What do atoms do ?
Where will atoms come from ?
What are the six atom types ?

Smart Companies
Webspinners
Customer Managers
Asset Platforms
Service Platforms
Portfolio Owners

What do atoms do ?

Business success in the future will come from excelling in just one of the following four dimensions. Our atomic theory evolves directly from this fundamental assertion and identifies six types of individual atomic entities:

• Innovation: the engines of the economy will be small, knowledge-intensive 'smart companies' that create a constant stream of innovative new offerings - combining bundles of products and services, and deriving value from their know-how and peer-to-peer interactions

• Relationships: we foresee two types of atom emerging here - 'customer managers' will understand the desires of consumers, while 'webspinners' will mediate the relationship between the supplier and the customer at each stage in the supply chain, or emerging value webs. Together they will assemble the goods and services required to meet each customer's individual demand.

• Assets: someone still has to manufacture detergents and refine the oil. 'Asset platforms' will deliver global economies of scope and scale in areas such as manufacturing and logistics, while 'service platforms' will manage process-related activities like human relations, procurement and finance across a variety of sectors

• Capital: shareholders will reap the rewards from the unlocking of relational capital as giant corporations are transformed into 'portfolio owners', holding equity in the atomic companies they have spawned.

Atoms and supporting electronic marketplaces may be individually small and incomplete, but the full power of our theory is that they can combine into systems, or molecules, that are powerful, fast and immensely flexible, and still manage to completely meet customer expectations.

Where will atoms come from ?

The book will tell you exactly how to find atoms hidden in your corporation, how to value these corporations, and how to launch them successfully. While some of the atoms will be new entities, particularly the relationship-based 'customer managers' and 'webspinners', most will be spun off from today's large corporations. Think of a corporation as an apple sliced into layers :

• The governance layer of the corporation corresponds to the board and perhaps their immediate reports. We see this as becoming a 'portfolio owner' atom, acting as the means by which released relational capital is returned to investors.
  
  
• Specific business elements are the core processes that differentiate our corporation from its peers, in terms of intellectual property, design and process knowledge. This layer of the corporation will create the 'smart companies, 'customer managers' and 'webspinners'.
  
  
• The generic business elements which make up the majority of the corporation's processes and which are "just part of how we do business" will be externalized either through outsourcing or joint ventures. Processes that include procurement, HR, finance, accounting, IT etc, will become 'service platforms'.
  
  
• The virtual infrastructure elements are used to support the generic processes of the business, like office space, computer and communications hardware and software. These will migrate into 'service platforms' or 'asset platform' atoms, depending on their strategic importance to the corporation.
  
  
• Most corporations, with the exception of those purely in the service industries, have considerable amounts of capital invested in physical infrastructure - assembly lines, refineries, trucks, warehouses - and these will be the basis of 'asset platform' atoms.

Some atoms will spring forth from corporations fully formed, while others will be created from the best elements of consortia. Either way, we think that if an asset or a process represents what the corporation does then it should be retained, but if it represents something that is part of how it does it, then it should be sold or disbanded.

This is a radical vision - to accept it means you will have to ask yourself what it is that you and only you do best, and then letting go of everything else. But that 'everything else' is a potential source of great value.

What are the six atom types ?

Smart Companies - Engines of the Economy

A smart company is an independent knowledge-based business, capitalizing on its skills in innovation. It will conduct custom design project for other atoms, and will own a portfolio of designs and patents. It may concentrate on science and technology (e.g. drug research, specialist software, equipment design) on in more creative fields (graphic design, advertising, journalism).

The book explains how these smart companies will be formed from consultancies, consulting engineers, designers, architects etc, and how others will be carved out of existing corporations.

Webspinners - Business Catalysts

Business-to-business relationships in the old production-centred world tended to be governed by pre-ordained agreements "we might buy so much of this kind of stuff from you, at this price". But in a world where the customers' wishes can be tapped and must be followed these rigid chains will be too inflexible. When no two offers are likely to be identical the elements of the offer that are to be assembled, and therefore the business-to-business bonds that need to be created, vary almost in real time.

Deciding to trade with someone is a complex mixture of price, trust and prior experience. It's not just a question of who can provide the goods or services you need, but whether or not the goods or services are available now, and whether the potential partner can be trusted to deliver. The webspinner will facilitate inventory visibility and complete description of the goods or services, and must provide an assurance of trustworthiness.

Customer Managers - Knowing the Individual

By now it's pretty clear that universal connectivity is rapidly changing our roles as individuals from one of consumption to one of demand. We in the developed world finally have a way of expressing all of our demands, and those demands are to increase our experience rather than to consume your product. That's where the Customer Manager comes in.

Capture of customer desires and delivery of satisfaction will be focused around some of the customer's macro-processes - learning, health, personal wealth management, employability, entertainment etc - with bundles created, not to meet a typical customer's need, but your particular preferences. The scope of these companies is broad, so we expect them to be medium-sized.

But this will not be easy, especially for today's large corporations. The key idea that most of them are struggling with is that it's what customer intimacy can do for the customer that matters, not what it can do for the corporation.

Asset Platforms - Scale Has Its Place

The types of atoms we have described up to now are fine but they can only marshal and reorganize - they aren't actually creating the physical goods that are probably going to be an element of the customer offer. Someone has to make the cars, grow the bananas and refine the oil, and that's where we reach the fourth type of atomic corporation - the Asset Platform.

They will be concerned with the manipulation and movement of matter on a grand scale within a particular industry, and we foresee these platforms being multinational and potentially global. They will be the largest players in our atomized economy in terms of numbers of people, capital employed and (probably) revenues and profit. But they won't dominate the supply chain - they are too far from the customer for that to happen.

Service Platforms- Specialising in the Generic

All of these atoms will need to pay their staff, provide office space and computers, file their annual accounts, handle cash and do the thousands of things which do not differentiate them or directly provide income, but which need to be done in order to stay in business. We definitely see a role for a fifth atom type to handle these processes. Unlike the vertically-focused asset platforms, these service platforms would not be specific to one industry, but would probably be tied to a geography or to legal system.

Look around you: these atoms are already arising in areas like procurement, office space provision, Human Relations, IT (development, operations, maintenance), and business financing.

Portfolio Owners - Owning the Zoo

The corporation's shareholders will rightly expect to be compensated for the loss of direct control over its assets, and they will be: separation of these atoms from their parent corporation will release considerable relational capital. So our final type of atom is a portfolio owner that exists as a way of retaining the residual ownership of other atoms on behalf of the erstwhile shareholders.

Portfolio owners will manage their atoms as a set of investments that are expected to produce returns, maintaining a mix of types of atoms that produces the right profile of risk and reward. These are the financial giants of the new economy. Portfolio atom owners will have large market capitalizations and their balanced portfolios will attract much of the direct investment by individuals. They will be the channels by which many of the atoms - too small to float directly on the stock market - will raise capital.