The Mesh Model

So if you have been following this week I’ve discussed the new problem in business plaguing creative employees. As a result of this new problem creative employees are creating a new business paradigm by forgoing traditional employment and focusing more on independent work. This obviously has a big impact on business today and I would like to finish this series exploring that impact.

History Repeats

First off this is not the first time this sort of creative exodus has happened. As @pstrack pointed out yesterday in the comments his current business was a result of a similar movement. Us creative people tend to periodically throw a fit together and create movements. This has happened several times throughout history and this is nothing completely unique. History in business as well as everything else has a tendency to repeat itself. Such is the case here.

What was old is new

While this is a bit of a reoccurring theme and can quickly be dismissed as the same old movement, there is something different about this one. People are extremely connected, more so than ever before. In this new flat world it is essential to include this factor because it is very significant. Before when people left a business to go alone they would work hard, hire people under them, and eventually create a new small business of their own.

The mesh model

Connectivity changes everything. Now instead of having to go and hire employees, which is the biggest business risk of all, people can form connections with other people who possess the talents they need. I am going to step out on a limb here and suggest we could see a whole new business model arise from this new paradigm.

I call it the mesh business model. You suddenly have an abundance of highly connected independent workers who can form very loose alliances with each other. The business structure becomes very horizontal with each person operating independently while at the same time supporting each other. In this structure it is in everyone’s best interest to do the best job possible because they themselves are essentially the owner responsible for their independent company.

The vertical

The basic problem is vertical companies are dying and fast. In a vertical company the Peter Principle takes place often. You see people rise in a company until they are no longer competent for their position and that is where they stay. This is an old business model that cannot continue to survive in an increasingly creative business world.

In the vertical workers are motivated by respect and pay. Often respect is either not given because of a boss’s inability to understand the necessity of respect, or because the boss does not understand the contribution of the worker.

This leaves pay as the typical motivator. Pay is a business risk, companies hold out on paying more until it is more risky not to pay. In a good economy you worry about an employee leaving so to retain them you pay the more. As I showed in the first blog of this series companies have the upper hand and therefore do not have to continue to pay to retain. In fact the average company has decreased their pay to creative workers over the past 2 years.

The new business

So what does this mean for businesses moving forward? Actually I believe this will be a positive step for businesses that can embrace the change. Companies can lower their overall operational cost by contracting with creative individuals rather than having them on staff. They also are able to get higher quality work by utilizing people with specific talents required by the job.

For creative individuals this means having the ability to take control of your own success. You become paid and reworded based on the quality and frequency of the work. This improves overall worker moral, which also increases quality of work.

Overall for business I think this model combined with the changes in insurance coverage going on is going to lead to a shrinking workforce for companies. Inside companies structure becomes more horizontal. The factory style organizational structure becomes less viable and companies holding on to this structure will quickly lose their market share to companies tapping into a mesh business model.

Thanks for checking out this blog series. I hope to explore a mesh business model more in the future. Please let me know what you thoughts are and I will be sure to incorporate it into future post.

Posted in Strategy

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