Simone Cicero:
Welcome. Welcome back everybody to the Boundaryless Conversations Podcast. I’m here today with not so usual co-host that you already met on the podcast, another colleague from Boundaryless, Emanuele Quintarelli.

Emanuele Quintarelli:
Hello, nice to be here.

Simone Cicero:
Thank you, Emanuele, for joining us today. Emanuele is our 3EO microenterprise lead. And with us today we have a very special friend, Michele Zanini.

Michele Zanini:
Hi, Simone and Emanuele. How are you?

Simone Cicero:
Ciao, Michele. Very good. I am very much looking forward to the conversation today. I don’t think Michele needs any introduction, even if probably we’re going to record the one on top of this. But let’s jump straight into the context of the conversation we’re having. I shared with Michele a few weeks ago, some of our recent writings with regards to the impact of contracting, widespread contracting on the shape of the firm, on brokers ease and the transformation of the corporate complemented by our common work on contracts and platforms that can enable a different way to organize a firm around agreements and micro enterprises and units.

So, the point, the initial question that maybe we can open up this chat is really about what is the reality, how we’re just picturing a future of overcoming bureaucracies through team-based entrepreneurial ecosystemic organizations, made of small teams that can contract with each other, inside and outside your organization, for the creation of new products and services, and whatever. Or this is just something we are thinking and it doesn’t really work like that and we cannot really expect any massive change to the industrial structure of the firm that we are used to probably from the last 200 years or so. So, Michele, let’s start from there. Are we just daydreaming or is there anything solid backing this kind of prediction?

Michele Zanini:
Yeah. Well, the big question to start off, but it’s a very good one. I mean, and it’s a legitimate one because most of us are accustomed to an organizational model that works very much like a command economy than a market. The average fortune 500 company is modeled after the Soviet Union, right, not Silicon Valley. And I think the reason for that isn’t because there aren’t alternatives or because most CEOs don’t know any better. You know, every organization that they’ve encountered runs like that, right? And it actually doesn’t help that economists have kind of long viewed markets and firms as mutually exclusive. You know, as far as they’re concerned markets are decentralized and firms aren’t and there’s no gray area in the middle.

I think it was Coase, Ronald Coase, the economist who was very famous around, his work around the nature of the firm and transaction costs. He called firms, islands of conscious power, right. They’re basically inherently authoritarian and need to be managed that way. And we think this might make sense for economists because it makes their life easier, it makes their interpretation of the world easier. But it’s a very simplistic and a way of looking at it. Because while Coase, he was right when he said that there are certain inputs and activities that firms can’t easily acquire, and therefore, they must — in the marketplace, and therefore, those must be internalized. What he and other economists failed to appreciate is that once these are absorbed, these inputs and activities can be organized in quasi-market ways. Market mechanisms and administrative coordination are no more mutually exclusive than chickens and pigs. You know, they’re genetically distinct but they complement each other very nicely on the breakfast table.

So, I think there’s this dichotomy that we just need to get past and technology and other developments have made standardization and the like they’ve made market-like ways of organizing within firms much more doable and feasible and effective and powerful than even 20-30 years ago. So, I’m optimistic. There is an alternative and this alternative to bureaucratic command control is now more available and more powerful than ever before. So, I don’t think you’re dreaming. I think this is something that is quite real. But then there is a struggle around adopting this concept and these tools, and we can get into that, and why that might be a difficult road. But it’s a very real one for me.

Simone Cicero:
And just a quick, you said, there is hope for that, right. So, I’m wondering if there is any positive outcome that we can attach to these kinds of transitions, right. Because in my recent post, contracts in the future of the firm, I posted that, essentially, the fact that now it’s easier to make contracts and essentially, teams are much more empowered, this may lead to teams starting to reconsider their priorities, and do more embodied work, more work that is more relevant for them, for their stakeholders, essentially, also impacting the — reducing the typical leverage that in bureaucracies, a very bad idea can have. Think of an executive say we want to do this, we have to do this. And so I have the power to enact that across the whole organization and basically multiply the destructive nature of anything that I can decide. So, is there some kind of positive connotation on having contracts, more widespread teams, more autonomous work being more defined at the edges of the company versus the center?

Michele Zanini:
Oh, yeah. I mean, the benefits are huge. So, what markets do really well, I mean, they do quite a few things really well. But one is they make coordination dynamic. I mean, think about the feats of coordination that are available to you because you are in a market economy. Let’s say you live in Rome, and you — think about the last dinner party you hosted, Simone, in your fancy loft, overlooking St. Peter’s, as you know, right. And maybe this was pre-COVID. But just think about, like what — before the big day, no one could have predicted what you choose to serve your guests, right? And you went online, and it was all there. You got Angus beef from Scotland, you got asparagus from France, potatoes from Jersey, butter from Denmark, some really lovely cheese from the Alps, and so on. And after two hours this order was all there.

Now think about the bureaucratic kind of top alternative to that. Months or years before your party, you would have had to needed to tell all the farmers what to plant, what not to harvest, how to get their goods on the market. You’d have to tell where to plant the vines, when to pick the grapes. So, it’s crazy, right? So, the point is even something as simple as provisioning a dinner party exceeds the limits of top down planning. And then you can scale it up to a city or a company. And this kind of amazing feat of coordination are facilitated by contracts that span the globe. These agreements that are just bringing all these resources together. And yeah, it costs money to write and enforce these contracts, right? Sure. But the market based coordination is certainly way more efficient and flexible than the bureaucratic alternative. So, that’s like one huge advantage of markets.

The other one, dynamic coordination. The other one is just the wisdom of the crowd. You’re just able to tap the resources and the insights of dispersed groups of people around the world that are not within your control, and you don’t have to manage on a daily basis. So, the kind of collective intelligence that comes from taking a market-based approach is huge. And then the last thing, I suppose, less advantage of a market, overtaking a market-like mechanism and approach is that you create competitive discipline, right? Basically there are no monopolies; there are typically several providers. So, if someone who’s serving you isn’t dealing with you fairly, or not providing the right services, you can get rid of that relationship and move on to another one who might be more responsive. Obviously, Haier has done this very well, by creating these competitive markets for the provision of internal services, such as IT or HR and so on, but other firms have that as well.

And what drives me nuts, sometimes when you hear HR or IT, saying we have internal customers, right? And then the question to them is, like can they fire you? And they say no. Well, then you’re not really your customers, right? They’re kind of your captives. I mean, you treat them nicely. But the competitive discipline that a market-like mechanism creates helps everyone really focus on the customer and doing that effectively, efficiently. So, those three things, the competitive discipline, the collective intelligence and the dynamic allocation of resources and coordination are really difficult, if not impossible to achieve through kind of a bureaucratic top-down approach. So, those are the big advantages that I think, and they’re huge, right? And companies that have done this well like Haier, have showed that they generate a ton of value. So, that’s really the challenge for those who are interested in supporting the status quo. How would you replicate those advantages with a traditional management approach, and I think they wouldn’t have much to say, in defense.

Simone Cicero:
As a compliment, I would say of this initial overview, and I think the point that you are making around something that only markets, marketplaces and markets can deliver, it’s very interesting. And my feeling as a researcher of platforms and marketplaces for now more than 15 years and so on, I have this feeling that essentially, we started with complicated and dumb contracts. Data bureaucracies are based on, so, this idea of amassing suppliers, contractualize them for the long term. And this is part, for example, of Oliver Williams’ work. So, the fact that if you have a very high friction, let’s say, in changing priorities, for example, you may want to have a long-term contract with a supplier. And that’s essentially industrial age contracts. And the fact that in that context, the only transaction that was left on the market was purchasing. So, basically, you can only consume in an industrial bureaucracy as an external player. Then it’s kind of we moved on the other side of the spectrum with this kind of platform revolution that everybody’s been talking about. So, we started to build the marketplaces, we started to build these platforms and aggregators.

But the delusional aspect of such players is that the roles that you can play, of course, maybe are also including producer roles. Like, you can host someone on Airbnb, or you can sell your stuff on amazon marketplace. But the whole experience is very much encased in a model and scaled up. So, there’s not much freedom, actually. You can only play a certain role in a very structured marketplace model, let’s say. So, you have a very efficient model, but it’s not really still industry from a certain point of view. It’s still about imposing a model to the others. And now we are seeing this very interesting kind of rebound. We’re seeing the situation coming back to not dictating the experience that you have to engage with on a marketplace, but rather getting small players the possibility to kind of create more complex agreements. For example, the ecosystem micro community contracts that Haier has bring forth. But in general, the idea that you can have many small players agreeing on a contract to bring something new, some new outcomes to the ecosystem, and doing it with some technological tools that basically make scale no more so important. So, basically, you can have much more variants, much more differences in the agreements and transactions that happen, just because now it’s not just about playing a role or clicking a button, but still about establishing your agreements and contracts and cooperating in a much more nimble and easy way. So, I don’t know if you see that happening as well. And if you feel like this kind of entrepreneurial model, like Rendanheyi or how else we call it, the 3EO can really represent this kind of bouncing back from the rigidity of this new tradition of marketplaces and platforms.

Michele Zanini:
Yeah, and that’s a very good thought because to take the side of those who are critics of market-like mechanism inside of firms that might say, well when the inputs you’re requiring are difficult to value, or they’re essential, they’re scarce. Like, in the marketplace you know, it’s hard, right, because as a buyer, you might be at risk of being held hostage by the seller, or when the empathy to be integrated in very complex ways that you can’t specify in advance markets don’t work, right. For instance it’s hard to imagine how Pixar could duplicate the deep experience and the shared wisdom of all its digital animators by contracting their work out to a bunch of independent contractors.

So, there are limits and that you have to recognize. But I think the choice isn’t between markets and hierarchies again, but between arms-length markets, like the ones you described, Simone, which are very kind of super transactional, and in a way rigid in terms of how they specify contracting and how that ought to work. It’s between those kinds of markets and what we call socially dense markets. Because at places like Haier, and even Morningstar, the largest tomato processor in the US, which operates, and maybe we can put up some links are similar, your audience might be familiar with Morningstar. But they engage in contracting between different units and different people working in the morning star plants. As these examples demonstrate, you don’t need a tonne of managers to coordinate individuals and teams, but you do need people that are able to interact with one another in a much more flexible way, in a way that is also relational, that it’s in purely transactional.

Because the people at Haier, even though there are new micro enterprises at Haier or these colleagues at Morningstar, even though they are engaging in market-like transactions, they know each other quite well, they have a common purpose, they have a common vision, and so you got to think about that, as well as a compliment, right? This isn’t just atomistic kind of transactions between players that have nothing in common. So, it’s not just about markets but it’s about creating markets that are, as I said, socially dense, that recognize the fact that some of the work is relational, and you can’t specify everything in advance, and it isn’t rigid. So, we’ve got to adapt the way we think about markets inside of firms so that they fit the context. And I think the work and the thinking you guys are doing around these platforms, and creating flexibility around how contracts and agreements are set, is a pretty important way to get there.

Emanuele Quintarelli:
I want to jump in here and just stress one point that you have raised. To me, the point is that another benefit of market-like organizations is scalable freedom, while still guaranteeing coherence. And what I mean by that is that I was speaking at a conference of organizational designers recently. So, people doing this job, basically designing new organizations. And it surprised me that they couldn’t imagine the possibility of empower every single individual of the organization with freedom while still having an organization. So, basically, they were seeing hierarchy top down and control, cascading budgeting as the only ways to maintain control, to maintain coherence, to maintain identity. What I believe that Hyre has demonstrated very well is that you can go beyond the early experiments of autonomous teams, and rebound of those teams, thanks to contracts without hierarchy while still maintaining this coherence. This is quite unique. It’s jumping to the next level, it’s a new possibility that we can use to scale, the freedom that we have seen in some early experiments to huge organizations, global organizations, thanks to technology.

And to me, there is another, if you want, misunderstanding when we talk about market, like dynamics in organizations. The fact that we tend to imagine only transactional exchanges. So, I give you money and you give me work. But that’s not exactly like that. The forcing function or the KPIs that we may use – and here Zappos is another example – can go beyond money. It could be customer outcomes, it could be employee development, it could be profit. So, it’s up to the individual organization to decide what they want to be driven from. But still, you may go beyond market-like as money. It’s not just money, it’s a coordination, a scalable coordination system that guarantees freedom and coherence.

Michele Zanini:
That’s exactly right. And I think it’s an important point I wanted to make that most people think of freedom and control as a fundamental trade off. It’s either one or the other. Either you are, like a military organization or you’re a keg party. And like if you’re a keg party everybody’s free, but it’s chaos. And if you’re a military organization everybody is like, obeying orders, but it’s super incremental. And I mean, at some point, I suppose there is a trade-off between freedom and control but we’re nowhere near that line, that frontier. It’s like in, I don’t know, like 50 years ago, people thought there was a fundamental trade-off between price and quality of cars. And you could either if you wanted to have a cheap car, you drove a Hugo. And if you wanted a really high quality car, you drove a Mercedes.

But Toyota then showed the world and Honda and others that, no, you can actually have high quality cars that don’t cost much. And I think we need to be as inventive, as innovative, as Toyota was, in their cases, reinventing the production process. But we need to reinvent our organizations so that they can be disciplined and free. And obviously, Haier is a very good example of how you get coherence, and coordination and control while at the same time giving people individual freedoms. And then the coherence and control comes from these contracts and the fact that they have, also the shared goals and skin in the game and so on that you guys have probably talked about in previous podcasts and publications. So, we can go there if you want, but I won’t belabor that point.

But it’s also true that there are other mechanisms to do this, that are maybe more relational than market-like. And again, to me, you got to think about this as a continuum. And some organizations are going to index more and some — on market versus community. But I think you could — the sweet spot is you have to have both. I mean, another really good example of this is Buurtzorg. They have 16,000 people working in 1,000 or so self-managed teams. They’re the largest homecare organization in the Netherlands and they are, by far the most efficient, the most client focused, the best place to work in their sector, by all sorts of measures. And they do that with basically no management, no bureaucracy. It’s basically there’s no layer of management between these teams that are self-managed, who are responsible for their own territory, managing the patient experience, and so on. And the founders, including Jos de Blok, the founder of Buurtzorg. And the way they do that is, in large part, as you say, through a technology platform called WeLink that connects all these teams together. It makes performance across these teams transparent, it allows teams to see who’s doing something really well. And so you can kind of go to that team and understand what they’re doing. So, learning and insights and information spreads horizontally, not vertically.

And where everybody has kind of — feels like they’re part of a community. And so they are incented and motivated to share best practices and tips and tricks to make the whole system better, not just their own little part of the company better. So, you have to reinvent the mode of control and make it much more reliant on horizontal coordination, mutual adjustments. And a lot of that has to do with market-like mechanisms that are situated though in my mind in a sort of shared social context. And maybe we can get to that and maybe you guys have a different point of view here. I see a lot of people are now talking about Web3, and tokenization and kind of thinking that this can be something you can do in a system that has no trust or that trust is generated in a kind of very impersonal way and I have my doubts about that. I do think that a shared social context, a shared set of relationships and some sort of social fabric, it is important to enable these kinds of market-like mechanisms to thrive inside of firms.

Emanuele Quintarelli:
No, I think this is a very important point. And on one side, I see lots of potential to be sincere in web three and distributed autonomous organizations. In a sense, this is where Haier itself is going using smart contracts on the blockchain. And the reason for that is just because we want to get rid of bureaucracy, something that of course, you got a lot, Michele, in the book. And there may be other mechanisms, reputation, for example, to understand if some people can contribute or you can trust them. And trust can be baked into the system. But on the other side, I’m with you. I want to have a relationship with those people. I want to breathe, I want to shake hands, I want to see them. I don’t know if we can replicate somehow these very social and human needs into an algorithm in which identities are not known. I think this is up for discussion. Technological support is there already. Investments are coming. People needs should be somehow supported.

Simone Cicero:
Well, I mean, the idea of blockchain in general I think, somehow helps me to connect with something that was coming up to my mind as you, Michele and Emanuele , you were discussing these ideas. So, the question is once we have a protocol, let’s say where we can articulate our contracts, we can essentially be able to describe the way we collaborate, the outcomes and you, Michele, you spoke about and Emanuele as well, you spoke about, essentially, the relationship between work and money. And I will generalize it, let’s say, in terms of skin in the game, and work, right. So, how the skin in the game you have in the outcome generates the work that you contribute to some kind of contract or activity. So, essentially, as we factor in this idea of the blockchain and this idea of common protocols, I’m tempted to think that this goes beyond the single organization, and to some extent into that space that Michele, you were referring as becomes trustless, right? So, in general, this context where there is less social cohesion, and it’s much more about again, low trust environments that you’re skeptical about.

So, the point will be, really how do we — So, if we think about extending contracts beyond organizations, so beyond the single org, and maybe by leveraging these technologies and common protocols, we can think of two teams in two organizations or more, as is happening already, for example, in Haier, to contract and to agree on building something new. So, what gives you context then? So, is it the appeal to relationships and societies and communities, something that we can imagine as related to landscapes, or maybe related to communities more in the traditional, let’s say, way of thinking about them. So, somehow re-localizing some of the footprint of the organization that during the industrial age has been completely disconnected from the landscape. So, is there something also credible on thinking that the evolution will bring us back into embedding organizations into their communities and landscapes? Is it something that comes to your mind as you’re doing your research or not?

Michele Zanini:
There will be some ways of orchestrating human effort that scale through market-like mechanisms that are impersonal and atomistic and atomizing. I mean, think about Mechanical Turk, or Uber or a lot of the gig economy. Those people are just managed by an algorithm and just doing their thing. And it’s very clear how much they get paid, and for what and so on. They may have their place. But I think as soon as you get into something where the actors have to work together to produce something, so it’s not just about organizing independent contractors to do their thing, and without much interdependence between them, when you engage in something a little bit more complex. And there is reciprocity, there are interrelationships, I think you have to think socially, not just about the technology, or the contracts, and the tools.

I see a lot of a lot of emphasis, maybe the whole discourse around Web3, is almost like it’s 95% about the tools and how cool they are. And very little about how they actually work in practice and how people are supposed to interact with one another beyond using the tool. And to me, that’s important. And I think there are parallels, there are things we can learn from, other efforts where you are bringing people from all sorts of organizations together, right to solve a common problem. I mean, the open source software movement is all about that. Think about, for instance, the way the Apache project and foundation works. Apache, I think, is the operating system that most servers use around the world. It’s very robust, open source project, and they have a foundation. They have teams and projects and within it, and they’re all working kind of autonomously but also coordinating with one another. And they have incubators for new initiatives and they’ve been at it for a long time very successfully. They don’t have a blockchain. They don’t have a DAO.

And so like, I guess my challenge to those who are really keen on these new technologies is how are these technologies helping you manage these kinds of distributed efforts in a way that is better than these than what they’re currently doing, and in a way that requires less trust and less social and relational capital within them. And I don’t have an answer to that. As I said, I’m open-minded, but I haven’t seen anything that gives me confidence that there is a better model yet. I mean, potentially, but I just maybe it’s early days. I mean, that’s always what you hear in Web3, it’s early days, but maybe it’s true.

Simone Cicero:
I mean, my impression is that these technologies brought up some new enablers, some new use cases, that are evidently in search of an application, an application context. So, to some extent, that’s what happened. So, now you have this kind of BFT, Byzantine Fault Tolerant consensus mechanisms that can help you orchestrate possibly malicious actors towards shared consensus, and that’s one enabler, then you have all these layers of basically, financial economic spacing, which ERC tokens and attaching features to tokens, and so on. So, I think to some extent, yes, these new enablers have brought up new use cases that which we don’t know yet how to use. But I’m sure that maybe they can finally unlock the transition from this kind of traditional context in a much more unbounded way to think about the organization leveraging on those.

But the point that you bring up about social cohesion, something that I would have would define as shared skin in the game, if you understand what I mean. So, as a group, we have something shared that we’re building, we are constructing where we are attached, from certain points of view, that’s hard to connect with technology. So, it needs to be I mean, you spoke about open source and in open source project, there is some extent of shared skin in the game because these developments and companies are using a commons. That is the software, the open source software. So, when it comes to organizations, maybe we have to think about how also the changes in the market, in the context, in social contexts bring up new need when it comes to skin in the game. And I’m talking about, for example, resilience related topics, like energy production or other essential processes.

So, maybe the question is, now that it’s possible to organize in this much more cooperative and shared skin in the game inspired way, what are the impacts on the corporate? So, when people do not need to rely on the corporate for security and work where they are more sovereign in terms of defining what is the work they want to bring to the world, is this change going to happen? Or maybe we have this huge gap in terms of cultural readiness of our societies to really take responsibility on their own fate and their own systems?

Michele Zanini:
Yeah, it’s a good question. I don’t have an answer to it. In a way, I am hopeful, because the trend is pushing us towards these kinds of approaches, and they are easier, as I said, and more effective than ever before. On the other hand, the reality is, most economic activity is still managed in a kind of a traditional, traditional way. And the transition will be hard, right? Because those that are doing well by the current systems are not going to be terribly inclined to kind of give their power away. And that’s what these approaches, whether it’s web three or variants that are not as sort of focused on the blockchain and tokenization and so on that other firms are adopting, are doing, they’re just blowing up the bureaucratic pyramid. And those that are at the top of the pyramid aren’t going to be very happy about that. And so, it’s a struggle, it’s going to be a struggle. And, I mean, I guess there are two options.

One is that we get like the fortune 500, get the large companies to be more like Haier and say you need to transform yourself. Whether it’s CVS or you know, BP or Lloyds or whatever, Siemens, and say you just basically need to disaggregate, flatten the hierarchy, create all these mechanisms to link all these units together internally and then with the outside world. And it will be something that will take you a decade or more and it’ll be sometimes painful to do. Haier has been added for a while and they’ve hit some dead ends, and it wasn’t easy. Yeah, maybe you don’t have to make the same mistakes, or hit those same dead ends as Haier did, maybe you can learn from them. But still, it’s a complex transformation you’re talking about. So, that’s option one, you kind of reform the old guard, right, and you make them, you can transform in this way. Or you just say, forget them, we’ll write them off, they’re irreformable and we’ll just have to wait for a new crop of organization to come and they’re organized in a very different way.

And I don’t know, sometimes I’m torn. Some days I think there’s really hope in transforming larger established organizations, and in a way, that’d be my preferred path. Because they do have amazing capabilities, amazing people. And so, can we deploy those in a more productive way, inside of those firms? I think that’d be better. But sometimes I’m like they’re just irreformable. And by the way, that’s my work, my life’s work in transforming these organizations, so that’s like what I’m wedded to. But sometimes I do think, oh, my God, it’s too hard, and we should just give up and focus on cultivating the new crop of firms and make sure that their DNA is different. The complicated thing about that, and I’ll stop and curious to get your thoughts. The complicated thing about committing to cultivating a new crop of firms, is that these firms may look and act like little startups and be very flexible when they’re young. But as they grow, they will almost inevitably become as bureaucratic as the incumbents.

And so there’s like a DNA level issue here, that even for those firms that are small now, that they may become less and flexible now, they may become less so in the future. Yeah, it’s hard. And by the way, just the last thing, I’ll say, on this, just a data point, Gary and I were doing — Gary Hamel and I, my co-author and partner, we’re doing some research around the turnover of large firms. So, the number of firms in the Fortune 100, the largest firms by revenue in the US, and how many of them are still on the list after 10 years. And we went back to the 90s, the turnover has never been as low as it is right now. So, in the 90s, I think the churn rate was quite high. I think it was, like 60% of the firms that were on the fortune 100 list in 2000 weren’t on the list in 10 years before. But now, it’s like most of the firms that are on the list have been on the list for decades. So, we’ve gotten these firms that become so big and so entrenched, that it’ll be hard to dislodge them.

Simone Cicero:
Too big to fail.

Michele Zanini:
Yeah, I don’t want to be pessimistic here, guys. But it is going to be a big challenge. Just because we have a good technology and a good approach doesn’t mean it’s going to get adopted.

Simone Cicero:
Maybe this transition deals with we becoming more entrepreneurial in the sense that, of course, if the incumbents cannot change, it’s up to us to make the new institutions. And so we cannot get this transition administer to us for us to consume it, but we have to actually be part of this transition and building this diversity and pluralistic system of organizations that start probably from our interconnectedness and embeddedness in our landscapes in our cities and our communities and from the production of our essential needs. So, maybe that’s the point. What do you think, Emanuele and Michele, about that?

Emanuele Quintarelli:
I think that the problem is potentially even bigger. Since, as you said, Michele, you may start with the best intentions when you’re three, five, 50, 100 guys. But eventually, you become one of the bad guys in terms of structure, bureaucracy, control. So, I’m not sure we can get out of it just by hoping that new firms will embrace a different flavor of management. And if we amplify this, we put everything together, we are talking about society. We’re talking about the entire business world, we’re talking about the implication of the business on human beings, on children, on the environment. So, I think this is a wicked problem that we need to tackle now. Because otherwise, it’s not just a matter of profits or jobs. It’s a matter of what’s the impact of humanity on the globe we are all living on. So, I think this is bigger and we definitely need to tackle.

Unfortunately, I don’t have the answer about the best entry point. I think there are multiple entry points as in any complex view of reality, but definitely empowering human beings and their ingenuity to create and contribute that is not only finalising the organization, not only on profit, but that looks at externalities if you want, and not seeing them as externalities, seeing them as creating value for all the parties involved. It’s really the biggest problem that we have right now.

Michele Zanini:
Yeah. No, I totally agree. And I think there is hope there are examples of companies and ecosystems coming together. So, I want to be optimistic, but I want to be also realistic about the challenges. And I do think that, at the end of the day, unless you switch your paradigm, about the role of the relations between people and the organization, you’re not going to get very far. In the bureaucratic model people are seen as instruments, right, they are the resource that the organization uses to make money, or whatever. If that’s your paradigm, you’re always going to get — You’re always going to end up in a more kind of bureaucratic model sooner or later. Because that’s just your worldview. If you instead start with a different worldview, where it’s the individual who’s the agent, the individual uses your organization, the organization is the instrument, so you reverse this relationship.

And it’s the platform, the organization is the platform you use to make a difference in the world, then that creates a completely different way of looking at the world and allows you to then imagine ways of organizing that are quite different. I mean, in a way, you got to start with those kinds of first principles, and Haier and Buurtzorg and New Core and Morningstar, and others are all based on that idea that the instrument is the organization, the agent is the person. And it sounds a little like loosey goosey, but it’s not. And it has profound implications for how you pursue the organizational design and how you evolve that over time. And I think that’s where you got to start.

So, the technology is important, it enables you to achieve these kinds of ways of organizing, but unless you change that fundamental paradigm, unless we get more CEOs, right, and more people to think about the organization and people in that vein, I’m afraid they’ll look for other ways of aggregating human effort, right, that there’ll be other technologies that they’ll use that which are not as liberating, which are not really focused on decentralization. They’ll focus on things that centralize and disempower. So, that’s what — We really need to reset our worldview in a way for these kinds of changes to stick, in my mind.

Simone Cicero:
I tend to agree especially when you pose this question of disempowering ways, I think it really also, I mean, something has to give. So, we have to go beyond as I would say, as people, we have to go beyond this idea that we’re looking for a job in these organizations. So, to some extent, buying there are ways to exist in the market, let’s say. And I think that’s where it’s up to us. So, disempowering not embracing, disempowering vision of an organization may come through as accepting the challenge of building alternative systems. And so yeah, maybe I think we got to the core of the conversation we are having. So, it’s hard for existing incumbents to change in this direction, only the braves and only the wise are embarking on such a transition.

Those that don’t probably will go through harsh times and possibly collapse and possibly disappear. But then what’s left is not necessary, I would say, I don’t know, a progressive, super cool, alternative corporate model that we can subscribe to. It’s something maybe that we have to build in terms of building nodes that interact with each other using common protocols and common contracts where we have direct skin in the game on the outcomes, where we are as entrepreneurs, as people, we have direct involvement. So, it’s not something we can just wait to happen. It’s much more about engaging on building these alternative systems. What do you think?

Michele Zanini:
Yeah, that’s absolutely right. We have two choices, either we can moan and just bitch about how bad the status quo is, or we can mobilize and get things done and work at the very practical level. So, building the tools that enable these kinds of interactions, building the mechanisms that allow people to aggregate effort in a novel way. And you got to build it from the bottom up and show that this is really happening. And if it is, as powerful as I think it is, it will make waves and then people will start to notice and adoption will increase. I mean, it’s not a — There is definitely hope. But as you say, we got to work, have very kind of — we have revolutionary goals, but then kind of work in a very evolutionary way, very practically, at the ground floor.

So, what you guys are doing and what Hyer’s doing, and others have just trying to create these ways of, you’re plugging into a platform that is shared, is really cool. And you’re in a way are changing, and very useful. You’re changing the way we even think about platforms. Because as I said, I think most people think of Uber, or Airbnb and Lyft and TaskRabbit as platforms. And yeah, sure, they’re platforms, but they’re not really platforms in a way that truly enable people to build on each other’s insights, ideas and work and provide a real alternative to the firm, right. So, I think that’s it. We just got to work at a very practical level.

Simone Cicero:
And the challenging task here, I think, is that most of this transition is very boring. Boring, I mean my friend, Indy Johar speaks about the boring revolution, right? So, the idea that if we have to rebuild things, such as our key support systems, like food and energy, and I don’t know, welfare and health care, some of them are very boring. And we have to engage with them because we have to have first-hand involvement on building those, on building those organizations because they are contextual. So, I mean, a lot of what we’re talking about is a transition from a rationalistic, mechanistic view of the organization as an abstraction into something that is much more contextualized to our needs, our communities, and so on.

And, unfortunately, that can only be built by skin in the game, by participation, by taking care of developing the services, developing the financial models, raising the capital, deploying and developing the organization itself. You know, it’s boring, and I think that’s a major cultural issue that we have to deal with. What do you think? And maybe that’s a good way to close. I don’t know if, Emanuele, you want to add something. But thinking about this cultural problem that we have, this cultural gap between the expectation of our people and ourselves as well, and the reality of the kind of situation, we live at global scale, with a completely — the need to completely reinvent how we produce most of the things we use, and the services we consume, but being too bored to engage with it.

Emanuele Quintarelli:
I don’t think it’s boring. I think it’s one of the most fascinating, actually, ventures that one could aspire to. I see 10s of millions of people waking up every morning disengaged, disempowered. And as we all know, this is a huge toll on the global economy, but it’s also a huge toll on our lives. So, I think that this is not boring, actually. It’s a crucial step and a crucial activity. Also, when you look at that from a market perspective. So, if you want to have better service, if you want to have better products, if you want to have better experiences, we need to hear about the human beings and the human dynamics within organizations. What we have been discussing today with contracts is actually a bridge between these two worlds. It’s an intimate connection without which we are never going to see better outcomes for ourselves, first of all.

Michele Zanini:
Yeah, I would agree with that and I would just say that we need to make kind of management innovation sexy. The way it was like 100 years ago, people like even Frederick Winslow Taylor who I, in a way, detest because he just thought so bad, so little of so many people, especially frontline workers. But he, in a way, believed like others in that generation that the way you develop ways of managing, of leading, of organizing was a fundamental driver of organizational performance and human accomplishment. And that’s absolutely true. Management is a social technology. It can be innovated upon, it is being innovated upon. But somehow over the last 20-30 years, we’ve, with some exceptions, we’ve basically resigned ourselves to the fact that management as we know it is like as good as it’s going to get. We’ve reached the end of management, and like, yeah, maybe we can tinker it at the margin, and people can work from home or whatever, fine.

But like the fundamental template of organizations which is authoritarian and rule driven and so on, hasn’t changed. No one’s really questioning that, and no one thinks that we can question it. So, we talked about business model innovation, and everybody’s really excited about that, but very few people talk about management model innovation, right? So, we got to get more people to appreciate, I think, the power of managing innovation, and the value that it creates, and I think if we did that, then more people will just have their antennas up and join us in this quest because it is a worthwhile quest, and one that I think in a way is one of our defining challenges, like in the 21st century. We just have to do a massive upgrade of our organizational-esque, and we need all the help we can get.

Simone Cicero:
Right, right. And management innovation, I think it doesn’t even convey the massive challenges that we have to engage with, right, because it’s even more about entrepreneurship. And having skin in the game and hands on and so on. So, totally. So, Michele, maybe as a closing point, if you want to share with our listeners, what you’re up to, something that’s coming up, or how to engage with you and get in touch and maybe exchange ideas and in general engage with what you’re working on these days.

Michele Zanini:
Yeah, sure. I’m happy to report that. Soon we’ll be launching a set of interviews with a really cool set of thinkers and executives around how we humanize work and create organizations that are fit for the 21st century. Very much exploring the kinds of themes that we’ve tackled today and many others as well. And this will be up on our website, humanocracy.com I think it’ll be humanocracy.com/movement. But if you go to humanocracy.com, you’ll see the links. So, you’ll be able to see a set of interviews that I think will be really interesting to the audience. So, I encourage you to do that. You can also check me out on Twitter @MicheleZanini. So, M-I-C-H-E-L-E Z-A-N-I-N-I, at Michele Zanini. So, those are a couple of pointers.

Simone Cicero:
Thank you so much. I mean, it was a great chat. I’m sure I have to re-listen to that to come up with some more insights. I’m sure our listeners will enjoy. Michele, thank you so much for your time. It’s always a pleasure to have you on board. And Emanuele, thank you so much as well for your brilliant questions as always. And to our listeners, catch up soon.