Strategies for Organization Design

5Networks

“There is a central difference between the old and new economies: the old industrial economy was driven by economies of scale; the new information economy is driven by the economics of networks.”

—Carl Shapiro and Hal. R Varian, Information Rules: A Strategic Guide to the Network Economy (1998)

I was hired by the president of a large health system a few years ago to help her scale and spread their best practices. At the start of our three‐year journey together, some of her hospitals were performing very well in terms of quality outcomes and patient satisfactions, while others were performing dismally.

The differences in the performance were literally a matter of life and death. Errors in a hospital setting lead to “adverse events,” which sounds relatively innocuous, but an adverse event can lead to patient deaths. We needed to figure this out stat!

She had more than 20 hospitals spread out over two states, so to get them all to operate consistently at the highest level of performance was no small task. She was also very interested in innovation and scaling up the pockets of great ideas and processes that existed in her different hospital locations. This leader was clearly bright and curious. She had already tasked a team of her best people to figure out why some hospitals—even some floors of the same hospital—were over‐ or under‐performing in such significant ways. She had also tried in vain to scale some of the best innovations coming out of a single hospital to ...