---
title: "The Next Storm of the Internet Will Surely Be Management!"
description: "If the internet's impact on commerce is superficial, its impact on management and industry is the most profound. The first wave of the internet was e-commerce, but the second wave will be management, overturning the management of the industrial age. By overturning management, it will overturn industry; by overturning industry, it will again affect e-commerce. The change in management systems means the main body of current economic life will be completely transformed. Although the internet has already deeply influenced life, its impact on life is just beginning."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-05-09"
language: "en"
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# The Next Storm of the Internet Will Surely Be Management!

> If the internet's impact on commerce is superficial, its impact on management and industry is the most profound. The first wave of the internet was e-commerce, but the second wave will be management, overturning the management of the industrial age. By overturning management, it will overturn industry; by overturning industry, it will again affect e-commerce. The change in management systems means the main body of current economic life will be completely transformed. Although the internet has already deeply influenced life, its impact on life is just beginning.

If the internet's impact on commerce is superficial, its impact on management and industry is the most profound.
The first wave of the internet was e-commerce, after all, e-commerce is closely related to the general public. The second wave of the internet will surely be management, overturning the management of the industrial civilization era. By overturning management, it will overturn industry; by overturning industry, it will again affect e-commerce.
A change in the management system means that the main body of current economic life will be completely transformed.
Although the internet has already deeply influenced life, its impact on life is just beginning. It is the proliferation of mobile internet that is moving us from an industrial civilization society to an information civilization society. The gap and chasm are like the difference and chasm between industrial civilization and agricultural civilization.
China, as the pinnacle of agricultural civilization, once suffered a century of beatings, humiliation, and even longer periods of catching up due to its backwardness in the face of industrial civilization. Similarly, backwardness in the face of information civilization will also lead to beatings.
## 1 **The Logic of Overturning: Industrial Civilization vs. Information Civilization**
There is a trend of vulgarization in the internet and e-commerce: the internet equals e-commerce, e-commerce equals Taobao, and Taobao equals low prices.
Many misunderstandings about the internet and criticisms of e-commerce stem from the above simplified understanding. The internet era has just begun; one or two successful internet phenomena are easily simplified as the entirety of the internet.
Let's first look at the logic of overturning in the industrial civilization era. When industrial civilization rose, whether it was the first industrial revolution represented by the steam engine or the second industrial revolution represented by electricity and internal combustion engines, the first impact was on industry, and only then on commerce.
Because machines increased production efficiency, mass production became possible. Mass production required a corresponding management system, so modern management emerged. Because of the abundance of products and the development of cities, the modern commercial landscape became possible. So the logic was industry first, then commerce.
When the information civilization represented by the internet rose, the first impact was on commerce, and then on industry. The internet is first and foremost an information transmission tool, a natural tool for solving information asymmetry, and commerce precisely originates from information asymmetry. Therefore, the internet has a huge, even disruptive, impact on commerce. The internet's disruption of commerce in turn squeezed industry, affecting industry's development at a certain stage, especially at a time when China needed industrial upgrading, but e-commerce lowered prices, leading to a "loser's counterattack." Therefore, the value of the internet and e-commerce has been seriously misunderstood.
In the information civilization era, a new type of management revolution is needed to prove the positive value of this era.
## 2 **Basic Components of New Industry**
Jack Ma and Wang Jianlin, Lei Jun and Dong Mingzhu—they are not suitable for opposing bets. They are not objects of disruption and being disrupted. Jack Ma and Lei Jun win with e-commerce, while Wang Jianlin and Dong Mingzhu are in traditional industry.
Haier's Zhang Ruimin's "xiaoweizhu" (small micro-owners), Handu Yishe's "three-person teams," and Redcollar's "C2M model"—these are the revolutionaries against Wang Jianlin and Dong Mingzhu. One is a product of mass manufacturing in the industrial civilization era, the other is new manufacturing in the information civilization era.
I call this era the information civilization era, just as the era created by the steam engine, electricity, and internal combustion engines was the industrial civilization era. The most influential technology in the information civilization era is not the internet, but IT based on microelectronics technology.
Entering the information civilization era, the basic components of new industry are already different from those of the typical industrial civilization era.
**1. The Emergence of Cross-Disciplinary Technology**
IT (microelectronics technology) is no longer a technology of one industry, but a technology that can cross boundaries and integrate with technologies of other industries. Products in other fields will change with the penetration of IT technology. Disruption occurs outside the industry; without such cross-disciplinary technology, it is impossible.
**2. Modularization of the World Economy**
When industrial civilization reached its peak, the world economy became modularized. For example, China is the world's manufacturing center, Silicon Valley is the R&D center, London is the design center, India is the call center, and New York is the marketing center. In a modularized world economy, a module can survive independently, but one that can integrate without any modules can also survive.
**3. Lowering of Innovation Barriers**
In the past, innovation was an activity with high barriers. Although small startups had a high proportion of innovation, true commercialization was almost exclusively the domain of large enterprises. Now, innovation by individuals or small micro-organizations is often more explosive and disruptive than that of large enterprises.
**4. Changes in Enterprise Growth Models**
Once the industry landscape of the industrial civilization era was formed, it was extremely difficult for disruptors.
Now, with the combination of finance and innovation, and venture capital's involvement in innovation, enterprises can develop exponentially, no longer needing to grow through rolling development.
## 3 **The Overturning of Management**
In almost every element of management, the management of the information civilization era contrasts with that of the industrial civilization era.
Division of Labor vs. Cross-Disciplinary
Fayol, the "father of modern management," placed "specialization of labor" as the first of his "fourteen principles of management." Division of labor improves efficiency and is one of the cornerstones of modern management. Adam Smith's "The Wealth of Nations" also begins with division of labor.
As a result of specialization, each individual is a tiny subdivision of the whole, and after subdivision, it is difficult to restore the whole. The importance of KPI assessment in modern management is a result of specialization.
In the information age, small micro-owners and makers are different; they are usually cross-disciplinary. For example, Handu Yishe's "three-person team" is almost a traditional clothing enterprise, but each person is cross-disciplinary. In the information civilization era, both specialization and cross-disciplinarity are needed. Without spanning multiple specialties, survival may be difficult.
Large Organizations vs. Small Micro-Organizations
Organizing more people together to form economies of scale is almost a basic feature of modern organizations. Regardless of the organizational form, bureaucratic (hierarchical) characteristics exist.
In 2014, Haier laid off about 10,000 middle managers and transformed the organization into a "platform + small micro-owner" model, with small micro-owners divided into transformation micros and maker micros. Small micro-owners are entrepreneurs with independent accounting, and makers are partners.
Does this mean economies of scale no longer exist? In fact, in today's modularized world economy, the basic survival mode is for enterprises to focus on one point and then integrate social resources.
Centralized vs. Distributed
In the past, the logic of enterprises was: a train runs fast because the locomotive pulls it. Now, high-speed trains use distributed power, with each carriage having independent power, and the locomotive only serves as the control system. High-speed trains actually run faster than ordinary trains.
The organizational form of the information civilization era is "platform + individual." Haier and Handu Yishe are both like this. The platform provides public service functions, while individuals undertake innovation and business functions. Even distributors as commercial organizations are now turning to the "platform + individual" organizational model.
Economies of Scale vs. Innovative Operations
Although the industrial civilization era also emphasized innovation and differentiation, the fundamental competitive force was scale, and strategy, operations, and management mainly served economies of scale. Even if differentiated products existed, they could only exist in two situations: one was niche markets that large enterprises were unwilling to enter; the other was product segmentation based on scale, i.e., niche products of large enterprises.
Borrowing the current platform perspective, large enterprises in the industrial civilization era were operating platforms, and segmented products mainly relied on the enterprise platform for operations.
There is a saying now that the internet is becoming infrastructure. Indeed, internet giants like BAT are providing infrastructure for the information civilization era. For example, Alibaba is the infrastructure for e-commerce. If the industry giants of the industrial civilization era provided internal operating platforms, Alibaba is merely a public platform for the whole society.
As long as it is a platform, it is always limited. In the past, most industries tended toward oligopoly. Now, internet infrastructure platforms are even exclusively monopolized. This should be a basic feature of public platforms.
When the internet provides public platforms, enterprises either rely on public platforms for operations, such as sellers on Taobao, or they become small platforms again, providing platforms for innovators. Handu Yishe has 300 "three-person teams," launching nearly a hundred new styles every day. I won't investigate the source of these styles; at least they are constantly innovating, which is an innovative operating system.
KPI vs. Individual Liberation
Hierarchical organizations and specialization bring process management, and process inevitably requires KPI. Modern management is widely criticized because the alienation of scientific management has three major "achievements":
First, a huge and ineffective management layer;
Second, complex management processes brought by the huge management layer;
Third, KPIs derived from complex processes.
No matter how much modern management emphasizes incentives, hierarchical organizations, processes, and KPIs determine that each person is actually a replaceable "standard part" of the organization. The so-called incentives are merely "incentives under bondage."
"Incentives under bondage" are passive incentives, "carrots under the stick." True incentives are individual self-motivation, incentives based on individual liberation.
The existence of small micro-organizations turns each person into either an entrepreneur on the platform or a partner. This is incentive based on individual liberation, an active incentive.
Until now, some people still talk about "activating individuals." I think individuals do not need to be activated; once individuals are liberated, they are naturally in an activated state.
Organizational Innovation vs. Individual Innovation
In the agricultural civilization era, or the early industrial civilization era, innovation was an art, an art difficult to imitate, just as Edison was difficult to imitate.
When Drucker talked about innovation in "Innovation and Entrepreneurship," innovation was no longer an art but a scientific process that could be "produced" like an assembly line. At this time, innovation was an organized activity, and the innovation organization, like a production line, had strict division of labor. Such innovation is very important for high-barrier innovation, but it is difficult to see inventors like Edison again.
However, after entering the information civilization era, Edison-style innovation seems to have returned. The power of individual innovation seems to surpass organizational innovation again. The world leaders in the internet field were initially "self-employed." Kevin Kelly has a saying: disruption comes from the edge. This saying has two meanings: one is that disruptors are unimaginable, and the other is that disruption has no threshold.
The internet organization's "platform + individual" structure, I believe, is both an operating structure and an innovation structure. It turns innovation that was originally decided by top management into distributed innovation.
Operating Products vs. Operating Platforms
Enterprises have been the main operating entities for a long time. The establishment of the divisional system broke this situation: divisions are operating entities, and headquarters is the decision-making entity. In the information civilization era, this situation is broken again: enterprises become service platforms, and individuals become operating entities.
If Handu Yishe started operating as a platform from a small scale, Haier's Zhang Ruimin faced greater difficulty in transforming at such a large scale. Their common feature is that the enterprise is no longer the main operating entity but a public service platform. The platform provides funds, brands, and other public services. This also means that enterprises admit that they are not competitive with individuals in operating capabilities.
Google's establishment of a parent company also provides evidence. Google, which started with a search engine, developed many products, but they all relied on the search engine as a big tree, and other products did not perform well. Google's establishment of the parent company Alphabet is actually to make each product an independently operated subsidiary. When individual innovation and individual operations show competitiveness, turning the company into a platform to provide public services for individuals is the way.
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