Management thinking is moving towards an understanding of human action as a process of sense making. What an organization becomes emerges from the sense-making relationships of its members, rather than being determined by the choices of a few powerful individuals.
Management has historically been seen as a collection of tasks involving planning, organizing, controlling and incentivizing. A competent manager is believed to be able to analyze organizational and task requirements and also the emotionally loaded human motivations. Successful management has then been able to remove conflict and uncertainty and accurately predict and plan the future.
The new cryptocurrencies and post-blockchain smart contracts make it possible to leave behind the simplistic finance model of the industrial corporation.
What is still the mainstream model of the firm was born when the typical company owned and operated a manufacturing plant. Entrepreneurial investors put up the capital which was used to build the factory. The initial investors, the shareholders, were the only parties with significant assets tied up and at risk in the enterprise. This is the historic reason why shareholders are the “residual claimants” to the firm’s income. Residual claimant means that the shareholders get their compensation last, if something is left after creditors and employees are paid. Claims by creditors are fixed and employees typically have negotiated compensation principles in advance of doing something. Payments to creditors and employees are thus seen as independent of the performance of the company.
I joined NewCo a little under a year ago to help tell the story of capitalism at a crossroads. The role of business in society is being redefined by innovative, missi0n-driven companies that are measuring their success by more than just profit. We think this is the biggest shift in business and culture since the Industrial Revolution, and we connect and celebrate these purpose-led companies through both our media and our festivals across the world.
Next week, we’re hosting our largest event yet: the Bay Area Festival, from Feb 6th to 9th. I’m really exited to actually experience the story myself for the first time, and visit the companies on the front lines of this shift towards purpose-driven business. There couldn’t be a better moment: businesses are transforming faster than ever before, industries are being reshaped, and we’re all trying to stay ahead of the curve and chart a better course forward. Our festival offers the one-of-a-kind event that lets attendees personalize their experience and visit the companies they’re most inspired by. Here are companies on my list:
Monday, February 6 — Masterclasses at the St. Regis in San Francisco
The first month of 2017 is coming to a close, and we’ve been busy publishing stories that outline the trends are reshaping business, politics, and culture. As always, thank you for reading — we’ve broken well past 50,000 followers (WOW!!) and are coming off our biggest month ever in traffic. It seems you particularly liked Peter Lyden’s positive take on why Trump isn’t the beginning of an era, but rather, the end. Clearly, you’re an optimistic bunch. We are too.
The Dow hit 20,000 this week! Does anyone care? Our new president has taken credit for the “Trump bounce,” and indeed the latest market run-up started with the election results. Since its March 2009 bottom under 7000, the Dow index has roughly tripled.
At moments like this, it’s worth putting the champagne on hold to review the sober facts about the stock market (handily collected by Helaine Olen in Slate). The Dow Jones Industrial Average is fun to track but not a very good proxy for the overall economy’s health. Stock investments have been pumped up by years of zero interest rates that drove investors to seek higher returns in riskier markets. And whether the index stays aloft or returns to earth, you are unlikely to benefit from its ebullience, unless you’re already seriously rich.
NewCo is blowing out all the stops for our fifth annual Bay Area Festival! Not only are we running the event concurrent with our first executive forum, we have added a day of “masterclasses” where attendees can learn directly from the brightest business leaders in Silicon Valley. We also have three full days of sessions where attendees will get to go inside the most innovative companies in the Valley to learn how they are changing the world. For the first time ever, our event is showcasing companies from all over the Bay Area. Without further ado, here are my recommendations for sessions to check out:
Monday, February 6 — Masterclasses at the St. Regis in San Francisco
The firm of the future may be ten million people working together for ten minutes
Corporations are the dominant mechanism by which economic activity is organized. Whether there are opportunities for social innovation in the corporate world is hence a key question for the prosperity and well being in the emerging post-industrial society.
Over the past years, intelligent technologies, peer-to-peer cryptocurrencies and the Internet have laid the foundation for a very small size and a very low-cost enterprise with the potential for managing very large numbers of business relationships. The impact of these new actors is still hard to grasp because we are used to thinking about work from a different perspective.
David Friedberg is a serial entrepreneur and investor in Silicon Valley, having started a number of notable companies including The Climate Corporation, a climate-prediction startup, Eatsa, an automated quinoa-based fast food chain with no cashiers, and Metromile, a pay-per-mile auto insurance company.
An ex-Googler with a degree in astrophysics, Friedberg was involved in launching products like AdWords and Gmail. In 2006, he quit Google to co-found The Climate Corporation, which builds weather prediction tools for farmers. He sold the company to Monsanto for $1.1 billion in 2013.
Centralized systems are easier to control: Everyone knows that. They’re also less resistant to failure and less open to innovation. That’s why the internet’s original distributed design won out over the “walled gardens” of commercial online services 20 years ago. But the rise of the app store as the central mode of software distribution is turning back the clock, recentralizing the digital world around company-controlled chokepoints that also prove to be effective tools for government censorship (Farhad Manjoo in The New York Times).
All the dominant structures of our online existence today — from phones to social networks and cloud storage — centralize data and tools in ways that are, in Manjoo’s words, “uniquely vulnerable to the sanctions of despots and others who seek to control information.” Thus we have Apple’s removal of the New York Times app from its China app store at the behest of the Chinese government, Apple’s and Google’s removal of the LinkedIn app from their Russia stores, and similar incidents. Furthermore, what’s true for app stores is true for every kind of platform business that operates as a centralized middleman between users and providers of goods.