August 4, 2014 4 Comments
One of the most striking things I see when watching organizations make the transition from legacy industrial models of working to new network-based models, is that we keep trying to employ the new tools and ideas in the same old ways. Certainly, it’s quite hard to unlearn the old methods, so deeply instilled are they by prior experience, history, and momentum. But as businesses, even today, we largely still try to create all the ideas, try to control everything, and focus on doing all the work to produce outcomes within the organization, team, or enterprise, with a little help of perhaps a few closely held suppliers and business partners.
In short, most organizations still have an out-dated and overly centralized model for working, and it’s turned out to be a very difficult habit to break. Unfortunately, these old models are also inefficient, highly resource intensive, low in innovation, short-sighted, and ultimately counterproductive, when we have such better — and increasingly proven — models that greatly outperform the old ones.
All too often I still encounter enterprise collaboration efforts, customer communities, and CRM projects that make the same essential mistake: They literally transplant how they do things today into emerging digital environments such as social networks, online forums, and collaboration suites, instead of tapping into the new ways of working that these new digital environments enable. This misses the whole point of adopting innovative new ideas and technologies that can unlock deeper opportunities that just weren’t possible before.
If I have a single key lesson that every organization seeking to digitally transform must learn it’s this: You must let the network do the work. It has the bulk of the ideas, it self-organizes at scale, it needs only a little control and guidance, and it has all the productive capacity, no matter how large your organization.
This was driven home yet again over the weekend when I came across the story of CrowdMed, a service that aims to diagnose some of the trickiest unsolved medical problems of patients with maladies that have resisted all previous attempts. Jared Hayman, founder of CrowdMed, which uses an external community of several thousands doctors and nurses, currently claims a 50% success rate at solving this difficult cases, just by letting the network do the work.
This is just one of thousands of similar stories of network-based peer produced solutions that work far better than their traditional, centralized counterparts from another era.
Of course, the challenge is to retain essential control. I find that the list of reasons companies give to why they can’t plug networks directly into the way they work, into their products and services, into their business models, even into the own personal workstreams is nearly endless: “We can’t trust it”, “We can’t rely on it”, “Our culture isn’t ready for it”, “That’s not how we’ve traditionally worked.” The list goes on.
In the end, unfortunately, these arguments don’t really matter, other than identifying and articulating one’s obstacles to change. That’s because the competitive implications are increasingly clear to anyone who does a cursory examination: Network models are far more cost-effective, richer, and higher scale than old models of working. So we simply must find ways to adapt in order to survive.
At the highest level, the future of the enterprise is inextricably entwined with social business, crowdsourcing, the collaborative economy, etc. These are the network models that are creating the next generation of fast-growing businesses, many, such as Airbnb and countless others.
The fundamental principle then, which we put as fundamental principle #1 about getting value from the network in Social Business By Design, to tap into the most value is really quite simple: Anyone can participate.
When you prevent this from happening, intentionally or otherwise, you sharply limit the value created and opportunity accessed. But most businesses today still let very few participate: They try to do it all themselves. For most types of work, this results in outcomes that are simply uncompetitive and unsustainable in terms of the cost, quality, and effort of the outcome.
So, why aren’t more companies doing making the transition then? I’d argue they are. Most companies are slowly moving towards network models. But far too slowly, given the growing digital competition.
Thus we are still in the midst of a global transition to network models that will likely take many us a decade longer. But the writing is clearly on the wall: Most industries are filling with new digital competitors who understand the fundamental rule of creating value using networks, and unless industrial age organizations can adapt, the upstart will win (and largely have been re: open source, social media, digital ecosystems like Amazon, Google.)
Fortunately, effective transformation is still accessible to most organizations if they are willing to change their mindset and think like digital natives.