From analog to digital (network) institutions

Umair Haque has an interesting piece from his blog, Edge Economy that pretty much sums up the state of the art company/institutions at the moment:

“The real problem isn’t stimulus, it’s responsiveness. We’re trapped in a zombieconomy: one full of brain-dead organizations who are about as intelligently responsive as Homer Simpson.

Want better clothes? Don’t ask the Gap. Want better software? Don’t ask Microsoft. Want better cars? Don’t ask Detroit. Want better music? Don’t ask record labels. Want better healthcare? Don’t ask big pharma. Want to hold on to your money? Don’t ask a banker. Welcome to economic Bizarro World.

The economy has gone catatonic. Unresponsive corporations are just the tip of the iceberg. Markets can’t allocate. Investors won’t invest. Banks can’t value, or hold onto anything of value. People don’t trust, much less consume. What’s going on? The real problem isn’t how or what we stimulate – but that almost none of our organizations could respond in the first place.

Yesterday’s institutions have left today’s organizations unable to respond to an increasingly turbulent world. What’s responsiveness, and what does it have to do with institutions? Here’s a recent talkI gave discussing net-generation institutions…..Today’s organizations need a responsiveness upgrade. To that end, we need a new kind of stimulus: an institutional stimulus, not just a financial one, that makes our lame, brain-dead, zombified organizations more responsive. Gap, Detroit, Microsoft, big pharma, record labels, banks, evil corporations of the world – hello? Anyone home?

We can stimulate trade from here until Doomsday – but without more responsive organizations, today’s failure to create new industries and renew old ones will simply recur at an accelerating pace.

Money, value, and wealth are an outcome of having responsive organizations in the first place. Yesterday, the Manhattan Project renewed America’s technological base. Today, we need a Manhattan Project to renew our institutional fabric – because yesterday’s rules and principles are limiting the responsiveness of our organizations.

Haque thinks what we need is better contracts and standards, better governance and management. Maybe so, but perhaps the problem is even deeper. If I take this and look at banking and health, I think there is a lot more to this. Brilliant insight into the problem but we could do better in terms of solutions. I still think that there is much we can learn from the P2P, open innovation, cooperation discourse that we’ve merely scratched the surface of in recent years. My challenge in thinking about collaboratories and eco-systems of stakeholders who could create networks to drive disruptive innovation is to develop the tools to make these contracts/relationships flexible yet strong enough to generate the trust to build “organizations without walls”, how to make breakthroughs in a field such as healthcare where secrecy around IP is the norm and to open this up to enable new business models derived from the IP commons. Furthermore, what about an unsustainable market mechanism that works on the basis of the quarter rather than long-term, sustainable health outcomes?