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The outbreak of the black swan incident has forced us to rethink the company’s boundaries and organizational form.

In the epidemic, telecommuting has become the new normal. Many founders and CEOs started thinking: “Do I need to spend a lot of money to rent office space?” “Do I need it, and how many full-time employees do I need?” “Is it reasonable to pay wages on time?” … Behind these thoughts, there is a common underlying logic-“ The dusk of the company system “.

This article is an excerpt from the latest book “The Twilight of the Corporate System” by Gong Yue, Professor of Entrepreneurship Management Practice at CEIBS and Director of CEIBS Entrepreneurship / Venture Camp.

If we consider the company system as a set of operating systems, after decades of “patching”, this set of operating systems has entered a period of “depletion of mountains and rivers”, especially in the black swan incident now. In China, the “standard actions” that we take for granted may be redundant, which requires us to rethink the boundaries and organizational forms of the company.

One, corporate dusk

From 1769 to the present, despite the fundamental changes in the dynamics and technological form of the company since its inception, the organizational form of the company has not changed much.

Image source: CEIBS Startup Camp

1. Internal Incentives

Many entrepreneurs may have the same experience.

Three people start a business together and make a judgment on the future. For example, my future contribution to the company is 70%, and the two of you will contribute 15% to the company in the future. So our final equity structure is: I am 70%. , You two each account for 15%.

But is there uncertainty and risk in this judgment process? Is there a possibility of misjudgment of one’s own ability and that of others? This kind of structural constraints will make us lack a certain degree of openness, and can only make minor adjustments, but cannot make revolutionary changes.

So it ’s easy for startups to encounter twoThis kind of dilemma is the partner’s dilemma, that is, there is a mismatch between the judgment of ability and the corresponding equity incentive. The second is the continuing entrepreneurial dilemma, that is, the founder team and the subsequent joining teams are also mismatched in capabilities.

2. External incentives

How do you motivate users? The traditional incentive method is mainly a points system. For example, an airline is a classic point system. If you collect 10,000 points, you can redeem a mug. Of course, points are valuable in themselves, but there are also the most fundamental flaws, that is, you cannot get the growth premium of this company, and ultimately the growth of this company has nothing to do with you. Therefore, the essence of the integral system is a kind of stock thinking. All points are for the past.

3. How to break the incentive bottleneck?

In terms of internal incentives, the future incentives will change from centralized to distributed, from discontinuous to timely, from imprecise to precise, and from opaque to transparent. In a sense, it is the combination of gamification, intelligence, and digitization into the existing company system, which ultimately forms the entire incentive atomization. I think this will be the big development direction of the whole incentive model in the future.

In terms of external incentives, future incentives will transition from traditional discounts, points, and rebates to value sharing. In other words, the relationship between shareholders, users and employees will change from the original trilateral game to a trinity. Your users may become your shareholders or your unpaid employees. The user is no longer satisfied with the stock value (such as points) given to him by the company, but instead wants to share the future increase of the company.

Second, the power of the times and the thinking of tomorrow

There is a theory in entrepreneurship called “cognitive tunneling”. The implication is that human cognition is like a tunnel, and everyone tries to build their own world, but in their own tunnel, what you see is often just what you want to see.

There are many factors that determine the cognitive tunnel, including your personal experience, academic background, etc. However, these factors are largely dependent on your path. The so-called path dependence means that your past experience can largely explain your behavior today, and your behavior today can largely explain your behavior tomorrow.

Path dependence is ubiquitous. Each of us lives in path dependence without knowing it. It is even difficult to get rid of its cognition.

How to break path dependence? I offer you some ideas from two perspectives. The first angle is an outward-looking angle: All success is inseparable from an outward-looking angle, that is, “the power of the times.”

The other perspective is an introverted perspective: the success of all companies can not be separated from an introverted motivation, that is, the founder itself, your team, your “tomorrow thinking”, that is, standing on tomorrowConsider the innovation of today, and consider how to abstract the current innovation pattern from the perspective of the future. This involves two fundamental abilities: the ability to abstract thinking and the ability to conceptualize the future.

In the uncertain future, entrepreneurs must have the ability to abstract and conceptualize the current competitive landscape from a future perspective. I found that the level of many entrepreneurial differences does not depend on the specific level of execution, but on the ability to think abstractly and conceptualize the future.

1. Times Power

What happened in this era? Here is a set of big data (shown below). The sample of this set of data is all listed companies in the United States. The span of this data is also very large. From 1950 to 2014, the data spanning 64 years basically covered the entire business history after World War II.

Graph source: Prof. Gong Yue

We have divided all listed companies in the United States into two benchmarking groups. The first benchmarking group is the 25% of the companies that perform best among all listed companies. Is the profit margin before interest and taxes).

What is the rule of the best 25% of all listed companies? In fact, when they started, their development was relatively flat, fluctuating around 20%, and then they continued to rise. Even the financial crisis did not stop them from rising, and they have now exceeded 30%.

We divided the picture into three sections, from 1950 to 1985, 35 years of calm. We found that although there is a gap between the 25% head and 25% tail lines, it is stable. From 1985 to 1995 was the transition period, the bottom 25% was basically no profit.

After 1995, the “scissor mouth” began to appear, and the gap between the two lines widened rapidly. Today, there is no tendency to shrink. This is a very classic “Matthew Effect.” The weaker are weaker.

Why the Matthew effect? What is the driving force behind this phenomenon?

In the first 35 years, what kind of company was at the center of the stage? It is manufacturing, energy, infrastructure, etc. We collectively call such enterprisesAs a prediction, we can draw the following four fundamental inferences.

Corollary 1: From M2C to C2M

When users have more and more pricing power, the M2C model will become the C2M model, customization will move from the edge to the mainstream, and customization will move from the niche to the public.

Inference 2: Data is “decentralized”

Today, many centralized Internet companies such as Tencent, Google, and Facebook, their underlying logic is to aggregate, clean, and package user data, and then commercialize it. However, when users have more and more power, users will declare ownership of their data and no longer let the Internet companies use it at will.

Inference three: “Trilateral game” to “Trinity”

When users are given more power, users not only need you to provide good products and services, but also need to obtain part of the profits of the company, in a sense they will become shareholders of the company. It is even possible for users to become employees of companies that do not pay. The boundaries between the three sides will become more and more blurred, and the three sides will overlap more and more.

Corollary 4: Matthew effect intensifies, giving play to the fission effect of users

The Matthew effect will have a serious impact on the entire society, including the individual level. The Matthew effect at the enterprise level will eventually be transmitted to two levels, the macro level will be transmitted to the social level, and the micro level will be transmitted to the personal level, resulting in the entire The stratification of the whole society, the disparity between the rich and the poor.

How do companies deal with the impact of the Matthew effect? It is necessary to return to the user itself, exert the fission effect of the user, and let the outstanding user fission huge energy like the atom in the atomic fission reaction.

Now there are many fission modes, such as the introduction of Uber in the early days, using content to perform fission; Xiaohongshu uses sharing to perform fission; Pinduoduo uses group purchase to fission; and other modes such as gathering, funny headlines.

The essence of tomorrow’s thinking is to redefine. So, how to develop tomorrow’s thinking?

First, repositioning is essentially future-oriented competition. Therefore, we must truly realize the transformation and innovation, and focus on the future. Secondly, today’s business competition environment is in a more complex, uncertain and fuzzy era (VUCA era). How to develop tomorrow’s thinking depends on how the founder or founding team can extract effective signals in high grayscale and high noise. .

The most important thing is to develop your own abstract thinking skills. If your competition focuses on the future competitive landscape, then you need a grand narrative theme and the ability to conceptualize, abstract, and disseminate it. This ability is also called storytelling..

Storytelling is a very important ability in the field of entrepreneurship. Storytelling is based on your judgment of the future competitive landscape, effectively abstracting and refining a concept based on the future competitive landscape, and at the same time effectively spreading this concept to your stakeholders. This ability is often a core bottleneck for many entrepreneurs today.

Three, conclusion

Today, the centralized company system and its logic with contracts and incentives as the bottom layer deviate from my current era and technical background in many ways. We can interpret this deviation in two different ways. The first thinking is “patch logic.” This thinking is based on the existing basis, and once a loophole is found, it is patched. In other words, the original operating system is effective, and the original operating system is constantly improved. Another logic is to create a new operating system.

What will happen in the end? It is difficult to judge today. I personally lean towards the latter thinking. I think that the corporate system has gone through decades of “patching”. Today, it has basically reached the end of the mountain. Maybe the times call for a new operating system. This operating system may still be very Naive, this operating system may be rough compared to the original system, but it may represent the direction required by the next era.