Think for a minute about how you used to book your holidays, buy yourmusic, find an address or select insurance – 10 or even 5 years ago? Do you even bother to search for things these days or do you just relyon the recommendations from your network via Facebook, Twitter, Zemantaor even Amazon?

These prolific and radical changes are not limited to social andconsumer interactions on the internet.  They also impact the nature,shape and conduct of business both internally and externally.

Companies are increasingly working in networks, whether they beloosely coupled or tightly integrated, because of technology and theglobalisation that technology has brought with it.  Those networks areessentially virtual entities, and this trend will accelerate over thecoming years.  To be in or join a network, people need insight andconnections, as well as appropriate processes capable of supportingvarious business needs across the virtual entity.  That signalsfundamental shifts in the way people do business and the underlyingbusiness models.

This was one of the issues Leo Apotheker (co-CEO and a member of the Executive Board of SAP AG) and Andrew McAfee discussed during an interview with Charlie Rose earlier this week.

It echoes the message from Pisano & Verganti in their article Which Kind of Collaboration is Right for You? (Harvard Business Review December 2008):

In an era when great ideas can sprout from any corner ofthe world and IT has dramatically reduced the cost of accessing them,it’s now conventional wisdom that virtually no company should innovateon its own. … [But] greater choice has made the perennial managementchallenge of selecting the best options much more difficult. … [How]open or closed should your firm’s network of collaborators be? And whoshould decide which problems the network will tackle and whichsolutions will be adopted?

Those opportunities and challenges are equally applicable withinorganisations, with changes affecting the way people are now able towork together and the nature and style of management. Everythinghappens and needs to happen so much faster just so businesses can stayin the same (market) position and not loose ground to competitors.  Butwhilst the technology is there to expedite work processes and helppeople work better and smarter, often barriers in the form of cultural,organisational and behavioural changes are stifling.

As McAfeepoints out, it’s in this ever-changing technology context thatmanagement is being pressed more than ever to rethink the boundarybetween (i) control -> dictating how things will be executed and bywho and (ii) autonomy -> allowing people to organise themselves andseeing what emerges. Frederic Baud explores similar themes in his interesting post Will Enterprise 2.0 ever enter big organisations?More particularly, he considers whether an organisation viewing itselfas an internal market where resources can freely recombine to pursueemerging projects can greatly augment the output by loosing control ofthe nature of that output.  The ensuing discussion is also worth a read!

In any case, the ‘control’ model prevails in many orgaisations,where decision-making processes are closed or simply pay lip-service toemployee involvement, the few decide for the many based on their viewof what people want, and networking of information and expertise occursin very localised instances.

Yet when we look around for examples of successful businesses toemulate, who do we look to?  Google?  Proctor & Gamble? Toyota?  Hubbards? Headshift ? There are plenty more.  And what do they tell us?  Well, to quote Eric Schmidt – Google CEO (The Mckinsey Quarterly November 2008):

There’s a lot of evidence that groups make betterdecisions than individuals. Especially when the groups are selected tobe among the smartest and most interesting people. The wisdom of crowdsargument is that you can operate a company by consensus, which is,indeed, how Google operates.  …

One of the things that we’ve tried very hard to avoid at Google isthe sort of divisional structure and the business unit structure thatprevents collaboration across units. It’s difficult. So, I understandwhy people want to build business units, and have their presidents. Butby doing that you cut down the informal ties that, in an open culture,drive so much collaboration. If people in the organization understandthe values of the company, they should be able to self organize to workon the most interesting problems. And if they haven’t, or are not ableto do that, you haven’t talked to them about what’s important. Youhaven’t built a shared value culture.

For me, those views are examples of organisational learning theory in practice.  I’ve described the themes within that theory before, and for present purposes would just like to reiterate a couple of those themes:

    1. Learning requires challenging existing mindsets that form the basis of (possibly out-of-date) behaviour.

    2. Managers should encourage the generation and spreading of new ideas and practices about purpose, values and vision.
   
    3. That vision requires the maximum number of people to contribute toand share a picture of the where the organisation is going, and howpersonal and business goals coincide.

    4.Feedback is central to this system as it is critical to learning and adaptation.

Those ideas have been around alot longer than much of the technologythat has caused such radical change to the way things are done in thepublic domain.  That same technology is steadily entering anddisrupting the way things are and can be done in organisations.  Butfor that technology to be of real value, progress needs to occursimultaneously in respect of each of those ‘organisational learning’elements.  And if you’re reading this thinking that this type of changedoesn’t apply to your business or your industry sector, best you startwith #1 on that list.