The Connected Company

Chapter 21. The Risks of Connectedness

History is a race between education and catastrophe.

—H. G. Wells

The speed and flexibility of connected companies gives them clear advantages over slow-moving adversaries. But no advantage comes without associated risk. How can connected companies go wrong? There are three ways: failure at the pod level, failure at the platform level, and failure of purpose.

Networks are Neutral

Networks in themselves are morally neutral. They are a method of organization. Like any other method, they have strengths and weaknesses, and they can be used for good or ill. Highly connected systems spread ideas faster, but they also spread viruses faster. Risky behavior in networks can have cascading effects that can’t always be anticipated in advance, as we have seen in the financial crisis of the late 2000s.

Connected companies learn faster—they can coevolve with partners and competitors, and they more easily adapt and respond to change. They do this by distributing control to semi-autonomous pods, supported by platforms and connected by common purpose. Pods, platforms, and purpose. All have strengths and weaknesses, and all are subject to failure. We will examine each in turn.

Pod Failure

Success in a connected company hinges on the concept of distributed control. By breaking the company into the smallest pieces possible, you can create a network of small, agile teams that can operate much faster than a large company or business unit ever could.

The question when distributing ...