Industrial-era corporations are at war with themselves and we are caught in the crossfire.
The endless restructuring of the past three decades provides the backdrop for the rise of alternative, collaborative and less hierarchical ways to organise ourselves through the web: forms of organisation that rely on what I call "We Think".
The large corporation that emerged in the late 19th and early 20th centuries was built on a military model of organisation: everyone had their place in a rank, every place defined a function, authority flowed through a chain of command from top to bottom. If you were unsure what to do next, you looked at your job description and if that did not provide an answer you asked the next person up the chain of command for instructions.
As corporations struggled to accelerate innovation, improve quality, cut costs and attract consumers with a wider array of products, it was often unclear whether the hierarchical corporation was disintegrating into networks of outsourced production or whether, on the contrary, it was tightening its grip through stricter performance management and centralised control of brands.
The outcome is that in most corporations' hierarchies are flatter, job descriptions vaguer, the working day more flexible, the working week more extendable, careers more unpredictable and the boundaries of organisations more porous as companies have to come to rely on shifting networks of polygamous partners and suppliers.
Getting more productivity, innovation and quality seems to require ever-greater pain to make organisations leaner and meaner. The outcome is more managerial turnover, employee stress and organisational turmoil.
We Think is emerging as an alternative organisational recipe. It provides a more effective answer to the multiple challenges organisations face. Open and collaborative models of organisation will increasingly trump closed and hierarchical models as a way to promote innovation, organise work and engage consumers.
In field after field, large groups of committed and knowledgeable contributors, collaborating with little hierarchy, are mobilising resources on a scale to match the biggest corporations in the world to create complex products and services. This should not be possible. Pigs do not fly. In the next few years the irresistible force of collaborative mass innovation will meet the immovable object of the entrenched corporate organisation.
We Think will not transform every business. Communes, mutuals and worker co-operatives often failed in the past. We Think has produced some impressive collective voluntary initiatives such as open source software, sites such as Slashdot and Oh My News in South Korea and, most famously, Wikipedia. But most people cannot pay for the groceries in the gift economy.
That is why We Think entrepreneurs are desperately searching for business models that will allow them to earn some money without turning their backs on the values of their community. Meanwhile, traditional companies are trying to become more open and collaborative: witness Microsoft's recent announcement that it would open up some of its source code to outside developers.
The most exciting business models of the future will be hybrids that blend elements of the company and the community, commerce and collaboration: open in some respects, closed in others, giving some content away and charging for some services, serving people as consumers and encouraging them to become participants when possible.
One of the biggest changes will be how businesses organise innovation.
Modern capitalism is defined by its ability to conjure up a stream of new products, services, organisational models and experiences almost out of thin air. For most of the past century we believed new ideas would come from special people, working in special places, often wearing special clothes: the boffin in his white coat in the lab, the zany inventor in his garage, the loft-living bohemian wandering the cultural quarter.
Innovation was seen as a linear and sequential process from invention through development to application. The consumers waiting at the end of the pipeline played little role other than deciding whether or not to use the product.
This pipeline model is increasingly breaking down.
The spread of the web means that more people than ever can begin and take part in creative conversations to combine their ideas and insights. In open source communities, innovation succeeds through early exposure to comments and criticism, which allows ideas to be refined, adjusted and re-interpreted. Open source communities provide a setting for critical, creative, often raucous and sometimes brutally honest discussion.
Creativity will still emerge from specially gifted individuals working in special places. But thanks to rising levels of education, ubiquituos mass communications and cheaper technology, innovation and creativity are becoming increasingly distributed, and emerging from many, often unexpected, sources.
Henry Ford created a model for mass production Linus Torvalds and his ilk are creating a way to organise mass innovation.
We Think: mass innovation, not mass production, is published by Profile and is available from Amazon. Charlie Leadbeater will be talking about the book at the British Library on the evening of 26 March.
Charles Leadbeater has won the David Watt prize for journalism, is a Fellow of the National Endowment of Science, Technology and the Arts, and spent 10 years working for the Financial Times where he was labour editor, industrial editor and tokyo bureau chief.