book

The Connected Company

by Dave Gray, Thomas Vander Wal

September 2012

Intermediate to advanced

303 pages

8h 51m

English

O'Reilly Media, Inc.

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The Balance of Power is ShiftingA Wake-up Call at StarbucksSomething’s Happening HereCascading Effects Can be Initiated by CustomersCascading Effects Can be Initiated by EmployeesCascading Effects Can be Initiated by Enemies or CompetitorsCascading Effects Can be Initiated by Senior ExecutivesThe ATM RevoltPower in the Network
The Great ResetAn Age of AbundanceAn Emerging Service EconomyProduct SaturationInformation TechnologyUrbanization
The Industrial ModelService-Dominant LogicA Product is a Service AvatarProducts as VerbsProducts as Job DescriptionsServices are Co-createdA Process is Not a ServiceService Networks

Demands on Companies are Increasing in Volume, Velocity, VarietyCustomers Introduce Complexity and Variability into OperationsWhy is it So Hard to Keep Your Service Promises?Customers Resist StandardizationCustomer Support: Efficient for You, Painful for ThemCost and Quality are Not Mutually ExclusiveCustomer Service Doesn’t Have to be PainfulControl at the Edge
Why Do Companies Lose Touch?Over-ExpansionHow Starbucks Lost TouchHow Krispy Kreme Flamed OutBlind SpotsHow Xerox Missed the PC RevolutionHow Kodak Faded AwayRisk-Avoidant CulturesHow GE Revitalized its BusinessHow IBM Rediscovered CustomersWhen in Doubt, Get in Touch with Your Customers
How Did We Get Here?Dividing WorkInterchangeable PartsConflicting Constraints Lead to Rigidity
Return on Assets is DwindlingFewer and Fewer Companies are Surviving in the Long TermWhat is Causing this Increase in Death Rates?Faster ChangeCompetitionIncreasing ComplexityThe Red Queen Race: If You’re Not Running, You’re Falling BehindThe Red Queen RaceWhat is a Coevolutionary Process?Every Adaptive Move by One Organization Affects OthersAdaptive Moves Can be Competitive—and CooperativeAdaptive Moves Can Create Opportunities for OthersCoevolutionary Relationships Can be Very ComplexOptimization is a Journey that Leads to a Few Fitness PeaksWe are Reaching a Complexity Tipping PointThe Future is Connectedness
The Company as a MachineIntrinsic Rewards Drive ProductivityPeople Resist Being ControlledWhat Drives Growth?Closed and Open SystemsComplex Adaptive SystemsThe Long-lived CompanyDesign by DivisionDesign for Connection
Purpose Accelerates and Focuses LearningWhat is the Purpose of a Company?How Profits Can Destroy Your CompanyPurpose Sets the Context for Organizations to LearnPurpose is a Moving Target
Performance is How Well You are DoingThe One Judge of Service QualityBalancing Promise, Purpose, and PerformanceService Quality is a Moving TargetPromoters and DetractorsBuilding Long-Term Relationships with CustomersThe Net Promoter ScoreNet Promoter at EnterpriseConsistentGranular and TimelySeriousNet Promoter at AppleNet Promoter at Logitech
Moments of TruthThe Problem with ProceduresThe Front Line is not a Production LineThe Law of Requisite VarietyReducing VarietyAbsorbing VarietyFreedom to Experiment
The Complexity IssueAgile DevelopmentService OrientationService ContractsComposabilityLoose CouplingOrganizing for AgilityNetflix, a City of ServicesWhole Foods, an Agile Team of Agile TeamsMost Companies are Not Built for Agility
The Parable of the WatchmakersThe Podular OrganizationMorning Star’s Self-Organizing MarketplaceThe Nordstrom WaySelf-Organizing Teams at Rational SoftwareDemocratic Management at SemcoCan Your Company Go Podular?
What is a Pod?Process to PodChains Versus NetsPods are Flexible, Pods are FastPods Can FailPods Can Scale Up FastWhat Kinds of Companies have been Successful with a Podular Approach?3M is PodularAmazon is PodularA Podular System Trades Flexibility for ConsistencyWhy aren’t more Companies Going Podular?
What is a Platform?What is the Value of a Platform?A Platform is a GovernmentStandardsAttractorsSupportGovernanceBalancing the Needs of ConstituentsYou don’t have to be BigWell-Designed Platforms Absorb Variety
The Growth SpiralLevel One: How Entrepreneurs LearnLevel Two: How Organizations LearnTacit and Explicit KnowledgeLearning FieldsLevel Three: How Platforms LearnPace LayersFront Stage and Back StageBalancing the Front Stage and the Back StageMaking Platform DecisionsGrowth Spirals in the Connected Company
Linking Things Changes ThemWhat is a Social Network?Small WorldsScale-free NetworksPower and Control in NetworksPower in NetworksControlExercising Power in NetworksSituation AwarenessInfluenceCompatibilityThe PlatformThree Principles of Network Power
Strategies Don’t Last ForeverLet a Thousand Flowers BloomA Portfolio of ExperimentsSmall Bets: Set a Low Bar for Initial ExperimentationMedium Bets: Many Sources of FundingBig Bets: The Responsibility of Senior LeadersMore Experiments Means More At-BatsBe Connectable to EverythingStrategy by Discovery
Leading from the EdgeThree Types of StrategyEdge LeadershipPeople FirstAwarenessAdaptive TensionsDiversity MattersYou are a Learning FieldInfluence—Give Meaning and Moral Authority to the PurposePurposeWhat You Stand ForMoral AuthorityPrinciples Trump ProcessesIt Takes Trust to Build Relationships
Management is a Support SystemDesigning the SystemBalance the Individual Freedom with the Common GoodParticipationBuild Slack into Central Resources to Ensure AvailabilityRely on Peer-to-Peer Reinforcement Whenever PossibleOperating the SystemCritical Values in Complex Adaptive SystemsSymptomsTuning the SystemAdaptive TensionsAttractorsInformation TransparencyDensityDiversityPermeabilityRate of FlowParametersStructural ChangeEmergent LeadershipThe Job of Managers
Networks are NeutralPod FailureToo Much AutonomyNot Enough AutonomyPlatform FailureFailure to Invest in the PlatformOver-Controlling the PlatformFailure of PurposeCustomers First
How to Get there from HereIt Won’t be EasyDo You Work at a Place that Ignites Your Passion?Design Around CustomersTaking Steps Versus Crossing ChasmsThe Organic PathTop-Down, Leader-Driven ChangeConnecting an Internal Group at MarriottConnecting with Customers at U.S. CellularCommon ThreadsPilot PodsLaunch a Pilot Pod to Shift to a New Business ModelLaunch a Pilot Pod to Serve Unmet Customer NeedsDisrupt Yourself Before Someone Else DoesDisrupting Desktop Software at AutodeskDisrupting Full-Service Telecom at O2The Difference Between a Proof-of-Concept and a PilotNetwork WeavingIt’s Time to Change

Content preview from The Connected Company

Chapter 16. How connected companies learn

You can’t make a recipe for something as complicated as surgery. Instead, you can make a recipe for how to have a team that’s prepared for the unexpected.

—Atul Gawande

Connected companies grow and learn over time. Like all life forms and complex systems, their growth is governed by natural rhythms and patterns. As individuals and teams learn, they must find ways to share their knowledge with the larger community. As communities learn, platforms must learn how to support them.

The Growth Spiral

All learning and improvement begins with action. For example, as a child, you might touch a hot stove. Action leads to feedback and discovery: in this case, you discover that the action led to pain, burning, and discomfort. Based on this feedback, you start thinking about new ways of interacting with your environment. Based on your reflection, you start to do things differently. Over time, this leads you closer and closer to your ideal relationship with your surroundings.

The entire process is a growth spiral called successive approximation. Successive approximation is the secret sauce that makes methods like agile programming work so well. It’s the same process that is at work when you have a conversation.

Successive approximation works because—unlike many business thinking, planning, and execution activities—it’s easy and natural. We do it instinctively. ...