Future Inc.: Where dreams find expressions

In his book Pravir Malik, among other things, takes a look at how digital economy is evolving

Book Extract: India's Contribution to Management:

"The Digital Economy is an environment characterized by immediacy, globalization, digitization, virtualization, internetworking, disaggregation and convergence. Yet today’s organizations are inherently structured to almost oppose these characteristics. Instead of immediacy, organizations usually have bureaucratic policies or at best time-bound yet inflexible processes through which communication, transaction, and delivery take place. These internal processes are typically the build-up of years of habit and of an outdated view of reality. Whereas the characteristic of digitization demands a commonly agreed upon and functional basis, in organizations there tend to be many locally created procedures and protocols by which communication is impeded instead of enhanced. Rarely are standards the same across organizations; as a result, a document or procedure, or even a bill of receipt may have to be translated several times as it works its way through an organization. Globalization implies a multi-faceted effectivity in will, to be present in several diverse markets simultaneously – yet organizations are typically structured based on a single concept of customer or a single concept of market. Internal processes are usually designed based on that single concept and propagate backwards from point of customer contact to point of raw material purchase to effect and influence all areas of the organization. Convergence implies the coming together of various distinct industries to create a possibly new product or service in the marketplace. For example, real-time manipulation of one’s personal finances may require a customized hardware device with customized software running on it, having access to a public or private telecommunications network, and interfacing with the user’s bank databases. Therefore, Hardware, Software, Telecommunications and Banking Industries will have to converge to create this service. But this kind of out-of-box thinking requires a completely flexible organization that dynamically reconfigures its own internal processes based on what the opportunities in the market are. Few, if any, organizations have this capability. Disaggregation implies an objective reconfiguring of the organization, so that those parts of it that are not operating at world-standards can be dynamically replaced by external organisms that may be operating at world-standards. This kind of organizational objectivity and dynamic reconfigurability hardly exist. Thus, while the Digital Economy is in its fundamental nature instantaneous, fluid and supple, the organizations within it, which are mostly the outgrowth of the previous economies and paradigms are not, and some major redesigning and adjusting will have to take place to close this gap.

The organizational framework of today has arisen out of the Industrial Economy. The Industrial Economy was characterized by large-scale, less-competitive products in which efficiencies of production and distribution were usually enough to create a competitive advantage. The efficiency-in-scale paradigm was responsible for the creation of large, hierarchical organizations in which each level unquestioningly executed the tasks allotted to it.

Business itself was primarily dictated by a predictable paradigm in which predictable supplies were needed for predictable demands at predictable times to predictable markets. For the most part there were no surprises. By virtue of this gentleness humankind could ease into another kind of operation and ability, a notch higher than that at which the mass had had to operate at the time of the Agricultural Economy. There was certainly a higher degree of sophistication in financial planning, marketing, accounting and operations than had existed in the Agricultural Economy. Humankind had to grapple with the environment in a progressively more intricate and many-sided manner and consequently the mass of humankind went through a more rapid evolutionary development along certain analytic and organizational lines.

The emerging Digital Economy, however, is characterized by a far more complex, varied, and real-time environment. A single idea in the mind of a relatively powerless individual can, for instance, create upheaval in an industry. The playing field itself and the set of possible maneuvers are moving to a higher level of complexity. That which can be imagined, that which may begin as intuition can more easily become reality. The Digital Economy could well become a tour de force arena for Mind. To grapple effectively in this environment, individuals will have to move up a notch in their abilities. Individuals will have to develop the flexibility and maneuverability, the plasticity and suppleness to operate at the level of Mind. Furthermore, an effective force of dynamism will have to come to the forefront to make a quick reality of ideas.

In a sense the entire environment is more supple and plastic and will be shaped to the touches of effective individuals. This is in stark contrast to the fiber of the Industrial or Agricultural Economy, where new ideas would have to be hammered out again and again, tested in furnaces of the powers that be, before even becoming a glimmer in the external world. Many concrete examples of the extreme resistance to change abide – where brilliant ideas, be it in Energy or Transportation or Agriculture, have been shelved because they upset the balance of power. For instance, as many as seven decades ago, a certain scientist had designed the ultimate aerodynamic, fuel-efficient, and maneuverable automobile. Yet, because of the rigidity of the environment the concept could not find effective expression. Contrast this with today’s environment, where completely customized computing equipment is released in the market several times a year.

The fabric of possibility has been going through a definite shift. With the emergence of the Digital Economy this fabric has the potential to take on an especially supple character, as a result of which dreams will more easily find expression. Organizations created for the command and control economies of yesteryear will find it exceedingly difficult to succeed going forward. Hierarchy and bureaucracy will be suffocated in their own cocoons of inertia. An organization cannot be bound by the systems of yesteryear, by its own archaic rules of doing business, by the unwritten policies by which people communicate. A plastic, supple, flexible, empowered organization is what is needed to leverage the emerging reality of today. Similarly, individuals cannot continue to be bound by their restrictive thoughts and habitual reactions. They need to become points of infinity. Points through which the infinite possibility that is seeking to express itself can manifest. For that there needs to be a quantum shift in consciousness away from the reaction and habit-bound mannerisms of the past, to light-filled spontaneities of the future."

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