of co-ordinating, co-operating and collaborating will change how we structure commercial activity and organisations in the future.

As film technology exploded after Warner funded the development of cinematic sound with the Jazz Singer in 1927 we soon had Gone With The Wind (1939) and The Third Man (1947). But it wasn’t just the cinematic experience that changed; the organisations making films also soon went through a revolution too. The monolithic studios of the 1930′s have now been replaced by new flexible forms of talent organisation and we have seen new ways of structuring film production companies and sharing risk.

It is now our challenge to see what forms of organisation and structure work best in the twenty-first century. What forms of organisations will encourage ideas? How can we structure our teams to best manage creative tension to generate the most valuable ideas? Who is creating the value and how should they be rewarded?

Connecting knowledge with people

Those that quickly learn to collaborate will create the most value. What the explosion of online services shows is that the only way to stay in front is to run fast. Past achievements and horded assets will not account for much. Look at how quickly Google has eclipsed Microsoft. Our past will only be valuable if we can use it to connect with people to generate new and important ideas that others value. The lone genius looks like a dying breed. People who can co-ordinate, co-operate and collaborate best have a much higher likelihood of creating the winning ideas and hence the most value.

There is no place to hide today. The world is now a village and you will be known for what you are and what you deliver. Tools to manage reputation will emerge. These tools will aggregate what you do with others and how often you work with them rather publishing what someone else has said about you.

This enormous connected village means there are people out there that know what you need to know to achieve what you what to achieve. The most successful people in the future will be those who are best connected to those people.

Now are you prepared to back yourself solo against the world or do you think you would rather call a few friends, friends who could be anyone of the 2 billion people connected to the internet today? Some of these two billion people can help you generate better ideas and workout better ways of executing to create the most value in the shortest period of time.

Specialising – providing enhanced skills, knowledge and expertise

But will 2 billion connected brains just swamp all of us mere mortals? What strategies do we need to deploy to survive and prosper?

Most people today use specialists for most services they need to live. At home we have outsourced painting, plumbing, lawn-mowing, garden design, food preparation and house work. At the office most small businesses have outsourced IT support, printing, human resource management, and recruitment just to cover a few services from a very large list. The very best firms identify what it is that they are exceptional at and focus on that to drive their business; all else they outsource.

Ever since Adam Smith described the need for increased specialisation in the division of labour in his book Wealth of Nations, businesses have been learning to focus on what they do best. “Stick to the knitting” is not a new catch cry. Today there is considerable evidence that increased specialisation results in increased GDP per capita.

The problem with increased specialisation is that our customers want whole solutions and the ease of buying them at the one shop. For larger organisations dealing with a myriad of smaller companies brings with it increased risk and higher transaction costs.

The automotive industry solved these problems by creating tier one, two and three suppliers, aggregating parts through each level until cars are produced by the global manufacturers. In this way a smaller business can design the very best seat covers and provide those to the supplier who makes the seats who provides the seat to supplier who assembles the car interior solution who provides all that to the global manufacturer. The auto industry invented “just-in-time” processes to make this new way of organising work possible.

Now that people everywhere use the Web to communicate and socialise it is becoming possible to invent “just-in-time” processes for every industry and service sector by knitting together different type of organisations with very different characteristics. Small, agile and flexible organisations will combine with others, both small and large, in an effort to produce the best results. Just as the Internet was designed to continue operating despite losing parts of the network, new forms of organisation will also be able to continue to operate at high levels of performance as the cells that they are made from rapidly change.

It is widely acknowledged that businesses have had to innovate or they have died what is now emerging is that companies need to collaborate or they will die.