What characterises the present? Is it fragmentation, or is it the opposite, the rise of the all-encompassing?
For a long time now, stretching well back into the latter decades of the 20th Century, there has been fragmentation, sometimes expressed as an imperative for ‘leanness’. Companies, organisations, and, increasingly, the state, have asked the question “what is it that we are here to do?”, and then divested themselves of all those elements of the business that isn’t what they do. Thus, for example, Marks and Spencer, which built and owned a lot of distinctive looking stores on the nation’s high streets, sold off their ‘property portfolio’, severed long-standing ties with the factories which manufactured their goods in Britain, and got on with the core business of flogging us knickers and ready-meals.
In the public sector this process was ‘outsourcing’. Perhaps, the thinking went, the state needs to ensure that frail elderly people who need help can get it. But do local councils need to build, run and staff care homes, or day centres, or employ ‘home helps’? Surely others can do those things, and councils can simply pay the bill?
It’s a mindset as much as a way of running businesses or services. When M&S sold off their property, they got a load of cash. But in return they now pay high rents on buildings they once owned. Perhaps that makes sense for their business. But when care home provider, Southern Cross, did the same thing, selling off its property and leasing back the homes, it was a financial disaster, locking them into uneconomic contracts and without ownership of core assets which might once have provided a cushion in lean times.
There are many other problems inherent in the notion of each enterprise being stripped down to its core functions, not least workers rights and the quality of services, but that’s not primarily the issue here. For what of the trend to go in the opposite direction? To amass functions, to do it all?
Google and Amazon. One starts as a search engine, the other as a means of selling books. Both are now giants bestriding the earth, mapping the earth, sending out driverless cars and delivery drones, crushing competition, amassing riches on a scale unseen in history.
In Dave Eggar’s dystopian novel The Circle, the vision of a company something like Google is of an outwardly benign monster enforcing conformity, stamping on individualism, privacy and freedom. Monopolies and monoliths do indeed have their dangers.
But, for now at least, what if we can draw other conclusions from the rise of tech-based ‘total mission’ companies, which, far from concentrating on their ‘core activities’, give the green light to talents within their ranks to run with their ideas, to take risks, to back long-term development of projects, some of them huge and audacious? Are they a different model of development which calls into question the lean, fragmented,’core focussed’ enterprise?
We can perhaps answer that question better by looking at precursors of these new global giants.
Organised religion, the military and universities invented the Google model before tech companies even existed. Indeed, the military and the universities were the original inventors and developers of the internet (and indeed, of space programmes). Large, multi-function, diverse, but disciplined entities can be anything but the shambling, inefficient organisations that management consultant-speak and market economics likes to suggest. They can be powerful and dynamic innovators.
Take one that is under more threat now than at any time in its ninety year history – the BBC. When left to its own devices and permitted to grow, to branch out, to try new things, the BBC has been phenomenally successful. The only major media group with a presence across the whole country, not merely in the capital, it has grown technical and creative talent for generations, given space for ideas to grow, and it has done so with a clear public service ethic. From the earliest days of radio, to the innovations it has led with its online presence and developments like the iPlayer, the BBC model plainly works. If there are too many layers of management, and a certain timidity of leadership, blame this on the unrelenting pressure brought by its commercial and political enemies. For all that, the model is a proven success, constantly innovating across almost a century.
What we are led to believe is “common sense” in economics, politics, life – lean, mean, narrow, selfish, competitive, ‘disciplined’, ‘realistic’ – is probably nonsense, the passing fashion of the late 20th century. Innovation, dynamism, and audacity require scale, co-operation, and the blurring or removal of boundaries. the 21st Century needs us to ditch the mantras of “private sector good/public sector bad”, of competition as the only spur, of short-termism and low aspirations for the public good. We can’t live well in this century if we cling to the old ways – like our government and its cheerleaders.