The trouble is that the structures and operating models of the industrial age corporation are ill-suited in form and function to satisfy the modern consumer’s emerging desires. While companies promise customer focus and customization, most business models are still based on the logic of the 20th-century industrial enterprise: mass production at ever-lower prices. That is why, assert Professor Zuboff and Dr. Maxmin, manufacturing and services companies — autos, airlines, health care, and many others — struggle to profitably satisfy the new breed of educated, self-aware, activist consumer in greater need of self-actualization. “In the chasm that now separates individuals and organizations lie the keys to a new economic order with vast potential for wealth creation and individual fulfillment,” they write.
Shoshana Zuboff is not alone in trying to teach big companies to integrate the influence of the customer (and other stakeholders) into such areas as research and development, product design, and supply chain management. Academic peers, such as the University of Michigan’s C.K. Prahalad and Venkatram Ramaswamy in their book The Future of Competition: Co-creating Unique Value with Customers (Harvard Business School Press, 2004), similarly argue that, to unlock the new order’s social and economic value, business must restore the consumer’s influence in defining and creating value — influence that was eliminated in the era of mass production and consumption.
Professor Zuboff believes, however, that none of her peers’ ideas go far enough. Closing the chasm between consumers and companies, she says, requires nothing less than the creative destruction of managerial capitalism and its organizational forms. She makes a strong case that the traditional industrial age corporation, which historically has excluded consumers from the value-creation process, and is programmed for mass production and internal cost efficiencies, is incapable of becoming outwardly focused, flexible, and responsive to individuals. “Managerial capitalism has reached the limits of its adaptive range,” she and Dr. Maxmin write in The Support Economy.
All told, the book lays out a vision of capitalism — and the way it is managed — that is strikingly at odds with the dominant 20th-century forms, in which hierarchies, controlled from the top, created value strictly inside organizations, lodged that value in products and services, and delivered it to customers. In The Support Economy, Professor Zuboff and Dr. Maxmin meticulously introduce vocabulary to describe new economic principles, enterprise logic, organizational structures, and human roles. They call their vision of post-managerial capitalism distributive capitalism. Fluid networks of diverse product and service providers called federated support networks or federations populate the distributive capitalist system. A federation unites companies from different industries, and they collaboratively combine digital, physical, and human assets to create products and services with unique value for individuals.
“Federations are not defined by what they make, what they sell, or the services they perform,” they write. “Federations are defined by the constituencies that select them for support and by the ways they invent to provide that support.” For example, the book describes how a company such as Apple Computer Inc. could lead to the Golden Apple Federation — a support network of diverse enterprises that could include home computer products and services or health-care and personal finance services. The federation builds on the brand values of the original Apple Computer (hip, slightly counterculture, youthful) to offer services and content appealing to the kinds of people who value imaginative design and high-tech capabilities, and strongly relate to the bedrock Apple brand values. “The federation makes, sources, and supplies products and services, but those activities are secondary to, and in the context of, support relationships,” explains Professor Zuboff.
As customer needs change, federations can reconfigure themselves to offer new aggregations of products and services. One way federations know their customers’ changing needs is by deploying advocates whose role it is to provide them with deep support — support that can significantly affect an individual’s quality of life. All this hinges on advocates’ communication skills and emotional intelligence, and on IT systems that quickly and cheaply capture, organize, and distribute vast amounts of data on individual consumers. Imagine a call center staffer who is not only trained and empowered to respond to virtually any request or contingency a customer might have, but who knows the caller so well he can anticipate her needs. Professor Zuboff not only calls for a new relationship between companies and individuals, she also recognizes the need to reconcile the internal conflict of an employee who must obey corporate procedures and efficiency norms, even when they conflict with his or her own experiences and desires as a consumer.