Tuesday, June 28, 2011

What would a virtual company look like? #1: the crowdsourced company

In recent months I’ve been intrigued by the concept of a ‘virtual company’. How would this look like? The concept sounds –and probably is, by definition- relatively abstract to me, although in many ways I am experiencing some of the consequences of this trend within my current working environment.

Anyhow, as always I can only sort my thoughts out if I make a mental picture of them, so I started figuring out what a ‘virtual company’ would actually look like. What I found was that this ‘virtualization’ might take many forms. The ultimate picture is probably a mix of all these. But let’s do this step by step.

A first step would be a company that crowdsources a maximum of internal activities. Everybody is acquainted with outsourcing production and support functions. Nothing new here. But what happens if the ‘anonymous mass’ becomes an extension of your company’s activities?

Let’s take a typical small and medium sized company of 25 people. A typical division of activities would look like the picture on the left, where the size of each division indicates the number of people in it.

The same company might leverage part of its sales activities to the crowd –a bit like with the affiliate program of Amazon, for instance. The Marketing, PR and R&D functions would be merged and lead by a specialist in crowdsourcing and (for the PR function) social media. IT could be done on the Cloud, at least for the software part. And finally, much of the pure administrative activities could be handed over to a micro-tasking agency.

Our new structure looks much lighter now, certainly in terms of overhead cost. Additionally, we reduced the risk of a brain drain considerably (with 25 people in the organization, it becomes dramatic if key skills come to leave the company). On the negative side, the new virtualized company probably adds complexity and makes the structure –and the responsibilities tied to each task- a bit less transparent.

Everything has its pro’s and con’s, though I suspect the new structure would prove to be more profitable at the end…

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