Is the myth of the “critical size” close to its end ? The concept of enterprise always comes with the concept of “growth”. Growth of the turnover, but also growth of its size. Today’s big companies count tens or hundreds thousand employees. But, at a time when performance is not only about the net force obtained by adding up hands but about the ability to make brains interact together, does critical size become a weakness ?
Today, some voices are rising to say :
- current efficiency issues are caused by inappropriate size. That’s because enterprises are not as good as making people interact as they were at adding up hands 30 years ago, that they were forced to find on financial markets the growth they could not get at the operational level.
- once companies have reached a certain size, their impact on economy can be dramatic and their failure could cause a systemic threat to the whole system.
In short, we’re shiftting from a context where size was reassuring to a context when it may mean incontrolability and risk.
Can we think that a constellation of partners would be more efficient that the current mastodonts ? That businesses should lose weight and organize a their value chain with external partners ? An extreme application of value chain 2.0 ? Anyway, we still don’t know how Coase’s theorem will apply to our new born knowledge economy. No one knows what future will look like but it’s not irrelevant to think that value chain socialization will bring a new form of enterprise, more designed to hunt in packs than for solitary tracking because of their lack of agility. Or, maybe, some cleaver CEOs will manage to make make elephants dance..
You can find the "original" french version of this blog here
