Jan 30, 2013 3:07 AM GMT
It's argued by some that restructuring healthcare in the US will encourage people to take more risks... and that may be - but not by choice.
To Outsmart ObamaCare, Go Protean
Don't fire staff to avoid the 50-employee trigger. Make them corporations.
How big can a company get with just 50 employees? We're about to find out.
Thousands of small businesses across the U.S. are desperately looking for a way to escape their own fiscal cliff. That's because ObamaCare is forcing them to cover their employees' health care or pay a fine—either of which will cut into profits and stymie future investment and growth.
We've already seen many of America's biggest companies respond to the new law by laying off employees, putting them on part-time, or raising prices. But those are short-term solutions. Ultimately, these corporations will have to innovate and restructure to thrive in the era of ObamaCare. If small businesses follow their lead, they may even gain an advantage over their big competitors.
In his 2009 book "The Future Arrived Yesterday," veteran Silicon Valley journalist Michael S. Malone described a new organizational model called a "Protean Corporation." Like a protozoan single-cell organism, the protean corporation has the ability to "shape shift," rapidly adapting to internal and external forces in the market and the company. At the heart of a true protean corporation is a tiny number of core employees surrounded by a large cloud of resources, generally contracted or outsourced talent that does most of the work.
While the concept has been used successfully in large corporations like Intel, Microsoft MSFT +0.39% and IBM, IBM -0.49% it is bound to appeal to smaller companies now. Such businesses have several ways to get their workforce under the 50-employee limit at which certain ObamaCare rules kick in. These include reducing workers' hours to move full-time employees to part-time; laying off workers; and either selling the company or closing down.
"Going protean" offers a better strategy for many businesses. Owners of protean companies create a core of strategic employees who manage the big-picture elements of the enterprise—the culture, business model, product mix, vision, strategy, etc. This core then outsources the business tasks to other corporations.
Non-core tasks could include things like accounting, marketing, product development, manufacturing, IT, PR, legal, finance, etc. There is almost nothing that cannot be outsourced—including even the CEO function (which can already happen, e.g., when a company is in turnaround.) [...]
In the years ahead, as government continues to impose itself into the marketplace and reduce the freedom of the commercial sector through statist programs like ObamaCare, businesses will have to look for creative solutions to survive. Going protean is only one way, and others will emerge.
Yet as small enterprises approach 50 employees (or retreat back below that number), look for a significant number of them to concentrate on growing in revenues without ever again growing in employees. The result can be a wave of entrepreneurship, new company creation, business growth and economic freedom. Not a bad result when you consider that it will be spurred by the government's bid to keep America's businesses under its thumb.
Mr. Christiansen is an entrepreneur based in San Diego. He has owned an IT-training company and an executive forum group and currently has a Web-design firm, Quorim.com