As he [Ken Iverson] explained in his book, Plain Talk: Lessons from a Business Maverick,

Most of today’s corporations were conceived as command-and-control organizations. The founders of integrated steel mills, for example, clearly assumed that the “genius” of the organization resided almost completely in management … In contrast, we built Nucor under the assumption that most of the “genius” in our organization would be found among the people doing the work. 2 3 From the outset, we shaped our business to let employees show management the way to goals that once seemed unreachable.

Coxe and Stevens agreed that it was Huang, specifically, rather than Nvidia’s proposal that attracted their attention. “The reason we backed these dudes is because they were world-class computer scientists,” Coxe said. “The average CEO will try to listen to the customer, but in computing, that’s a big mistake, because customers just don’t know what’s possible. They just don’t know what can be done!” Coxe observed that Intel and Microsoft had later struggled under more conventional management: “Jensen, from the beginning, was a world-class engineer who could see what was possible.

It is common, and natural, to tell the history of innovation through the exploits of men of genius, such as Edison and Tesla, and pioneers such as Berners-Lee and the Wright brothers. But if the Wright brothers had not flown in 1903, someone else would have done something very similar in some other location. Collective intelligence develops when the accumulation of collective knowledge reaches a point at which talented people identify problems that this shared knowledge can be employed to solve. And it is also common, and natural, to describe the history of innovation through the introduction of new gadgets, from aeroplanes to iPhones. I have taken running and apples as examples to emphasise that the

growth of collective intelligence has a range and applicability that extends well beyond technology.

PART 6: The Corporation in the 21st Century

24: Combinations and Capabilities

“The modern firm is a community, rather than an office or a factory. It is defined not by its plant and machinery but by its capabilities. The successful business is characterised by the distinctive nature of its collection of capabilities and the match between these capabilities and the needs of its customers – and other stakeholders. The claim that George W. Bush told Tony Blair that ‘the problem with the French is that they don’t have a word for entrepreneur’ is, sadly, apocryphal.

For Penrose, the firm was defined not by the assets it owned or the contracts it made but by its capabilities and its ability to deploy those capabilities in productive services: ‘All the evidence we have indicates that the growth of firms is connected with the attempts of a particular group of people to do something.’ Perhaps that seems obvious. But her emphasis

on ‘the group’ recognises the centrally cooperative nature of business activity, and her identification of purpose – ‘to do something’ – establishes its problem-related focus.