Wouldn’t it be nice if an entrepreneur could quickly execute a new idea by summoning an entire organization with just a click? The answer might be a “flash organization”, which two Stanford professors, Melissa Valentine and Michael Bernstein, described as ephemeral setups to execute a single, complex project in ways traditionally associated with corporations, nonprofit groups or governments. The workers on these projects would be freelancers who typically have never met before, come together solely to complete the project and then disband and go their separate ways.
Advances in information technology are driving the interest in and use of flash organizations in several industries including software and pharmaceuticals. Platforms make extensive use of data, algorithms and computing power to assemble the organizations. Then, once the project is completed every member of each team assembled by the platform reviews every other member, generating 20 to 30 data points per person per project, and artificial intelligence is deployed to identify patterns that will improve the selection of members to future teams. Early research also indicates that flash organizations will be most effective when team members have well-established roles and the teams include experienced product managers who can manage the process and skillfully combine and coordinate the work of the various technical freelancers.
Flash organizations allow specialists to ply their trade and continue to earn a living in the “gig economy”; however, they are still isolating and participants do not enjoy the emotional satisfactions of being attached to an organization. However, Valentine did not that flash organizations often develop solidarity and collective behavior, even though participants rarely meet one another face-to-face. The post-project review process provides the better performers with opportunities to advance in future projects and it can be expected that top technology specialists like web developers and product managers will be in high demand. On the other hand, flash organizations, in their current form, carry significant insecurities for participants in that they generally do not provide health or retirement benefits. Bernstein argued that the platforms that put together the teams that become the flash organizations can alleviate the anxieties of participants, particularly lower-skilled workers, by adopting programs traditionally implanted by companies such as providing benefits, topping off earnings if workers’ freelance income is too low or too spotty and even allowing workers to organize.
This article was written by Dr. Alan S. Gutterman, who is the Founding Director of the Sustainable Entrepreneurship Project (seproject.org), which engages in and promotes research, education and training activities relating to entrepreneurial ventures launched with the aspiration to create sustainable enterprises that achieve significant growth in scale and value creation through the development of innovative products or services which form the basis for a successful international business. This article appears in “Launching a New Business: A Guide for Sustainable Entrepreneurs”, which is prepared and distributed by the Project and available for download here.