Monthly Archives: agosto 2014

Talking about the Network Era @LeadMedit @Medici_Manager @WRicciardi @muirgray

By Harold Jarche

Interesting things happen when hyperlinks subvert hierarchy, as the writers of theCluetrain Manifesto said in 1999. Wikileaks, Edward Snowden, Arab Spring, and the Occupy Movement are just a few recent examples. Spying on entire populations is another network era phenomenon. In education, the current subversion is the MOOC, which has already itself been subverted by corporate interests. In the labour movement we are seeing things like alt-labour as well as a growing shareable economy. Networked, distributed businesses, like AirBNB, are disrupting existing models, with the inevitable push-back as they become successful.

Networks will transform education, business, the economy, and society even further. In the network era, the creative economy will gain dominance over the information and industrial economies. Professional knowledge distribution will move away from institutionalized business schools into networked communities of practice.

The key to a flourishing society in the network era will be distributed sense-making. Self-instruction, the basis of personal knowledge management, will be a requirement in a growing number of peer-to-peer networks. Networked learning will give rise to networked decision making. David Ronfeldt articulates this well, with his TIMN [Tribes-Institutions-Markets-Networks] framework. Anyone raised during the past several decades probably understands tribes and institutions and even market forces. This is a triform society(T+I+M). But what happens as we become a quadriform society (T+I+M+N)?

TIMN has long maintained that, beyond today’s common claims that government or market is the solution, we are entering a new era in which it will be said that the network is the solution (e.g., here and here). Aging contentions that turning to “the government” or “the market” is the way to address particular public-policy issues will eventually give way to innovative ideas that “the network” is the optimal solution.

In the network era we have to understand how to become contributing members of networks, for work and for life. This should be a major focus for all professional training and education.

“Reed’s Law” posits that value in networks increases exponentially as interactions move from a broadcasting model that offers “best content” (in which value is described by n, the number of consumers) to a network of peer-to-peer transactions (where the network’s value is based on “most members” and mathematically described by n2).  But by far the most valuable networks are based on those that facilitate group affiliations, Reed concluded. – David Bollier

Without good sense-making skills, the citizenry cannot understand complex issues that affect us all, such as individual privacy versus national security. These issues require networked, human intelligence, not broadcast sound bites, nor ‘learning objects’.

Sensemaking should drive policy. Policy drives decisions. Decisions, of course, need to be informed. If the People don’t know what makes their world go ‘round, the folks on the Hill sure won’t. Globalized governments can’t. – Gunther Sonnenfeld

As David Bollier concludes, “Legitimate authority is ultimately vested in a community’s ongoing, evolving social life, and not in ritualistic forms of citizenship.” Should not education move beyond ritualistic forms of subjects, classes, and certifications and toward ongoing, evolving social learning? How else will we be able to deal with the complexities of this networked, connected sphere that we inhabit?

Jon Husband says that we are all in this together.

The interconnected Information Age is beginning to show us that we’re all linked together – and that the whole system matters.

This principle applies to organizations, to networks of customers, suppliers, employees and communities, to our societies and to the planet.

New language for this principle is popping up everywhere – knowledge networks, intranets, communities of practice, systems thinking, swarming, social software, social networks, tipping points.

Awareness is the key.  Maintain an “open focus”.

Being aware of yourself, others and the effects of your actions and ways of being in relation to others is a fundamental requirement in these conditions.

To thrive in the network era we need to understand networks – social networks, value networks, information networks, etc. Therefore we will need network era fluency.

network era fluency

Network era fluency could be described as individuals and communities understanding and being part of global networks that influence various aspects of our lives. For individuals, the core skill will be critical thinking, or questioning all assumptions, including one’s own. People will learn though their various communities and in doing so, develop social literacy. Information literacy will be developed by connecting to many networks. Diversity of our knowledge networks can foster innovation and improve our collective ability to adapt.

Mass network era fluency will keep our knowledge networks social, diverse, and reflect many communities. This kind of fluency, by the majority of people, will be necessary to deal with the many complex issues facing humanity. We cannot address complex issues and networked forces unless we can knowledgeably discuss them. To understand the network era, we need first to be able to talk about it.

The network era has already changed politics, created new dominant business models, opened up learning, and is now changing how organizations operate – on the inside. Once we are able to talk about networks, we will see that many of our current work practices are rather obsolete. From how we determine the value of work, to how we calculate pay for work; organizations will need to adapt to the network era.

I think business leaders and HR departments do not understand this shift, or the fact that this shift is accelerating, so that in a year or two 75% of peoples’ value will be based on their network performance, their ability to contribute to and accept from others. – Stowe Boyd


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Managing Complexity: The Battle Between Emergence And Entropy @Medici_Manager @pash22 @wricciardi @leadmedit

By Julian Birkinshaw, London Business School Term Chair Professor of Strategy and Entrepreneurship.

The business news continues to be full of stories of large companies getting into trouble in part because of their complexity. JP Morgan has been getting most of the headlines, but many other banks are also investigation, and companies from other sectors, from Siemens to GSK to Sony, are all under fire.

It goes without saying that big companies are complex. And it is also pretty obvious that their complexity is a double-edged sword. Companies are complex by design because it allows them to do difficult things. IBM has a multi-dimensions matrix structure so that it can provide coordinated services to its clients. Airbus has a complex process for managing the thousands of suppliers who contribute to the manufacturing of the A380.

But complexity has a dark side as well, and companies like JP Morgan, IBM and Airbus often find themselves struggling to avoid the negative side-effects of their complex structures. These forms of “unintended” complexity manifest themselves in many ways – from inefficient systems and unclear accountabilities, to alienated and confused employees.
So what is a leader to do when faced with a highly complex organisation and a nagging concern that the creeping costs of complexity are starting to outweigh the benefits?

Much of the advice out there is about simplifying things – delayering, decentralising, streamlining product lines, creating stronger processes for ensuring alignment, and so on. But this advice has a couple of problems. One is that simplification often ends up reducing the costs and benefits of complexity, so it has to be done judiciously. I have written about this elsewhere (provide link).

But perhaps the bigger problem is this advice is all offered with the mentality of an architect or engineer. It assumes that Jamie Dimon was the architect of JP Morgan’s complexity, and that he, by the same token, can undo that complexity through some sort of re-engineering process.

Unfortunately, organisational complexity is, in fact, more complex than that. To some extent, organisations are indeed engineered systems –we have boxes and arrows, and accountabilities and KPIs. But organisations are also social systems where people act and interact in somewhat unpredictable ways. If you try to manage complexity with an engineer’s mindset, you aren’t going to get it quite right.

I have been puzzling over complexity in organisations for a while now, and I reckon there are three processes underway in organisations that collectively determine the level of actual complexity as experienced by people in the organisation.

1. There is a design process –the allocation of roles and responsibilities through some sort of top-down master plan. We all know how this works.

2. There is an emergent process – a bottom-up form of spontaneous interaction between well-intentioned individuals, also known as self-organising. This has become very popular in the field of management, in large part because it draws on insights from the world of nature, such as the seemingly-spontaneous order that is exhibited by migrating geese and ant colonies. Under the right conditions, it seems, individual employees will come together to create effective coordinated action. The role of the leader is therefore to foster “emergent” order among employees without falling into the trap of over-engineering it.

3. Finally, there is an entropic process – the gradual trending of an organisational system towards disorder. This is where it gets a bit tricky. The disciples of self-organising often note that companies are “open systems” that exchange resources with the outside world, and this external source of energy is what helps to renew and refresh them. But the reality is that most companies are only semi-open. In fact, many large companies I know are actually pretty closed to outside influences. And if this is the case, the second law of thermodynamics comes into effect, namely that a closed system will gradually move towards a state of maximum disorder (i.e. entropy).

This may sound like gobbledegook to some readers, so let me restate the point in simple language: as organisations grow larger, they become insular and complacent. People focus more on avoiding mistakes and securing their own positions than worrying about what customers care about. Inefficiencies and duplications creep in. Employees become detached and disengaged. The organisation becomes aimless and inert. This is what I mean by entropy.

The trouble is, all three processes are underway at the same time. While top executives are struggling to impose structure through their top-down designs, and while well-intentioned junior people are trying to create emergent order through their own initiatives, there are also invisible but powerful forces pushing the other way. The result is often that everyone is running very fast just to stand still.

So let’s return to the leader’s challenge. If these three processes are all underway, to varying degrees, in large organisations, what should the leader do? Well, sometimes, a sharply-focused and “designed” change works well, for example, pushing accountability into the hands of certain individuals who are much closer to the customer.

But more and more the leader’s job is to manage the social forces in the organisation. And in the light of this blog, it should be clear that this effort can take two very different forms:

1. Keeping entropy at bay. This is the equivalent of tidying your teenager’s room. It involves periodically taking out layers of management, getting rid of old bureaucratic processes that are no longer fit for purpose, or replacing the old IT system. It is thankless work, and doesn’t appear to add any value, but it is necessary.

2. Inspiring emergent action. This is the equivalent of giving a bunch of bored teenagers a bat and ball to play with. It is about providing employees with a clear and compelling reason to work together to achieve some sort of worthwhile objective. It isn’t easy to do, but when it works out the rewards are enormous.

And here is the underlying conceptual point. The more open the organisation is to external sources of energy, the easier it is to harness the forces of emergence rather than entropy. What does this mean in practice? Things like refreshing your management team with outside hires, circulating employees, making people explicitly accountable to external stakeholders, collaborating with suppliers and partners, and conducting experiments in “open innovation”.

A lot of these are initiatives companies are trying to put in place anyway, but hopefully by framing them in terms of the battle between emergence and entropy, their salience becomes even clearer.