Thinking about your organization as a network

The Internet is one huge network. But it is also the platform on which many smaller networks can be formed. Your organization exists in and through a lot of these smaller networks as well as the meta-network of the internet.

Since we are so close to the dawn of the Internet, we do not yet even understand its full potential, although many new uses are already emerging. A great example of this is the concept of social media. Social media is a new category of communication. It is manifesting itself in many ways: networking sites, sites to share different kinds of content, and sites to co-create content. There are open versions of all these. LinkedIn and Facebook are examples of on-line communities where people create personal networks (for business or personal reasons) in order to connect, share information and communicate with their contacts or friends. YouTube is an open site to share video content. Wikipedia is an open site that is creating an encyclopedia of everything. There are millions of blogs on the Internet where people share their thoughts in written, spoken or video form.

Social media is accelerating the shift from a top-down to a bottom-up model all across society. It was seen in the victory of Barack Obama in 2008 in part on the strength of an Internet-enabled grass roots campaign. It is seen every time a YouTube video creates headaches or opportunities for corporate marketers. Indeed, more and more of these tools are being used by businesses to connect with their own networks and, if you will, strengthen the connection of their knowledge factory. They are already changing how companies communicate with their stakeholders.

The Internet is ultimately about sharing knowledge, making connections and collaborating to put knowledge to work. This makes it the platform for much of what your organization will do in coming years. But the Internet is the exception to the rule as networks go. Most networks are smaller, with limited size and, usually, a specific purpose. Every organization today is itself a network that is made up of many smaller networks. This means that, without a doubt, you need to understand networks.

And you need to learn to think of your organization as a network, your people as participants in networks and your work processes as themselves as networks.

There are lots of levels at which you can look at networks. In our work with clients, we usually start with a high level view like the Lego knowledge factory models shown here.

This form of model shows the unique combination that your organization creates by connecting human and relationship capital through structural capital. The models we build focus primarily on the value creation process (how you get paid) but, there is also a set of support processes that all companies use. Traditionally, these support processes were built and supplied within the “walls” of the corporation. They would be manifested in internal competencies and structural capital. However, many kinds of support processes are now outsourced. So they would be depicted as a piece of relationship capital.

The model of your knowledge factory is a good place to start in understanding and identifying the networks within your organization. The knowledge factory includes a series of processes (structural capital) that bridge human and relationship capital. Each one of these processes is essentially its own network.

In the medical device company, for example, the sales process involves internal competencies (human capital) as well as referral sources, program partners and the ultimate customers (three different kinds of relationship capital). The knowledge factory model explains how the structural, human and relationship capital fit together on a macro level.

There are two other ways we like to look at organizational networks: social and value networks. More on these to follow.

Adapted from Intangible Capital: Putting Knowledge to Work in the 21st Century Organization by Mary Adams and Michael Oleksak.