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Fast, Flexible, Innovative: Why Networks Thrive

Social Business, 2014-15-August-Networks.jpgVienna, September 1901. A man you’ve probably never heard of, Ludwig von Bertalanffy, was born. A man whose theories are helping to shape the future of how you do work. Ludwig von Bertalanffy, let’s just call him LvB, is the forefather of evolutionary systems thinking — something you’d usually find described in dry university textbooks — but he has had a radical effect on how we depict and predict interactions in systems in biology, physics, anthropology and social sciences.

Why does this man born more than a hundred years ago make a difference to you now, sitting in your cubicle or reading on your tablet? Because LvB originated general systems theory that demonstrates why thinking holistically is critical to surviving and thriving and why reductionist perspectives lead to extinction.

The Shrinking World 

Las Vegas, March 2014. The room is filled with the expectations of thousands. Whether that was because of Bill Clinton’s upcoming appearance at Microsoft’s SharePoint Conference or for news of the latest batch of bits to make our work lives more productive, depended on the individual. What was clear was the message in the keynote. The world is getting smaller and flatter. When Bill Clinton became president there were only 50 sites on the Internet. Chances are if you work in a large organization now, 50 SharePoint team sites were created in the last few days.

Clinton explained that we have “Greater interdependence on each other, we cannot distance ourselves from things happening around the corner or across the world. Technology pulls us closer together but can do so in ways that are good or bad.” It has enabled the spread of deadly bacteria, the ability to discover bombs and help fishermen rebuild their lives after the tsunami tragedy in South Asia. Malaysian and Sri Lankan fisherman tripled their incomes at a critical time when they were given cell phones to know the price of fish 30 miles up and down the coast. Technology — and by extension the information it transmits — fundamentally enables us to do more with less.

Hierarchies have dominated the way we work for generations. There is good reason for this: hierarchies are very efficient in passing along communications. It is the reason military units operate their chain of command this way. But the problem arises when communications need to be relayed back up the chain. Or to another unit altogether. It simply takes too long for the message to traverse back through the hierarchies and then for a response to follow the same path. By the time the message has been received and understood, the situation has changed. Social graphing, a way of mapping relationships between people, demonstrates how much faster networks can communicate. This allows your team, your unit, your company to sense and respond faster.

The brittleness of hierarchies demonstrates their instability. Outside forces are actively causing change all around and the ability to target a weak link in the chain can cause havoc. Whether it was the traditional TV broadcast networks and movie studios who worried about being destabilized by HBO who is worried about being destabilized by Netflix, the consequences of not being able to at minimum keep up with the pace of change are deadly in business.

Networks Provide an Edge

But what about inside your company? The value of connectivity is not simply the speed of communication.

There are five ways that networks help you win:

Resiliency

When a node in the network, whether a person or a hard asset, is unavailable, information can find ways to flow through alternate paths. It is this quality of networks that enable us to respond and adapt to change.

Efficiency

Have you ever wondered why rumors can spread so fast and yet a top down communication from corporate can take a long time to disseminate? Word of mouth, whether literal or digital, is surprisingly efficient in creating viral effects in marketing and might even have been the reason your company started using an enterprise social networking technology.

Network Effects

The more nodes that are connected to the network, the more benefit there is to the whole network. Whether from being able to connect faster to relevant people (new nodes) or having a greater understanding of what you do in the context of what your organization is doing, network effects are powerful sources of value.

Removal of Constraints

There’s a whole body of work on the theory of constraints. Suffice it to say that if we can identify how value flows in a network we can look for bottlenecks and fix them. Without proper identification we try to fix something before the constraint and wind up making the problem worse. Or if we make the step downstream of the constraint more efficient, that step will be starved of work.

Innovation

My favorite source of value. Social networks create a platform for serendipity: people, ideas, resources can re-combine in a myriad of ways to spur innovation limited only by human creativity and what we want to achieve in specific time scales.

Beyond the four walls of your company is the wider ecosystem of your customers, suppliers and partner interactions. Understanding those value chains and how your networks support and strengthen one another is a key source of business value and approach to anticipate what your customers will need and how your competition will respond.

 

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