Connecting Companies and Markets

Management in the Network Era: It is only through innovative and contextual methods, the self-selection of the most appropriate tools and work conditions, and willing cooperation, that more productive work can be assured. The duty of being transparent in our work and sharing our knowledge rests with all workers, including management.

As markets get more connected in the network era, and intangible services dominate, more business value will be created through innovation, not process improvement. Innovative ideas often come through loose social ties and diverse opinions. Companies therefore need to push work beyond daily practice and out to communities and networks. Openness improves task coordination, so that all problems can be seen. Transparency improves collaboration to get tasks done better. In such a work environment, trust emerges. With openness and transparency in place, cooperation with more diverse knowledge networks can then lead to real business value. Hierarchies  are merely simple control networks, while wirearchies support complex human relationships.

Connecting companies to markets in the network era

Connecting companies to markets in the network era

Note the terms used in the image above. Collaboration is not the same as cooperation. Collaboration means working together, with an objective, and usually for a boss. This can work well when the objective is clear and the conditions do not change. Cooperation means sharing and helping others without expectations of direct reciprocation. Cooperation helps to strengthen networks, without central managerial interference. In times of rapid change, and decreasing lifespans of companies, cooperation trumps collaboration.

In complex environments, weak hierarchies and strong networks are the best organizing principle. While many companies today have strong networks, they are too often coupled with strong central control. Becoming a wirearchy requires new organizational structures that embrace diversity, foster communities, and encourage cooperative behaviours. It means giving up control and letting workers connect outside the organization.

There are four interrelated activities in working as a wirearchy. Workers, taking the initiative as Talent, may be involved in all four at that same time.

  1. Coordination of standardized work.
  2. The daily practice of customized work.
  3. The continuous development of expertise in communities of practice.
  4. Connecting to others in social networks to ensure market and societal relevance.

All levels are necessary and knowledge has to flow between them, or companies will get disconnected from their markets and their people. Technologies, such as enterprise social networks, are not sufficient. Organizations must also allow access to external communities and networks, in the daily practice of knowledge work. Trust is very important, and the sharing of power is the visible evidence of trust.

Networked markets are beginning to self-organize faster than the companies that have traditionally served them. Thanks to the web, markets are becoming better informed, smarter, and more demanding of qualities missing from most business organizations. – The Cluetrain Manifesto

The gap between markets and companies can only be addressed by conversations between real people. Companies need to foster not only internal communities of practice but external communities of expertise. Only people can enable knowledge, trust and credibility to flow within and between markets and companies. Business in the network era is connecting companies to their markets through knowledge workers having conversations in communities and social networks.

Note: this is an update of several previous posts:

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