Cell certainties

Many of the most creative and successful enterprises turn out to be composed of a cluster of no more than a few hundred people. This rule of thumb applies to everything from advertising agencies to scientific research teams.

Gerard Fairtlough, the founding chief executive of the biotechnology company Celltech, is not the only person to have made this observation. But he is the only one to have developed it into a model for business organisation based on the biological cell.

In doing so, Fairtlough takes the business fashion for drawing metaphors from the biological sciences to a new level of detail.

Writing in the current issue of the Demos quarterly, the Financial Times columnist Samuel Brittan acknowledges similarities between modern economics and current theories of evolution: "In principle, economists try to derive their theories from the behaviour of individuals maximising their utility within the constraints of finite resources and limited time, while neo- Darwinists try to take the principle down to the level of the gene in accounting for human propensities."

In business competition, consumers drive a selection process that favours those companies best adapted to the market. Product innovation works like the species variation that enables evolution to proceed.

The analogy is not complete. There is no parallel in Darwin's theory for the company that wilfully suppresses an innovation in order to maintain a cosy status quo, for example. But it is sufficiently robust to be taken further.

In his book Creative Compartments: A Design for Future Organisation (Adamantine, 1994), Fairtlough shows how competition not between companies, but between compartments within an organisation, can improve its fitness - just as it does among the cells of an organism.

Having led companies large and small, Fairtlough is keen to advise others how to reshape their corporations, whatever their size, into such compartments. "Within 10 years," he says, "there will be very few construction or manufacturing activities that require more than a few hundred people."

After working his way up to managing director at Shell Chemicals, Fairtlough departed to make the fledgling Celltech his prototypical "creative compartment".

These groups share certain skills, aims and concerns, he maintains. The people within them communicate effectively and non-hierarchically. These properties give creative compartments certain intrinsic qualities. For example, it is these groups that are in reality responsible for the establishment of such key criteria in competitiveness as the prevailing standards of excellence, even though these may appear to be decreed by legislation or management.

Celltech succeeded in part because it facilitated easy communication between scientists and managers and between scientists of different disciplines. In the youthful field of biotechnology, old rules and hierarchies were rendered invalid, as they often may be in a company where the ability to innovate is crucial for success.

The "cells" function well within themselves, and small companies are like unicellular organisms, in Fairtlough's scheme of things. In large companies, cells must communicate with one another as well as they must in large organisms.

With an organisation structured in such a way, Fairtlough believes, good things will emerge as if by magic, even though no one has instructed them to happen or even imagined their possibility.

And just as nature overproduces in order to guarantee survival, so a happily constituted creative compartment will generate a plethora of ideas - many more, in fact, than can realistically be used. Fortunately, Fairtlough also has ideas on how to control and select from this overabundance of creativity.

The biological models described by Brittan and Fairtlough are not valid in a scientific sense; they are not even necessarily consistent. "These ideas are abstracted from biology because they seem useful, not because they are rigorously applicable to the way people organise themselves," says Fairtlough. They should be seen in the context not of rigorous science, but of the - highly fallible - models conventionally used by economists. "These models aid thinking and creativity but they in no way prove anything about the way things work and shouldn't occasion particular expectations."

Following his own advice, Fairtlough pruned back once again in his business activity, becoming chairman of a new biotechnology start-up company, Therexsys. The appointment fulfilled a condition imposed by venture capitalists that the company should have professional top management. In a second round of capitalisation last year, Therexsys raised pounds 22m, sufficient to see it through several years of research and development in its quest for alternative gene therapies that do not rely for their efficacy on potentially troublesome viruses. Last October, Fairtlough stepped aside for David Gibbons, formerly chairman of the Abbott UK pharmaceuticals company, to take over the helm.

Fairtlough is currently working with the Demos think-tank on a new publication extending his ideas into the social sphere. Democracy itself would work better if society were reorganised into creative compartments, he says.

"These are not luvvie communities where nothing gets done," he maintains. Creative compartments, whether in business or society at large, are task- oriented. "People get real when they have responsibilities"n