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The Protean Corporation

July 6, 2009


Michael Shawn Malone is a man of many talents. He has been an author, columnist, editor, investor, business-man, and television host. He is also considered one of the world’s the first high tech reporters. His beat was Silicon Valley. His latest book is entitled The Future Arrived Yesterday: The Rise of the Protean Corporation and What It Means for You. Malone says he wrote the book after looking at his resume and realizing that many of the companies he worked for no longer exist. He began wondering what a company had to do to survive in an era increasingly defined by rapid change. Senior BusinessWeek writer Spencer Ante has written a review of Malone’s new book [“Change is Good–So Get Used to It,” 22 June 2009 print issue]. Ante believes that Malone’s look into the future should be taken seriously because Malone has a history of getting things right.

“In books such as 1993’s The Virtual Corporation, Malone boldly–and presciently–described how technology would reshape corporate reality. In his 2007 book, Bill & Dave: How Hewlett and Packard Built the World’s Greatest Company, he reached into the past to chronicle the Valley’s first startup. When he became one of the first reporters to cover technology as a beat, back in 1980 for the San Jose Mercury News, Michael S. Malone made telling the story of Silicon Valley his raison d’etre. Now, with The Future Arrived Yesterday: The Rise of the Protean Corporation and What It Means for You, Malone has his forecaster hat back on and another game-changing theory. And because his past predictions about the impact of digital technologies were so often on the mark, many people really do want to know what he’s been noodling over.”

From the title, we know that Malone is going to write about change. “Protean” means readily taking on varied shapes, forms, or meanings. We can also surmise that Malone believes that only companies that can change with the times will survive. Ante continues:

“The central idea here is both simple and powerful: The global economy has entered a new era, and a mercurial corporate form Malone calls the Protean Corporation will become the dominant species by the middle of the next decade. ‘These Protean Corporations,’ he writes, ‘will behave like perpetual entrepreneurial startups, continuously changing their form, direction, even their identity. They will be true corporate shape-shifters.’ This notion may not come as a shock, but the huge repercussions Malone envisions just might.”

The notion certainly doesn’t surprise me. My company, Enterra Solutions®, is something of a shape-shifter itself. I began the company as an enterprise that would focus on automating business processes (something that it still does) but the company also morphed into one that deals heavily in helping emerging market countries promote sustainable development. Malone, however, seems just as concerned about what must remain permanent about a company as he is about what should change. Ante continues:

“The big challenge will be finding a way to protect the core DNA of a company as it reinvents itself over a time frame of months rather than once a generation or decade. Workers will need to be more adaptable than ever. ‘The company that employs you for the next 20 years may radically change a dozen times, and you will have to find your place in each of those reincarnations,’ writes Malone.”

From what I gather, Malone doesn’t believe that most workers will adapt. He thinks that every company has (or will have) a core group of employees that defines the company (even through its many transformations) and that an ever-changing cloud of transitory employees will surround them as the company changes over time. As Ante explains, Malone believes that companies will either change or they will die.

“Corporations that fail to figure out how to couple permanence with perpetual change will be ‘swept away,’ [Malone] says. Although it’s a grandiose theory, Malone presents a strong and timely case that business is entering a phase of creative destruction where nothing can be taken for granted and change is the only constant.”

Of course, there is nothing new about the notion that change is the only constant in either business or life. The Greek philosopher Heraclitus (540 BC-480 BC) wrote, “Nothing endures but change.” What seems to be new about Malone’s thinking is that successful corporations will organize themselves in such a way that creative destruction happens from within rather than being imposed by outside forces. Imposed creative destruction means that a company probably won’t survive. Ante explains that several factors have created the conditions that make internal creative destruction a modern necessity. First, as companies become more virtual there is less structural framework to hold companies together. As Ante writes, “‘Ever-greater virtualization’ is eating away at organizational structures and replacing them with ‘networks of free agents.'” Secondly, younger employees seem to be possessed with a greater spirit of entrepreneurism than older generations. This “entrepreneurial mindset of today’s twenty-somethings will serve as a ‘catalyst for radical change.'” Malone calls these people “intrapreneurs.”

“Malone says these ‘intrapreneurs’ must be supported and given freedom, funding, technical resources, and a stake, much like a startup with venture capital. ‘Companies of the future must not only support fully the creation of new entrepreneurial enterprises within their corporate operations and do whatever it takes to make the company’s work environment conducive to startups, but even take the next step of basing their corporate strategy on the presence of these internal startups.’ It’s an idea so audacious that–in a sped-up, hypercompetitive future–it just might work.”

One business leader who seems to agree with Malone is Anne Mulcahy, chairwoman and chief executive of the Xerox Corporation [“The Keeper of That Tapping Pen,” by Adam Bryant, New York Times, 21 March 2009]. Bryant asked Ms. Mulcahy if she looks for specific characteristics in new employees that she might not have looked for in years past. She answered:

“Adaptability and flexibility. One of the things that is mind-boggling right now is how much we have to change all the time. For anybody who’s into comfort and structure, it gets harder and harder to feel satisfied in the company. It’s almost like you have to embrace a lot of ambiguity and be adaptable and not get into the rigidness or expectation-setting that I think there used to be 10 years ago, when you could kind of plot it out and define where you were going to go. I think it’s a lot more fluid right now. It has to be. The people who really do the best are those who actually sense it, enjoy it almost, that lack of definition around their roles and what they can contribute.”

On that point, I believe Malone and Mulcahy agree completely. I don’t think that Mulcahy would have any difficulty describing Xerox as a protean corporation. I agree with King Whitney, Jr., who wrote, “Change has a considerable psychological impact on the human mind. To the fearful it is threatening because it means that things may get worse. To the hopeful it is encouraging because things may get better. To the confident it is inspiring because the challenge exists to make things better.” Protean companies are confident companies as well as hopeful ones.

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