Large enterprises are invisible to the eye: take my company as an example. 70k people spread across more than a hundred countries. If you started traveling right now, you might be able to see all of the buildings over the next 6 months. But are the buildings the whole of the enterprise? I think we have to say no. You can look at the general ledger, and see numbers representing assets and cash flow; you can stand back and consider the company’s brand; you can look at the complete list of employees, and even meet many of them; you can watch the stock price and read what analysts are saying. Are any of these the company? Even taken all together, I don’t think they add up to the enterprise. And most importantly for our discussion, since we are are examining the question of how to get better, if you go into one of the buildings and look at people working, what do you see? For the most part you see people talking on phones and typing on computers, but you can’t see what kind of work they are doing. A software engineer looks the same as an accountant, and accountant just like a someone in marketing or HR. It’s impossible to observe more than a small fraction of the work being executed by a large organization, much less how well that work is being done.
We talk about “the company” as if it’s a thing like any other, but things generally have edges where they stop and the rest of the world begins, right? What defines the edges of the enterprise? Again, is it about real estate? Like the property line of the land on which the buildings sit? Probably not, since many buildings are leased, and much of the work done happens beyond those boundaries. Is it primarily an accounting concept such that all the things owned by the enterprise are on the inside and things not owned are out? That’s a interesting one, since my company is made up of many legal entities, each with their independent ownership, and things flow in and out of that ownership. Is the edge defined by the workforce, such that employees are inside, but contractors out? I have personally never arrived at a satisfactory answer, but I have a working definition: an enterprise is an open system (stuff flows in and out of it while it continues to be itself) unified by common purpose, which is self-creation and continuity. And it is largely a practical consideration at which level of organization we choose to focus. We can focus just on our team, department, function, company, or the whole ecosystem of partners and and suppliers.