Progress through scaling organisation
What should be in the top 5 of ‘most impactful inventions of the 20th century’? Penicillin? The steam engine or airplane? Radio, television or the Web? Perhaps. But now look at that list and pick one that did not require The Modern Organization to accomplish. As Max Weber first laid out early last century, the greatest net producers of wellbeing for humankind, have all been made possible by the power of people collaborating at scale in modern organizations. Remember the story of the Tower of Babel (Genesis 11:6) – if you can unite the world, speaking one language, to one singular goal, “..then nothing they plan to do will be impossible for them.”
When science started to focus on analysing the organisation of labour, the results were an exponential improvement of nearly every human effort requiring more than a few workers. From Taylor’s innovations around the division of labour, Weber’s systematic processes and organised hierarchies through the spread of the global multi-divisional corporation and multi-state governments; 20th century organisations vastly extended the distribution of products, services, policies and ideas around the world. They gave us global supply chains. Global medicine. Global transport. Global food & hygiene. Global political cooperation. In essence they allowed our world to now support 7.5 billion humans.
Even with existing inequalities in distribution of this wellbeing, that’s still the greatest accomplishment in the history of mankind.
The problem with scale
However, these organizations grew to levels of complexity that were never ever imagined, let alone managed before in history. Only one global CPG company today, manages more complexity than entire empires of old. Federal and multi-country governments need to align hundreds of millions of conflicting stakes. Unintended consequences abound: waste, pollution, fragile supply chains, disconnected citizens. Many externalities of these ‘human organisms’ simply have never been predicted or accounted for. Add in a bit of the carnal corruption of centralised power and it’s not hard to imagine some people blaming modern organisations for doing more harm than good.
But it’s not for humanity’s lack of trying to fix this. As soon as we became aware of the actual impact our industry had on a planetary scale, the response was arguably quite admirable. Unions rose to power and helped vastly reduce child and other forced labour. Mechanisation and automation greatly reduced physical strain and injury in factories. Companies have been trying to align stakeholder interests around the external challenges of reducing waste and environmental impact. Making supply chains shorter and ‘cradle to cradle’. Most recently, we started to orchestrate supply and demand better through connected software. Unfortunately, most governments and NGO’s have lagged behind in realising the corrosive effect of too much centralisation.
Ultimately, there’s only so much we can do to avoid the effects of entropy, implicitly linked to the exponential complexity of our organisations, that increases with size. As with the difference between the local weather and the global climate – there is a natural end to the amount of variables that can be influenced by human decisions.
Decentralised technology to the rescue
Enter the Web, but specifically the underlying protocol TCP/IP, allowing for large organisations to balance local execution with centralised orchestration. Notably the first time since the Tower of Babel that all of humanity was united again around one language. It’s immaterial that it was the machines that we united first; it allowed for individual and mass human connection at a global scale. Just in time for when we needed it. The Web and all decentralised connected technology in its wake, may singlehandedly have postponed global organisations to collapse under their own weight. One might say we live in the extended time that the Web bought us.
Crucially, these technologies allows both fully decentral and fully central command & control structures. The most visible success stories these days over–emphasize the centralized perspective. Much has already been written about how the power of Big Tech is purely derived from sucking the marrow of data out of the bones of connected humanity.
But whether we like it or not, this makes Amazon simply more efficient than any competitor before it at supplying almost anything. If it put its full resources behind it, it might become better at sourcing almost anything too. Google is better at organizing information than our governments and universities. Apple is better at delivering us all this innovation through attractive experiences, than any device has ever been. Social media platforms offer all of the communication potential of legacy media and more.
If we are intending to live on this one planet with, let’s say, the maximum estimate of 10 billion humans, we can’t simply abandon these efficient centralised organisations to orchestrate supply and demand; to facilitate free mass communication and democracy. However, we should simultaneously be working on decreasing entropy by decreasing complexity through decentralizing supply chains and decision making in large corporations and legislative bodies. This directional goal needs to be urgently translated into new management and policy making theory, so we can start with practical strategies as soon as possible. In many areas of society, these strategies have already emerged out of necessity.
For example, although local farming can’t feed 10 billion, it can make local communities more resilient during global supply chain disruptions. Similarly, local energy production cannot produce the amounts of power needed for industrial purposes, but it can redistribute local domestic production reliably through a more robust grid than the current centralised one.
Going forward, we’ll need both the powers of centralisation as well as decentralisation at work simultaneously to orchestrate production, energy, transport and health for life on one planet earth.
For that to work we need to finish the web and allow for more decentralised control over data. People are starting to wake up to the fact we never did. Decentralized digital finance for example has only recently been a practical option through blockchain, crypto + deFi governance innovations. It needed a 2008 global crash to get urgency and momentum behind it.
Consumer facing, privacy proof commerce technology, hasn’t been finished either. It’s a sad mix of democracy-crashing scandals and scary vaccine passport requirements, that are forcing us to re-think the construction of a global unified, decentrally managed digital identity. We hopefully get to choose a privacy first version, meaning: managed securely and anonymously by the individual. We may just get there in time, before we surrender to a centralized version as seen in the CCP’s social credit score, that even Huxley and Orwell couldn’t have imagined.
But we wouldn’t be done if we did. Managing the global economy of scarce resources, relies on matching demand with supply. The time is passed when we were building (rail)roads, shipping corridors and retail operations, to distribute an abundance of produce to ever new consumer audiences. Soon gone will be the times where we could afford to spend billions on ‘Brands’ to ‘help consumers choose’ between the plethora of options in the shopping aisle. How can we afford the type of companies that spend up to 15% of their turnover on marketing and trade promotions, if 10 billion people are to live in anything above starvation levels of prosperity?
So it seems we don’t just need consumer behavior to become transparent to our collective economic orchestration, we also need production to be. And similar to the web of content, consumers and money, digital supply chains can only be built on top of a foundation of decentralised product identity and supply chain communication. The TCP/IP of production.
TCP/IP is both language and identity. It’s knowing what has been said and who said it. It’s agreeing to a definition of communication. It’s the foundation of organization. It’s the foundation of the web that has unified the demand side and will unify the supply side infrastructure of our economy. It just hasn’t been purposed for the world of products yet.
Without this ‘next level’ TCP/IP for the web of things, entropy will stifle growth and potentially, likely even throw us back decades, upon any serious supply chain disruption. Let’s say a more lethal virus pandemic, or an sunk containership blocking Panama canal. But without the pendulum swinging to a more decentral control option over information, the requirement of personal freedom will prevent efficiently orchestrating systems to be adopted. Or worse, much much worse, the requirement of personal freedom might be removed to enable software controlled tyrannical structures.
Work is underway to close all the gaps on the next versions of the “TCP/IP” for both consumer and production level identity and communications. We can and have to choose for decentralized control over data even if we allow entrepreneurs and policy makers to build centralized orchestration and governance models. The individual’s property rights needs to be extended to the identity and data that is associated with our goods and services, just as much as our individual freedom of speech needs to be extended to include a world of social speech and connected products and services.
Global decentralised standards for digital personal- and product identity are needed for a world of 10 billion. Applications built on these standards will have to cater to local need for relevance, immediacy and personal freedom, as well as the central needs for coordination and efficiency. But we need to adopt these with both a sense of urgency and inevitability, as well as a sense of human proportionality and a firm dedication to personal freedom and layers of protection against tyrannical government. Or we stand to lose both to the ever present threat of the dictatorship of best intentions.