Week 32, 2023—Issue #268
Marketplace Growth, Having Kids, and Antifragile Organizations
Successful organizations do three things: they create value for customers, they optimize for personal fulfillment, and they remain effective (and profitable) over the long term.
Here are three ideas to help you do the same:
#customervalue
Marketplace Growth
Reduce transaction costs to increase customer value
I’ve been reading more of Dan Hockenmaier’s essays on marketplaces. Marketplaces, he writes, “are simply businesses that don’t sell goods or services, but instead sell the reduction of transaction costs.” See #173 for a primer on transaction costs. Hockenmaier goes on to explain that the four types of marketplace strategies that exist (i.e., lead-gen, checkout, managed, and heavily managed) correlate almost perfectly with the four types of transaction costs (i.e., search costs, bargaining costs, enforcement costs, and distribution costs). The message is clear: businesses looking to grow their marketplace initiatives can do so most effectively by gradually reducing transaction costs, thus increasing customer value.
#personalfulfillment
Having Kids
A long slog punctuated by moments of absolute bliss
The best definition I’ve ever read of what it’s like to have kids is that it’s “a long slog punctuated by moments of absolute bliss.” I have two of them, 8 and 10 years old, and the sentiment encapsulates my experience perfectly. Having kids is not for everyone, but if you have or will go down that path, I’m pretty sure you won’t be doing it for all the sleepless nights and stressful school runs! You’ll be doing it for all the in-between moments of love and affection when you get to see a person grow and develop. You’ll get all of that — it’s a package deal, after all — and at times it will feel like there’s more slog than bliss. And that’s because there is! They don’t tell you that in Lamaze class, but it really is a really long slog! But it doesn’t matter. At the end of the day, all it takes is that one moment of bliss to make it all worthwhile.
#longtermeffectiveness
Antifragile Organization
Make re-orgs last by organizing for antifragility
Aaron Dignan, the author of Brave New Work, recently wrote on Medium about The Last Re-Org You’ll Ever Do. According to Dignan, most re-orgs simply shift an organization from one steady state to another. The new state may be better adapted to the environment, but since the environment keeps changing, another re-org is inevitable. However, if the last re-org introduces a fluid state that allows the organization to continuously reconfigure itself without top-down directives, it can withstand environmental pressures and even be strengthened by them. Such structures are antifragile, and while they may not always be efficient, they are effective. That’s why they represent the last re-org an organization will ever need.
That’s all for this week.
Until next time: Make it matter.
/Andreas
How can we build better organizations? That’s the question I’ve been trying to answer for the past 10 years. Each week, I share some of what I’ve learned in a weekly newsletter called WorkMatters. Back-issues are published to Medium after three months. Subscription is free. This article was originally published on Friday, Aug 11, 2023.
