Why We Need Big Organizations

Big institutions will become more relevant than ever—once they focus not just on efficiency but on providing platforms for individuals to systematically experiment, learn, and innovate

By John Hagel and John Seely Brown and Lang Davison

Posted on The Big Shift: August 11, 2009 8:29 AM

"Bye, bye, organization guy." Those words start the first chapter in the estimable Daniel Pink's Free Agent Nation, published in 2007. In that book, Pink observed how increasing numbers of people in the US are choosing to work as independent contractors, temps, and on a project-to-project basis.

Workers were leaving big corporations, Pink said, to get away from "unfulfilling jobs, dysfunctional workplaces, and dead-end careers." As readers of our blog will recognize, we see this dysfunction as the inevitable result of the industrial-era model in which most of today's big companies remain stuck.

In the industrial-era model, companies focus on efficiency above all else—on getting things done at the lowest cost possible. In the name of efficiency they boil their business operations into routinized practices that suppress the creative instincts of their workers, who become standardized parts of a predictable machine. They not only suppress the creative instincts of their workers, they ultimately suppress the individuals themselves. The push-driven programs of these institutions require standardization and predictability. But individuals, especially passionate ones, are ultimately unique and unpredictable.

Small wonder our 2009 Shift Index (PDF) found that only about 20 percent of today's workers are "passionate" about their jobs—defined as loving what they do and working for more than just a paycheck. The Index also found that the most passionate workers were least likely to work for a big corporation.

Which raises a disquieting thought: will big corporations soon be filled only with people too timid to work on their own—the bureaucrats, the clock-watchers, and the resolutely non-talented? Will corporations slowly crumble under their own weight as inertia overwhelms their ability to respond to external events, and their talented people flee to become independent agents?

On the contrary, we believe big institutions will become more relevant than ever—once they focus not just on efficiency but on providing platforms for individuals to systematically experiment, learn, and innovate. As scalable learning replaces scalable efficiency big institutions will become more appealing to talented individuals. In fact, we believe they will become an irresistible magnet for passionate people seeking to amplify their individual efforts to develop faster.

We can think of at least two big reasons why this will occur. First, companies will wake up to the fact that knowledge workers—who exist at every level of the firm—are the ones who monetize intangible assets. Companies that don't nurture them will lose the very workers most responsible for creating profits. That compels big institutions to re-conceive their operations, organization, and strategy through the talent lens, especially as competitive pressures continue to intensify and performance deteriorates—long-term trends documented in our recently released Shift Index.

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