Chapter 9

Hierarchy will Yield to Networks, Remaking Organizations

In the world of expensive communications and coordination, we developed hierarchical organizations that neatly separated functions from one another. The bigger the organization, the more silos existed—marketing, sales, research and development, operations, finance—and perhaps separated by region, territory, country...every transaction needed processes and controls. Customer service is a process for managing communications with outside parties—people that had actually purchased products from your company. Procurement is a process for managing how you buy from other companies. These organizational structures and processes thrive on two models of value for the individuals that run them—seniority and control of information.

Seniority and Control of Information

Social technology erodes both seniority and control of information. The value that exists in a hierarchical organization from holding information gives way to value from maintaining connections in a networked organization. Information seekers will navigate around information hoarders and find other ways to get the data or knowledge they seek. People helping to make those connections—from one person to another—thrive on this networked information model. A network node through which information and connections flow will be more valuable to an organization than one where information or connections stop or slow. And the individual who is at that node will derive ...

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