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Though it seems unlikely, Tim Cook and Indira Jaising have something in common besides membership in Fortune’s 2018 ranking of the World’s Greatest Leaders. Cook (No. 14) is the wealthy CEO of Apple, the most valuable publicly traded company on earth; Jaising (No. 20) is an Indian lawyer who cofounded an NGO called Lawyers Collective, which promotes human rights issues. Yet they share this trait: Both have multiplied their organizations’ effectiveness by harnessing the power of unbundling. Following their example is a new imperative for the best leaders.
Unbundling means disaggregating enterprises of all kinds, from the smallest startups to entire nations. In business it can mean making a company more valuable by splitting it up, as Hewlett-Packard did and other companies (Honeywell, Pentair, DowDuPont) are doing. Or it can mean increasing value by delegating functions once regarded as necessary parts of the whole; Apple’s outsourcing of complex, high-tech manufacturing, and the staggering capital requirements that go with it, is a dramatic example.
Technology - Centuries - Size - Companies - Nations
Technology makes unbundling possible and often inevitable. For centuries, greater size made companies, nations, and other enterprises more efficient and effective. Increasingly, it doesn’t. Outsourcing and coordinating manufacturing, distribution, research, and nonemployee workers becomes easy and cheap in the digital era. The most extreme example is the Chinese appliance maker Haier, which is not so much a company as a platform that invites entrepreneurs to become one of thousands of microenterprises within its ecosystem. Crazy? Definitely not. Using this radically unbundled model, Haier has become the world’s largest appliance brand.
I asked the architect of Haier’s model, chairman Zhang Ruimin (on our WGL list in 2014 and 2017), why more business leaders don’t follow his example. “They’re afraid of giving up power,” he replied. Nearly all their incentives encourage empire building. “Bigger firms pay more, way more,” says Kevin Hallock,...
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