It’s time for a new operating model: One that anticipates and responds to the growing needs of the full ecosystem of people and keeps the organization connected in real-time. From the workforce, to customers, to suppliers and beyond, there is an opportunity to build an intelligent and fluid model, putting the precious resource of humans at the heart of the future equation.
Most companies react to these increasing demands by embarking on efforts to deploy myriad technology advances and data-driven strategies, only to find their operating model and hierarchical organizational structures are not prepared to adapt to real-time decision-making or provide aligned incentives as these transformations are undertaken. As a result, most efforts struggle with issues around people — such as empowerment and skills alignment — structure, governance and ultimately the ability to realize the potential value of these technological innovations.
There is no question that there are real opportunities to make smarter decisions and create value with the help of cutting-edge technologies. But most businesses, afraid to let go of familiar processes and structures, aren’t even coming close to capitalizing on that promise. To get there, they need a much more dynamic, adaptive approach — they need a “superfluid” model. They must break with linear workflows that inhibit connectivity within and beyond the organization, engage with digital tools and data much more holistically, and take full advantage of disruptive tools such as generative AI (GenAI) and Web3 to deconstruct and rebuild their operations. For example, the shift to utilizing AI to run sizable portions of the enterprise can be a critical enabler in adopting the mindset and approach of a superfluid model.
Most companies are still organized around hierarchical, nested taxonomies of ledgers, P&Ls, and org charts. Although they sometimes have the added complexity of matrices, with crisscrossing lines of reporting and accountability, they are fundamentally siloed (for example, by function, geography or division). As a result, assets such as talent, capital, time and ideas get trapped between organizational boundaries. Often, a great idea languishes in one area because the budget, expertise or other resources needed to make it happen sit in another. Such assets are also confined by traditional time and hierarchy constraints. Within each silo, most big decisions are made by senior folks on set time frames — quarterly or annual cycles, for example — and opportunities tend to go unexplored in between.
Superfluid organizations solve those problems by connecting resources and ideas across boundaries to drive decentralized decision-making and even execution. People on the ground can create value as they see opportunities to do so.
So how can a business become superfluid? What does that look like, and how must leadership roles and activities change to make superfluidity a reality?
What makes a company superfluid?
In the world of physics, the term “superfluidity” refers to exotic liquids that defy constraint, flowing without friction — even uphill. Superfluidity can be used to describe enterprises that defy established laws of organization, management and economics: Superfluid enterprises reduce operational friction to a fraction of what you’ll find in organizations with static, hierarchical models. What sets them apart is their use of emerging technologies and decentralized structures to connect internal and external supply and demand much more quickly in a rapidly changing world.
For businesses that embrace superfluidity, GenAI will undoubtedly play a huge role because it offers “speed to insight” and potential productivity gains by enabling different types (internal and external) and modes (e.g., text, images, audio, video) of data from multiple sources to be readily combined and accessed by large language models (GPT-4, Midjourney and whatever comes next). The resulting organizational and operating model changes will not be incremental; they’ll represent a major shift in how businesses derive value from AI. Web3 will play a critical role, reducing friction in operations by increasing trust and automating complex transactions. This set of decentralized technologies and structures mostly functions on a blockchain, securing each transaction by distributing the underlying validation. By building “on chain,” Web3 concepts such as Decentralized Autonomous Organizations (DAOs), enable disparate groups and individual “contractors” to coordinate — with no hierarchical oversight — to self-govern, self-manage and share value. Smart contracts, also in the Web3 mix, allow terms to automatically travel with transactions, so they can be executed precisely as intended wherever they may happen.
These are just several emerging capabilities that support superfluidity. As technologies continue to proliferate and develop, they will provide new ways of reducing operational friction.