One of the great promises of the Internet is that it is going to revolutionize the nature of work, and allow for all sorts of remote collaboration. And with edge innovation, i.e. externally aware innovation, being all the rage, it begs the question: is the office even needed? Is the corporation even needed?


Brighter minds than mine (like John Hagel and John Seely Brown) have cast the notion aside (check their fantastic book Outside the Box), saying that the firm is still needed for learning reasons -- to help share and diffuse project-specific knowledge. I think most people think it's hard to build the kind of trust you need to get a real project going online. I do think that's the biggest issue.

I'm not 100% sure what I believe at this point, although I know I want to give a real shot at a creating free agent nation -- the totally virtualized organization, something more akin to an open source production community than a typical corporation. Here are some random thoughts along those lines:

1. Wikipedia, Ron Paul, 9/11 Truth. Three very powerful, passionate communities that can be thought of as virtualized corporations; they are teams united towards a single cause, but the hierarchy is pretty flat. So, I think it can be done. It is worth noting that Wikipedia and the Ron Paul Revolution are somewhat centralized; 9/11 Truth is almost totally decentralized; the hierarchy comes in the form of what key influencers say (influencers are popular media producers). In either event, it is clear that a higher cause -- a truly compelling mission statement -- is needed to create these types of horizontal, free agent ecosystems.

2. Look Outside First. Externally aware innovation and the edge owning the core are two concepts I feel are critical to understanding how a free agent ecosystem can be built to maximize profit opportunities for all. A more blunt way of saying it might be to start by finding what you can do with the stuff that is already out there -- already being published on the Internet, that you can pull into your project (RSS, open source software, APIs).

3. Technology Must Eliminate the Need for Unskilled Labor. I think there is a big connection between physical assets -- assets that have a marginal cost -- and the ability of the firm to wholly virtualize itself.

4. Government. A government is needed to manage shared assets and to establish standards that all businesses in the virtualized enterprise adhere to.

I also think in most virtualized organizations, profit allocation systems will reflect the values of the constituents. For instance, design-centric virtualized organizations may reward designers more than other forms of skilled labor. This ties into what I feel is a big part of what's important on the web: values; the psychological ideals that people want, be it the cleanliness and organization of Facebook or the unpredictable self-expression of MySpace. This ties into how the notion of how businesses compete will radically change. Perception is more important than reality in the virtual world.

It could be a wonderful reality. Just make sure you choose the right one.