The Atomic Corporation – A Rational Proposal for Uncertain Times

Citation

Camrass, R. and Farncombe, M. (2002), "The Atomic Corporation – A Rational Proposal for Uncertain Times", Foresight, Vol. 4 No. 3, pp. 53-54. https://doi.org/10.1108/fs.2002.4.3.53.1

Roger Camrass is the self‐styled rock‐star of the new economy. He might also be the business‐consulting equivalent of the British actor Leslie Philips. Philips made his name in dubious 1960s double‐entendre movies playing the old‐smoothie seducer. While Philips is enjoying a laddish cult revival, Camrass plies his trade as an after‐dinner speaker or ranting at management raves. His sound bites have wowed corporate top brass. For example, Camrass says that consumers will increasingly demand experiences not merely goods or services. He points out that his Jaguar sports car has more advanced technology than the Apollo missions had. Executives swoon. Resistance to his charms is useless.

Last year, Camrass teamed up with Martin Farncombe – his straight man and somewhat more pragmatic alter ego – to provide a thematic framework in which to weave all his sound bites together. The result is The Atomic Corporation, a prophesy of doom for mega‐corporations and a theoretical straw for the fat cats to clutch at in the hope of rescue.

The book is worth a look because Camrass’s one‐liners are as thought provoking as ever. It also has a fine pedigree and, perhaps by accident, forms part of a complementary trilogy of management texts that help Global Inc. cope with the connected economy. However, the history of the book since its launch last autumn is intriguing and dripping with irony. This context makes The Atomic Corporation a collector’s item.

So, what is the story? Well, big corporations had better beware because fate has marked their cards. Looking back, not many big businesses last very long in any case. Worse still, mergers and acquisitions only prove to reduce shareholder value, business re‐engineering offers diminishing returns, and young people are rioting in major cities in protest against global firms.

The connected economy sounds the death knell. You see, Ronald Coase said that organisation costs determine the size of firm (Medema, 1995). The significance of transaction costs means that firms need to be of a certain scale to achieve sufficient economies to be a going concern. Now that the technology of the Internet is reducing transaction costs, it is curtains for Mega Corp. The asteroid has struck earth. The dinosaurs will gradually become extinct.

Mega Corp’s board members are quaking in their boots. How can they avert disaster? The Atomic Corporation says that they must reconfigure the constituent parts – or “atoms” – of their organisation to increase their chances of survival. Instead of bureaucratic monoliths, Global Inc. needs to become a portfolio owner of distinct but connected atoms. These constituents are smart companies, customer managers, Web spinners, service platforms and asset platforms. Each atom is excellent as what it does. Smart atoms excel at innovation. Customer managers are tops at customer intimacy. Service platforms and asset platforms achieve operational supremacy. Relationship skills provide the glue that holds these atoms together and bonds them to the external world of suppliers and customers. As such, the plot signs up to Treacy and Wiersema’s (1997) philosophy on business unit specialisation.

Having set the imperative, The Atomic Corporation sets to work by introducing the atoms, understanding how they fit together, and identifying what does not distinguish firms in the market and needs to be downgraded or discarded. There is even a diagnostic tool worthy of Cosmopolitan. Of service platforms it asks: “Are your internal processes good? Really good?” These dodgy moments in the body of the text undermine some of the powerful messages that come later on: the importance of collective relationships in realising new value in the economy, the new business models that these relationships require, and the challenge to management in making these models operate effectively.

The Atomic Corporation boasts a fine pedigree. It forms part of an assortment of books that emerged from Ernst & Young’s Management Consultancy division before its sale to Cap Gemini (Minder, 2002) (cf. The Atomic Corporation Chapter 2 – Mergers: more often wrong than right). Each examines a different aspect of the impact of the Internet driven connected economy on corporations. Blur by Davis and Meyer (1998) describes changes in the nature of transactions and the evolution of products and services into offers. Managing Complexity by Wood (2000) sets out a methodology for practising strategists (rather than more general managers) to work under these new economic conditions. The Atomic Corporation completes the picture by addressing corporate structure. These books are each excellent in their own way but completely different in style, orthogonal in intention, unique to their respective authors, and from different publishers.

What makes The Atomic Corporation more intriguing still is its bizarre history since its publication last autumn. First, it became an instant hit. The tragic events of 11 September scared executives of big corporations. They realised that threats to their organisations came not just from market and regulatory forces. Indeed, there was suddenly a very real threat to the physical nature of their business in terms of the lives of its core people and its assets. Some major firms had whole departments wiped out.

The book’s message had inadvertently hit a corporate blind spot. Its thesis insinuated that firms should distribute their key atomic constituents. The inference was not necessarily real‐estate related. However, some top folk saw it as such. They marvelled at the authors’ incredible foresight. Talk show slots beckoned for Camrass.

Now, in Spring 2002, the book’s credibility has taken a hit. The reason is that, like many other business books, The Atomic Corporation levers anecdotes of exemplary corporate performance to prove its points. As such, it is a hostage to fortune. The classic example of this phenomenon is In Search of Excellence (Peters and Waterman, 1995). That book’s thesis relied on evidence of the top performing companies of the day. Years later, some of these by‐then‐ailing giants looked grim. Those parts of the text now raise a wry smile. The Atomic Corporation has come to grief in a fraction of that time. Fatally, it heralds Enron as a miraculous exemplar of its theory in action. Alas, 20:20 hindsight reveals that the miracle was a conjuring trick. Some of the analysis of the telecommunications stars of the day also looks suspect looking back.

Therefore, The Atomic Corporation was justifiably a hit but perhaps for the wrong reasons. Now it may flop, again for the wrong reasons. That would be unjust because the book offers some valuable pointers for large corporations.

However, The Atomic Corporation is not a seminal text to the same degree as some of the references it relies on. There are several reasons for this. First, the theory that the connected economy will reduce transaction costs may not hold water (The Economist, 2002). Sure, horizontal marketplaces like Covisint have reduced the cost of individual transactions[1]. However, the Internet will also make new, more‐complex transactions possible. They will be more expensive than before in absorbing the time of professionals who create and manage these transactions. Indeed, The Atomic Corporation predicts that relationship management will become increasingly important. This would increase organisation costs for firms. Therefore, relationship factors might increase the need for corporate critical mass.

Second, while The Atomic Corporation’s atoms appear logical, it acknowledges that the challenge will be one of managing the relationships between those atoms and external parties. Managers are ill‐equipped to deal with the new business models in this relatively new field. The authors acknowledge this but they stop short of exploring what firms might do about it. The book also focuses on large firms and omits the increasingly important role played by high‐ratio relationships, relationships between very large and very small firms (Mainelli et al., 2002).

Third, emerging genetic theories of organisations are likely to displace Camrass and Farncombe’s atomic theory. These state that organisations must deliberately mutate to form wide genetic pools (Rothschild, 1990). This will improve the probability of the survival of the species (read: corporate identity). In which case, the secret of future corporate longevity lies in creating the most diversity and swarming behaviours[2] rather than highly focussed groups of tightly bound atoms.

That said, the authors do not pretend to change the course of corporate history. Indeed, the book’s easy‐going style sets the tone for some “a‐ha” moments but is not over ambitious.

As such, The Atomic Corporation is a palatable prescription for mega‐corporations to avoid becoming the corporate has‐beens. If you like business books that eavesdrop on conversations consultants have with their boardroom clients, then buy this book. At least, spend your big corporation’s book budget before it is too late.

Stephen Pumphrey

Business Consultant at “etc” – a leading multi‐channel systems integrator, London.

Notes

1. 1.

   1 Automotive manufacturing industry supply chain and B2B exchange portal built by Ford, DaimlerChrysler and General Motors, www.covisint.com/

2. 2.

   2 The May 2001 issue of Harvard Business Review feaures “Swarm intelligence a whole new way to think about business’ by Eric Bonabeau and Christopher Meyer, which explores how insights into the efficiencies of insects are helping companies improve operations, organise people and plot strategy.