Salt Whistle Bay, Mayreau, is a tiny island in the Windward Islands of the Southern Caribbean, It's about as big as 4 or 5 football fields in either direction at best. As I write this, it is hosting a dozen sailboats with crews representing a number of different countries who are here for the night.

The real fun is watching how a group of enterprising local competitors have organized themselves into what appears to be a successful,economic system without, I suspect, anything written down or enacted into law. The economy is broken into two main market segments 1) about a dozen Individual "boat boys" with brightly painted designs who dart about providing a variety of services to incoming and moored boats and 2) four or five on-shore "beach shacks" which offer island drinks, grilled food, and some with extras such as T-shirts, brightly colored towels, etc.

The first market interaction occurs when one of the "boat boys" spots a boat that looks like it will turn into the bay. He rushes out to greet an incoming boat. His first sale is to entice the captain to follow him to a mooring ball where assists in tying up. He gets a modest tip for the contribution. In most cases he will the proceed with the "upsell" to come to dinner at one of the beach shacks to which he is affiliated. The next boat in will be approached by someone else so it is clear that they devised a system of "ups" similar to car dealerships and real estate offices. It also appears that when such a transaction occurs the boat becomes their customer so the others lay off.

The next market interaction is usually the "boat boy" who comes by to collect the fee for using the mooring ball. Several other individuals will come by with an offering such as ice, baked goods, T-shirts, garbage collection, or fresh fish. Sometimes a small boat will come in to sell jewelry or other goodies not offered in the bay.

Beach shack "operations" require a whole team, of course. Someone goes out to check the lobster traps. Someone catches fish. Someone goes to town (or comes out) to deliver food and supplies for the evening's dinners. Presumably, these product offerings can be sold to multiple beach shacks or just gathered for their own use.While tiny in scope the beach shacks still seem to employ cooks, bartenders, waitpersons and clean-up help. Naturally any of the team can cover multiple roles even though there seem to be enough people involved to cover each job. One of the more outgoing, (perhaps one of the "boat boys" from earlier in the day), also handles helping customers each their dinghys or goes to get them from their boat, handling music, etc.

We are currently here for our third evening in the last five or six years and the joy is to see that on each visit we can see the upgrading of quality, service, and complexity of activities. The boats and motors are newer and more substantial, the onshore facilities are becoming more substantial, and the sophistication of the workings of "the marketplace" are increasing.

So what's the point? Why a blog?

To me, this economic model clearly demonstrates how people who have opportunities can marshal their entrepreneurial instinct and drive, learn how to sell and cooperate for mutual benefit, and invest back into growing their businesses. They don't seem to need entitlements, government supervision, executive management or MBAs to make it happen. I wonder how much more of such creativity and drive can be unleashed in our business and communities if we get out of people's way and simply open the doors to opportunity?

success diagram In a Wall Street Journal article, “The End of Management,” Alan Murray makes a compelling argument that "modern management is nearing its existential moment.” He focuses on the last 100 years or so when large organizations developed to organize people and allocate resources for tasks that seemingly could be done much more effectively than individuals contracting with each other. Graduate business school programs have evolved, largely to educate large numbers of people to fulfill the needs of these organizations to deliver on that promise. One of the responsibilities of many, if not most, of the people in these organizations is to increase certainty or predictability with the intention of increasing quality and on time, on budget, performance. An unintended consequence of those efforts is to make the organizations resistant to change and seemingly even resistant to the dynamics of the market itself.

As the rate of change and market disruption accelerates to the pace we see today with the advent of things like social networking and smart phones, this sets up “a destructive clash between whirlwind change and corporate inertia.“ Murray argues that some of the classic failures of once market-leading companies has not been a result of “’bad management," but because they follow the dictates of ‘good’ management. They listened closely to their customers. They studied market trends. They allocated capital to the innovations that promised the largest returns. And in the process they missed the disruptive innovations…

Murray traces the development of managed corporations back to a 1937 book citing the importance of lowering transaction costs. We’d like to step even further back for a moment to the very origins of capitalism and organized business. Rodney Stark in his book “The Victory of Reason” provides a very detailed history of the evolution of business, as we know it. Activity started shifting from barter to cash in the 9^th century and great monastic estates began hiring labor forces to perform complex, well-organized activities. By the 13^th century, religious and societal issues around profits, property rights, credit, and vending had been resolved. Italian city-states began expanding trade into Europe and the rest of the Mediterranean.

Banks and management evolved to address the issues first of facilitating transactions over these greater distances and then lowering their cost. By the 14^th century Italian schools were organized to teach required administration and management skills. Accounting, compound interest, double entry bookkeeping, and insurance were invented, all to facilitate transactions. As trade expanded to England, a nation of shopkeepers and manufacturing entrepreneurs sprang up and, as they say, “the rest is history."

Fast forward back to today with this historical perspective and we can see that everything we take for granted as we do business today was originally invented by someone to facilitate trade, which in turn was driven by thousands of entrepreneurs in all regions where they were allowed to operate and were not taxed out of existence. Modern management is just a relatively late development to solve the “recent” problems of large operations scattered over great geographic areas and allow them to continue to facilitate trade and lower its cost. Much of the value of that management has been in gathering, organizing, and dispensing information needed by large numbers of people in far-flung operations to get their work done and make the transactions happen.

Now, with the advent of instant worldwide communication, essentially free information, and the ability of large numbers of people to organize and collaborate without hierarchy, creativity and innovation can move far more rapidly than it can through a traditional organization. Individual entrepreneurs are again empowered, as they were in the middle ages, by these “new fangled inventions,” to start and build businesses. To survive and continue to add value to society, existing firms will be called upon to facilitate their employees ability to think and act like entrepreneurs and to find ways to make their collaborative efforts more valuable than “free” individuals can create through open source collaboration.

Bottomline: The game is on! Is your company addressing this enormous historical shift that rivals that which happened in the 9^th to 13^th centuries? Are you recognizing this new game? Are you “all in”?