Size is Not a Strategy

"People," they argue, "have changed more than the commercial organizations upon which they depend. And here is the new opportunity: In that chasm that now separates individuals and organizations lies the key to a new economic order with vast opportunities for wealth creation and individual fulfillment." We have arrived, Zuboff and Maxmin believe, at a "transaction crisis." Managerial capitalism succeeded spectacularly in turning us into a nation of individuals. "It has created a new world," Zuboff says. "We have more stuff and more access to experiences. But it's having all of those things that has turned us into people who think of ourselves as individuals and who want more control."

At the same time, most big companies are focused inward. Their resources are directed toward producing goods and services and bringing them to market and on preserving their own structures and machinery. "Organizations have . . . become increasingly remote and indifferent," Zuboff and Maxmin argue. The result: "Individuals want something that modern organizations cannot give them: tangible support in leading the lives they choose."

But what if the relationship between corporation and individual were inverted? What if economic value was centered not in the goods that a business sold but in the consumers who bought those products? What if companies could realize that value only through relationships rooted in deep support?

Those principles are at the core of Zuboff and Maxmin's distributed capitalism. In this new logic, says Maxmin, "the individual is the unit of analysis. Value already exists, and it resides with individuals. And if that's where value sits, then all of the old systems and structures are no longer relevant."

The new competitors are "federated support networks," dynamic and fluid organizations that provide consumers with varying levels of deep support, along with unique aggregations of products and services. Deep support means that federations assume total responsibility and accountability for the consumption experience. It is, in fact, the new metaproduct; relationships are merely occasions of deep support.

Consider the members of the Acero family, Zuboff and Maxmin's prototypical consumers of the future. The Aceros use several federations. One fairly basic, low-cost federation automates the Aceros' routine purchases and payments. Another supports more complex needs by providing a dedicated consumption advocate. When the Aceros travel, the advocate tracks their care during the journey and monitors home oversight, communications, and cash-flow management -- according to instructions from the family.

When the Aceros want to buy a new computer, a federation directs them to Web pages that provide advice and product information. With that data, the family completes a "needs analyzer," which the federation uses to offer three alternative packages. The Aceros select one, and the federation takes responsibility for the computer's delivery, any troubleshooting, and ongoing education.

Does this sound just a tad fanciful? Perhaps. But it's not difficult to imagine a Wal-Mart federation that would apply its purchasing and logistical skills to a consortium of suppliers. Maxmin argues that home-delivery pioneers such as Webvan and Kozmo, despite their unhappy fates, "had a tiny glimpse of this. They saw that you can give people back their discretionary time." What they lacked was the enterprise logic to make it happen. Deep support isn't viable without that logic.

The costs of running the basic functions replicated in every company -- accounting, legal, payroll, logistics, and the like -- typically chew up 25% of revenue. Under the logic of distributed capitalism, the replication of those functions would be eliminated as they migrate to a ubiquitous digital platform. The platform would capture all transactions and other relevant data while integrating processes and functions across enterprises and federations. Critically, no player in a federation would get paid until the end consumer paid -- and all accounting would be rooted in cash, to reflect the consumer's preeminence.

It's a long way off, of course. The support economy, like Downes's strategy machine and Hamel's post-industrial organization, implies bold leaps. But it will also require some dramatic technological, economic, and societal advances. Exactly how might we construct the federations' massive digital backbones? How will we convince executives that information assets, unlike physical assets, are more powerful when shared? How do we measure innovation in big organizations? How do we value ideas?

Hamel, Downes, and Zuboff and Maxmin admit that they can't fill in all of the blanks. And while that is frustrating, such half-baked vagueness makes their visions all the more powerful. Because ultimately, filling in the blanks is up to all of us. "What we're talking about," says Zuboff, "is social invention. That sort of invention comes from social movement. It comes from different people coming into the ring, knocking heads, imagining, and experimenting. And that's the good part."

Keith H. Hammonds (khammonds@fastcompany.com) is a Fast Company senior editor based in New York.