We are experiencing what some would call a "Revolution."  Actually, what we are experiencing is an "Evolution" of extraordinary magnitude.  In order to understand were we are going, let's begin by taking a quick look at where we've been.

The first half of the 20th century was an absolute disaster in human affairs.  A cataclysm.  We had the first world war, the great depression, the second world war and the rise of the communist nation.  Each one of these forces tore the world apart at the seams.  We also threw up barriers to human affairs which include:

• Political Barriers
• Trade Barriers
• Transportation Barriers
• Communication Barriers

These barriers divided people and nations.

The second half of the 20th century, we began to shift.  Shift away from the first 50 years.  It started with trade barriers.  We began to globalize the planet.  Cooperation and coordination of effort was extended across national boundaries.  Next came transportation barriers.  Technology and a more open playing field created access to logistics that were previously not possible.  With the fall of the Berlin wall, political barriers have fallen thru the floor.

This leads us to now -- the 21st century.  For the first time in human history, growth has been extended to almost all regions of the world.  Take China for instance.  Since 1978, shortly after the death of Mao Zedong (1976), the growth rate of China has increased 10% year over year -- every year.  No where in history have so many people been lifted out of poverty.  India is another example with 6% growth per year since 1990.  The reason is that the barriers that kept these countries in poverty (access to markets & logistics) no longer exist.  This has created a localized economy on a global scale.

Communication Barriers Overcome

The web did not cause this epic shift in global human affairs.  But the importance of it cannot be overlooked.  What was once only possible for governments and large corporations (communicate, collaborate and coordinate globally) is now easily done at the individual level -- virtually free.  This has created an environment of what I like to call "global localization."  There are no barriers to sharing data, publishing data, building relationships and creating a global network to coordinate effort.  It is an environment that has, and will continue to, turn the balance of commerce on its head.

Is Business 3.o too cliche?

Whatever you want to call it, we are coming full circle.  In the beginning, we participated in commerce at the local level.  You did business with the people you knew.  Business was done on a relationship level.  Then along came the automobile and communication devices.  By the time the television came along, we were all exposed to mass advertising and mass manufacturing.  The whole notion of "brand" was to develop a relationship with a product where we once relied on relationships with individuals.  Well here we are in the "relationship age."  Where your ability to succeed has more to do with orchestrating effort thru your network or connections.  TV advertising, or advertising in general, is in a fluid state of disarray.  People want to do business with other people again -- not brands.  The big will get smaller and the small get bigger.  Say goodbye to institutional friction.  We will witness the rise of the individual.  We've come full circle folks!

A World Without Barriers

So why do we call it a "Flat World?"  The world is being referred as a flat world, thanks to Tom Friedman’s book The World Is Flat. The world is now so well connected with the ubiquity of technology in all areas which gives you, me, all of us the power to collaborate, coordinate, produce and distribute seamlessly across borders, and cultural and language divides. In a flat world, everything of value is now connected -- no more barriers.

Welcome To Our Flat World -- The Good News

For connected individuals and forward-thinking corporations who are able to embrace change, there has never been a time where we've had more opportunity.  There is little need for the organizational system as we once knew it.  The power to create a global network to collaborate and coordinate effort is seamless and typical organizational structure just gets in the way of productivity.  If organizations are able to recognize this and embrace this, there can be little doubt that operational efficiencies can be extended exponentially.

Welcome To Our Flat World -- The Bad News

In a flat world, there are connected individuals and disconnected individuals.  Unfortunately, this gap can only widen.  To date, there are about 1.2 billion connected individuals.  We are the conceptual and technical class.  Our opportunity holds no bounds.  However, for the disconnected individuals, there is a barrier being constructed.  Technology changes is changing so fast that it has the possibility to create another sad state of human affairs.  I am hopeful though.  With the ubiquity of technology, the speed at which it has spread in the last decade and the low cost of connectivity, I cannot image that we will not have a connected world -- one where knowledge is freely shared, data is relational and accessible and where the human spirit and innovation can come together to solve many of the world's problems (and, of course, create new ones).

So What's Next?

Who knows.  But, we are all on this ride together -- so let's make it happen together.  This is my blog.  It's about the new world of commerce, marketing and media.  It's about the drastic shift we are all experiencing.  It's about creativity, digital media, personal branding and social media.  It is about how to harness our power to create networks of individuals, engage and influence each other.  It's about embracing this flat world we all live in -- together.  I hope you'll be here with me for the ride.

Innovation refers to incremental, radical, and/or revolutionary change.  Change in thinking, products, processes, and/or institutions & organizations.   It's fueled by creative people on an unending journey to make things faster, smaller, cheaper, cleaner, simpler; people who put their heart and soul into their craft without regard.  Institutions or organizations are deliberately and intentionally created by people.  The development of functional institutions in society in general may be regarded as an instance of emergence; meaning, institutions arise, develop and function in a pattern of social self-organization, which goes beyond the conscious intentions of the individual humans involved.  It is the mechanical and traditional way effort is coordinated.

We live in exponential times.  Innovation grows in an exponential manner.  It's not linear.  We think and intuit in a linear fashion.  For example, if you walk 30 steps linearly (1,2,3.... 30) you've taken 30 steps.  If you take 30 steps exponentially (2,4 8 16.... ) you get to a billion.  Quite a difference, no?  So if we live in exponential times, what's the future hold for innovation as well as institutional organization?  Again, if we are to look ahead, we need to look to the past for some perspective.

Why Create An Institution?

How do we get anything done - traditionally speaking?  If you want to coordinate the work of a group of people, you start an institution.  You raise capital, develop resources in order to coordinate effort; basically, you start a company.  The company can be private or public.  So thinking of a company as an institution, you use the charter of this institution to coordinate the effort needed to create output.  What we are talking about are coordination costs.  As part of creating an institution in order to coordinate effort, part of that coordination costs includes the collaboration and innovation required to re-invent and stay relevant in your market.

Institutional Extinction?

We've seen the imploding of institutional imperatives coming to fruition for awhile.  I believe there is more to this than what this post is addressing (such as institutional anonymity leads to moral ambiguity).

Institutional failures are happening all around us.  In a nutshell, there is no faith in our government institutions, financial institutions, educational institutions or our corporate institutions.  The net outcome creates an environment ripe for solutions.  Small grass-roots solutions that have the ability to spread globally in seconds, take root in weeks and evolve tangentially into real organic solutions devoid of institutional friction or myopic disconnects.  There is also a pattern of indifference until it's too late which reminds me of a great quote:

"Every CEO will at least give lip service to the idea that the world is moving faster and that we need to do a better job at innovation. But if you go into an organization and ask people to describe their innovation system, you get blank looks.  They have none."
-- Gary Hamel

"Built To Last" Doesn't Mean What It Once Did

The problem with the traditional institutional model more relevant to this post is that it is outdated.  The fundamental requirement for innovation is communication.  Communication between the "creative people on an unending journey to make things faster, smaller, cheaper, cleaner, simpler."  Another problem is, this model is not well suited for the "people who put their heart and soul into their craft without regard."  There is institutional friction that is unavoidable and deflating to the best and the brightest.  Don't believe me?  Look at what's has been happening over the past 80 years.  You cannot help but notice the lifespan of an average institution is falling thru the floor.

This graph is powerful, no?  Notice how the market corrections are a big driver.  So why else do you think this is happening?  You agree that we live in exponential times, right?  Well if we live in exponential times, then the speed at which we need to adapt, relearn, change or in essence, Innovate, doubles every year or two.  Larger institutions, by their very nature, are incapable to respond.  Consider that in many cases that takes at least one or two years to recognize there is a problem to even begin to solve it.  By the time many of them solve it; well guess what.  They're stuck solving a problem that is now irrelevant and distracting them from solving the new issues at hand.

The Lack Of Institutional Effectiveness & Agility

What else has happened during this timeline?  Think about the methods and means at which we are able to communicate.  Telegraph, Telephone, Travel, Logistics, Radio, Television and now cram all of the affect of those communication tools into the internet and you have increased the effectiveness and cut the cost by almost a trillion.  There is "Flat World Coordination" that has real potential to allow smaller companies to better serve the larger's customer base at a fraction of the cost while adding more product and/or service value.  It's this "Flat World Orchestration" that is changing the competitive landscape for the larger institutions.

Are You Saying That Institutions As We Know Them Are Dead?

Successful ones as they traditionally operate?  Yes.  I am saying that in shorter and shorter lifespans become... dead (hence the above graph).  Traditional institutions will survive and thrive when management, board members and/or shareholders are able to step out of the "what we did yesterday will work for us tomorrow" mentality.  In order to survive for the longterm, one has to recognize that the things that got you where you are will not get you where you optimally should be.  I was asked by a mid-market CEO recently about what are the most important things to understand in order to adapt and compete.  I came up with 6 that I feel are undeniable and universal:

• Institutions Are Inherently Exclusionary - Solve This
• Your Best Ideas Aren't Necessarily Your Own - Accept This
• Innovation Is Now A Global Collaborative - Leverage This
• The Tools Of Innovation Are Ubiquitous - Believe This
• Combine The Best Talent And Tools Without Institutional Regard - Break Down Silos
• Your Best Agent Of Change Is Probably Already Working For You - Forget Consultants

Embrace This Paradigm And You Will Stumble On Bigger And Better Opportunities.  Plan, Do, Study, Act... Repeat.  So what else is happening in market corrections?

Small Will Be More Influential And More Plentiful

So stepping back a bit, what are the type of companies that are winning in this environment?  In 2 words, Small Business.  What to you think the net outcome of layoffs from the financial mess?  It will be more small business who are more capable to adapt and who will drive us out of our current situation.   Look in the troughs in the above graph that represent market corrections.  People are still working, more and more companies are being created.  Every correction leads to wider acceptance of newer innovations and knowledge that people take from their corporate institutional jobs they lost to their new ventures as business owners.  The other paradigm is the concept I put out as "The Rise Of The Individual In A Flat World."  There is a great book that will describe this phenomena better than I called Free Agent Nation: The Future of Working for Yourself.

There is a huge upswell of activity and opportunity for entrepreneurial groups and individuals who find themselves either inspired to and/or laid off and in a different predicament due to mass layoffs.  As history begins to repeat itself, this is the best time to find your niche and create now and competitive value.  Small business activity flourishes in economic downturns and it has every single time there has been one.  So if you are recently laid off or are worried you might be.  Start taking some bold actions toward finding what you can put your heart and soul into without regard.  Rest knowing that there is no better time to be an entrepreneur.  Small IS your competitive advantage.