If you follow the logic laid out by historians such as the late Alfred Chandler, who wrote classics like Scale and Scope and Strategy and Structure, companies exist to exploit the benefits of being big. They exist, in other words, to maximize efficiency at scale. The experience curve nicely represents this relationship: The bigger a company gets, the more experience it accumulates, and the more its performance–particularly cost performance–improves.

The logic of scalable efficiency arose in response to the spanking new transportation and communications infrastructures that emerged in the 19th century with the invention of the steamship, the railroad, the telegraph and, soon thereafter, the telephone and the automobile. These infrastructures for the first time enabled large-scale manufacturing facilities serving national markets. Scale in manufacturing in turn demanded scale in marketing to stoke the fires of consumers who’d previously only shopped for what they needed, not what they desired. Broad-based media businesses (such as radio and television networks and national magazines) arose to help companies mobilize the masses to buy. And a new type of business enterprise was born, one using the infrastructure and relative stability of the day to get bigger quickly through push marketing and production at scale.

Today we have a new infrastructure–a digital infrastructure that’s displaying a remarkable difference from the transportation, energy, and communications infrastructures that preceded it. As we wrote in our first post, previous infrastructures, like electricity, were shaped by technologies that came into society with a burst of innovation and dramatically enhanced performance before quickly leveling off in their price to performance ratios. This leveling off provided a measure of stability. Today’s digital infrastructures are providing far less stability or certainty.

Like streams of water that flow smoothly when moving slowly, but irregularly when moving fast, the events of our 21st century world are becoming swifter, more turbulent, and harder to predict. The unexpected is becoming commonplace. Probability distributions are increasingly less normal. Power laws are ever more prevalent. We live in an age of uncertainty.

As the world becomes less certain, scalable efficiency is losing its way. Yet our economy is chock-a-block with businesses that exist to maximize efficiency at scale. Businesses presuming predictability in order to push out mass produced products supported by mass marketing programs. Businesses relying on command and control in a world that’s increasingly difficult to command or control. Businesses losing their leadership positions at an ever-faster rate because they continue to push in a world gone pull.

Yes, the death of command and control has been greatly exaggerated for years now. The early prognosticators, however, mistook the lead times required for deployment of the new digital infrastructure. They also missed how long it would take to develop the new social and business practices needed to harness the capabilities of our new infrastructure–capabilities that are only now becoming visible on the fertile edges of business and society.

What we need, rather than a managerial philosophy based on the communications and transportation infrastructures of the 19th century, is one geared to the digital infrastructure of the 21st. We need a new rationale for our biggest private and public sector institutions–to re-imagine them in line with the world around us. Rather than scalable efficiency, we need scalable connectivity, learning, and performance. Rather than push, we need institutions that pull.

In our next post we’ll explore what pull institutions might look like. How they’ll make the most of uncertainty by allowing flexible access to resources. How they’ll use the forces of attraction to mobilize tens of thousands and even millions of participants towards a common goal.

In the meantime, we’d love your perspectives on the virtues of push in a big shifting world. In what ways do companies and other institutions continue to push? And how well is it working for them?

Read other posts by John Hagel III, John Seely Brown, and Lang Davison

See the original post here, by John Hagel III, John Seely Brown (JSB), and Lang Davison @ Harvard Business Publishing