The Connected Company – Restructure now or die in today’s hyperconnected economy – #bookreview

The Connected Company
Dave Gray, with Thomas Vander Wal
(O’Reilly,
hardbackKindle)

If you buy only one business management book this year, make it this one. It’s that good, and definitely timely.

Whether your organization chart stretches across continents or consists of just you, your smart phone and your computer, you can learn important insights and paths for new action from Dave Gray’s and Thomas Vander Wal’s well-written book.

“Competitive intensity is rising all over the world,” they emphasize. “Global competition and the Web have given customers more choices than they have ever had before. This means that customers can choose from an ever-widening set of choices, and it seems that variety only breeds more variety. The more choices that become available, the more choices it seems that people want.”

At the same time, like it or not: “The balance of power is shifting from companies to the networks that surround them. Connected, communicating customers and employees have more choices, and more amplified voices, than ever before. They have more knowledge than ever before. These trends are only increasing with time. This means the network—customers, partners, and employees—will increasingly set the agenda, determine the parameters, and make the decisions about how they interact with companies.”

And: “By changing the way we create, access, and share information, social networks are changing the power structure in society.”

Today, one negative tweet, blog post, or video that goes viral can wreak havoc within a company (or political campaign), disrupt careers, damage or destroy expensive advertising campaigns, and turn potential and existing customers away in droves.

In an economy increasingly service-driven, your factory-model training and mentality is now completely obsolete. You must be connected, you must stay engaged with customers and the rest of the world, and you must be able to respond to rumors and actual bad news as quickly and completely as you respond to orders from your best customers.

The Connected Company is organized into five parts that clearly spell out the problems and the achievable solutions.

  • Part One: Why change? – “Customers are adopting disruptive technologies faster than companies can adapt.” And: “Customers are connecting, forming networked communities that allow them to rapidly share information and self-organize into powerful interest groups.” To survive, you have to be more responsive to what they need and increasingly have the power to demand.
  • Part Two: What is a connected company? – “To adapt companies must operate not as machines but as learning organisms, purposefully interacting with their environment and continuously improving, based on experiments and feedback.”
    Part Three: How does a connected company work? – “A connected company learns and adapts by distributing control to the points of interaction with customers, where semi-autonomous pods pursue a common purpose supported by platforms that help them organize and coordinate their activities.”
  • Part Four: How do you lead a connected company? – “Connected companies are living, learning networks that live within larger networks. Power in networks comes from awareness and influence, not control. Leaders must create an environment of clarity, trust, and shared purpose, while management focuses on designing and tuning the system that supports learning and performance.”
  • Part Five: How do you get there from here? – “Connected companies today are the exception, not the rule. But as long as the environment is characterized by change and uncertainty, connected companies will have the advantage. There are four ways your company can start that journey today….”

The traditional hierarchy model of business structure still works when your markets remain stable. But when is the last time, lately, that that actually has happened? Companies divided into functions increasingly go awry in times of uncertainty, because those individual departments cannot adapt, change, and respond quickly enough. In the world of The Connected Company, “companies must organize differently. They must reorganize from hierarchies into holarchies, where every part can function as a whole unto itself.”

Gray and Vander Wal stress: “A connected company is flexible and resilient, able to adapt quickly to change. The path from divided to connected company is not simple or easy. But in an increasingly volatile world, it is also not optional.”

Fortunately, their book lays out some clear strategies and procedures, as well as imperatives,  for getting there.

Si Dunn

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