Is the large corporation a relic of the 20th Century, destined for extinction?
From the term popularized by science and, indeed, thrust into the mainstream by one line of Apple iPods, “nano” is a futuristic word for tiny. In science fiction, for instance, a “nano-bot” is a robot only several molecules large that can be ingested in large quantities by a patient, travel within the human body to where it is needed, and self-assemble from its component parts into a larger whole that cures what ails us. Then it can disassemble and move on to the next area and the next task, or leave the body entirely.
Sound crazy? Scientists have been working on nano technology for years now. It’s only a matter of time before nano-bots are a staple of mainstream life – not just in healthcare, but in all sorts of fields. The only limiting factor seems to be our imagination.
But what about business? What does itty-bitty technology have to do with how business is changing in this new, exhilarating century?
The late Nineteenth and entire Twentieth Centuries saw work go from small, localized employment to huge multinational organizations with tens of thousands – even hundreds of thousands – of workers. Quantity brought economies of scale that made large employers more competitive. But the pendulum swings. For one thing, large corporations are typically moribund with bureaucracy and the all-mighty “process” over innovation and agility. This environment quashes souls and inspires workers to focus on keeping their jobs rather than being fully engaged, creative, and thus most fruitful at work. Inefficiency is a beast of our own creation.
There is a better way, as millions of workers and countless companies are coming to realize. Expertise -in the form of single workers or small firms – can come together for projects, all prosper, then part ways for the next project, and the next. I call it the nano corporation: self-assembling enterprises composed of many small, semi-autonomous units. And while I was listening to the radio on my morning drive, I heard a perfect example of this emerging trend from my former home of Boston.
As you read or listen to this recent NPR story about a one-man pharmaceutical company, here are a few things to consider:
- Goldberg is an experienced pharmaceutical executive, not just some dude with a good idea. Expertise is more required than ever.
- Throughout our careers, we will work for the vestiges of large companies, we’ll work alone, and we’ll work for small and mid-sized companies – just like Mr. Goldberg.
- The price tag on developing a new drug: $6M versus $60-80M. You can’t fight that.
- What is not discussed in the story is that each player in the nano corp will by necessity charge more for their services than they would be paid as employees of a traditional enterprise. That is the only way the nano model can be sustainable. People need to be able to get by on their down time between projects.
- Also important to note: the lab facilities, in this case Charles River Laboratories, is prospering from this arrangement. Their facilities are essentially being rented to Mr. Goldberg’s firm. It’s a new source of revenue for this capital-intensive enterprise.
- When each drug becomes viable, Charles River or another large manufacturer will be required to produce it en mass.
This is a book unto itself; at the very least a chapter or section.
Click here for the story on NPR: One Man Does It Faster, Cheaper Than Big Pharma
This post first appeared on Ted’s previous blog.