Cooperative business structure

I'm interested in novel business structures, especially where employee's performance is directly connected to their pay, and employees can strike out in their own directions, taking the risk on their own shoulders.

The basic idea is to have a "marketplace for labour" rather than a centralised business structure.

Somebody commences a project by getting customer interest (or putting up bounties for salespeople who then do this) - that somebody would then be a project manager. He would then need various other people to help him finish that project: programmers, designers, accountants, lawyers, IT admin, sales people. The project manager would write up bounties for each aspect of his project that needs doing and collect expressions of interest. From this, he would assemble a team who would be contracted to that project for its duration. At the completion of that project, those people are freed to find other bounties. The project manager would pay the bounties using fees that the customer pays. In this case, the risk can either be completely on the project manager, or can be shared between all interested parties if profit is also going to be shared.

At any time, a number of project managers would be busy doing projects, and anybody can become a project manager to try out a new idea they have.

One implicit assumption here is that the whole project is run across the Internet, internationally.

Advantages:

• Employees are completely enabled. They choose the jobs they work on for an agreed price.
• Anybody can jump in and do work. People would need to build up a reputation over time.
• Anybody can jump in and be a project manager provided they are willing to accept the risk.
• Project managers can get people from anywhere in the world; labour can be cheap, or specialised.
• The labour market is open; prices are dictated by supply and demand.
• Work from home.
• This opens up labour markets overseas that are otherwise never thought of - rural France, Eastern Russia, Peru... many parts of the world aren't Bangalore or Moscow and still have good Internet access with non-expensive workers.

Disadvantages:

• This is a legal minefield. What happens if somebody doesn't pay? What happens if the project goes bust? What happens when the project manager does a runner with the cash?
• There's a possibility of fraud.
• Some reputation reporting system would be needed.
• Working over the Internet could potentially be difficult from a communication point of view.
• Most customers need to be face to face.
• There would likely be an image problem - how many customers would treat just the one guy (i.e. point-of-contact) who can promise them a multi-million dollar IT system?
• You often need to trust employees with sensitive data. A system of transient project-based employment and perhaps international employment makes this scheme unsuitable for working with sensitive data.
• There may be no coherant long-term vision or investment. There wouldn't be an R+D department as such, unless it's voluntary. Everybody wants to make a quick profit.
• There would be no paid training for staff (although this may be an advantage - staff need to train themselves and are more motivated to do so to get better bounties).

• There would be a significant amount of paperwork and negotiation generated by such a system and one of the key issues to making such a system workable is to find a way of managing this overhead.

   

(XXX old:) Contractors under one roof?

One idea is that each "employee" is an independant contractor. As a thought game, let's see how this would happen in a typical company. In a hypothetical IT company, you'd have:

• Managers
• Sales people
• Interal overhead people (HR, Finance+accounting, legal, IT)
• The people that do the actual work - i.e. programmers, BAs, Tech writers.

For the duration of a particular project, you'd want the same core group people to stay: managers, sales and workers. Other people such as HR could be involved with multiple projects.

Some sort of bounty system could be used. A bounty request could be put up for a particular contract by a manager who is commencing a project. A contract would require a certain number of workers; prospective workers could offer themselves available for a particular contract. The manager could then accept whichever workers have put up offers. Workers need not come only from a select pool; bounties could be public.

With such a bounty system, programmers could float between various projects as demand and supply changes. Such a bounty system could also have a reputation / ratings system to rate the quality of each worker.

Managers would have the full benefit/risk of respectively succeeding/failing, unless perhaps some sort of profit-sharing system was used.

Other parts of a company not often used could be separate "businesses" that offer their services. In this way, it could be possible to have several competing service providers creating a free market within the "company".

The result of such a structure would be a very decentralised business. Managers could start whichever project they want, and programmers can choose their manager. A good comparison is a cathedral vs a bazaar (Eric Raymond...), where instead of having central management, managers and projects can choose whichever direction they find profitable.

Working from home

I'm also interested in the ability to choose workers without being geographically constrained. This greatly expands the available labour pool.

Working from remote locations comes with several problems such as the problem of negotiating an international contract, payment using foreign currency and security concerns about confidential information.

Problems

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