From Creative Destruction to Intelligent Design: Antecedents and Normative Elements of an Agnostic Framework for Aspiring Transformational Firms

From Creative Destruction to Intelligent Design: Antecedents and Normative Elements of an Agnostic Framework for Aspiring Transformational Firms

Jonatan Jelen (Parsons The New School for Design, New York, NY, USA)
DOI: 10.4018/ijpmat.2014010102
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Abstract

When the late Steve Jobs prominently adopted Wayne Gretzky’s slogan wanting to “skate where the puck will go, not to where it has been”, it sounded simply as a pragmatic response to the limitations of chasing the elusive ‘environmental fit’ (for the notion of strategy as a fit with the environment, see Porter, 1996, 1998). Yet, it prefigured a truly paradigmatic leap. With information technology becoming the dominant technology of the day, firms are no longer confined to either being simply part of the problem, part of the solution or part of the landscape. They now can quickly capture and move the entire landscape; but even more importantly, they can become an entire landscape in their own right. Firms need no longer be mired in perpetual reform efforts, endlessly defining, designing, and developing themselves form the inside out as transactional systems, configuring dimensions of strategy, structure, scale, and scope hopelessly imperfectly given environmental turbulence, technological transience, and socio-politico-economic complexity, and perpetually, almost wastefully tuning their internal synergies to merely becoming incrementally agile and increasingly nimble. The commonality among the recently quickly emerging complex information technology-intensive firms that are breaking the mold, especially represented by the social-media movement, is their deliberate and explicit social positioning. These firms are demonstrating a level of creative intelligence that allows them to aspire to, design, and construct, in their entirety, the very environments into which they want to project themselves. To enable and to leverage this new transformational nature they cultivate and nurture two additional dimensions that define such social positioning: scheme and soul. Scheme represents their agenda for social stance, positioning, action, and change. And soul is their intentionality to go beyond economic rationality and business logic in order to create logos from chaos. But while people may have overcome the controversy of creating social outcomes with economic means, one now has the mandate to design and govern how one creates economic outcomes with social means.
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1. Introduction – Beyond “From Good To Great”

Notions of transience, transition, and transformation have been synonymous with the new economy. It is an experience economy (much past the previously prevalent service paradigm), it is a digital economy (possibly even post-digital already), and it is morphing at an increasing rate (where the sole continuity seems to be disruption). The present paper proposes that these characteristics are partly driven by three forces: (a) Complex Information Technology-Intensive (CITI) firms of the likes of Google, Facebook, Twitter, eBay, Craig’s List, i.e. the ones that represent social media and their ancillaries of hardware, software, and orgware; (b) the transformational impact of information technology on the character of these firms; (c) and their ability to in turn define, design, and deploy their proper environment within which they want to exist in their own right.

1.1. The Notion of the Complex Information Technology-Intensive Firm

While the pragmatism and the practical nature of previous industrial technologies masked the absence of an ontological anchor for the design of particular productive systems, the advent of information technology in its most recent incarnation makes any further oversight impossible. For now we are confronted with a new breed of digital-economy firms that do not simply use information and information technology as yet one more technology among all the others. Rather, these are “complex” systems, serving multiple constituencies at a time, for example. They exhibit community-based, social value-oriented, and network-centric models of organizational activity. Of an entirely new character, they do not merely represent a form of speciation or evolution out of previous business models. In order to configure and sustainably maintain such volatile and inherently unstable social networking models of social organization, a serious and sustained application of intentional and deliberate, intelligent design is required. This is especially true when—as is the case with these types of firms—the variables of strategy, structure, scale, scope, and social position have been radically deconstructed, reconfigured, and reconstructed in a truly Schumpeterian spirit of creative destruction (for a deeper discussion of the attributes and dimensions of complex information technology-intensive firms see Jelen & Kolakovic, 2010 a; 2010b; 2009).

In that, our perspective therefore diverges from previous treatments of the subject. Most of the business literature concerned with information technology since the mid-1990s deals with the pragmatic impact of information technology on organizational design, being primarily concerned with epistemological problems and transactional aspects. On one hand, the literature focuses on structuration issues, on harnessing the potential of information technology through optimization, and on the impact of information technology on firms’ activities, decision-making processes and management effectiveness (see, e.g. Brynjolfsson & Hitt, 1997; Brynjolfsson et al., 1994) while on the other, it focuses on the necessary attributes for functioning under the new environmental conditions brought about by information technology (see Huber, 2003). Our concern, however, is “ontological,” in that we wish to explore the very reason for existence of such firms, their new nature, and their fundamentally redefined character as productive elements of the economic complex. Indeed, these firms have been designed sui generis, ex nihilo, ex ante, and de novo, the design variables of strategy, structure, scale, scope and social position revealing entirely new meanings, and requiring entirely new understandings of the potential role of the firm in the 21st century. In the new landscape, “strategy” is no longer competitive but cooperative; “structure” is no longer bureaucratic-hierarchical but network-flat; “scope” is no longer driven by transaction cost, but by transaction profits; “size” is no longer a quantified measure, but a qualitative result of dominance; finally, the “social position” of the firm is no longer “across the table” from its users, consumers, and clients, resulting in zero-sum negotiation, but instead implicates them as partners in a collaborative process of co-producing and co-generating the products, experiences, and contents comprising the firm’s business offerings. However, the resulting new business models of social networks, transmutability and community models have not evolved spontaneously and organically (see, e.g., R. Y. Arakji & K.-R. Lang, 2007; J. Hughes & K.-R. Lang, 2006).

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