The Organization of the Future: The Network

by Jessica Lipnack

Solutions: The Executive Magazine from Unisys

Jessica Lipnack, a co-founder and director of NetAge Inc., was president of The Networking Institute Inc., a consulting firm in West Newton, Massachusetts advised clients on how to gain strategic advantage by networking their organizations both internally and externally. Its clients included Apple Computer, AT&T Universal CardServices, Bank/Boston, Hewlett-Packard, Steelcase, and Vice President Al Gore's National Performance Review. Lipnack and her husband, Jeffrey Stamps, are co-authors of six books on networks. Their most recent is Virtual Teams: People Working Across Boundaries With Technology (John Wiley & Sons, 2000). Here Lipnack talks about the emergence of networks and how to create links within your organization.

The information age has arrived, and with it a new form of organization - the network: a distributed, spread out form of organization that enables people to work together without being in the traditional boss/employee relationship. The networked organization enables teams of people who are geographically distributed to be connected by shared purpose. It's proven to be a very effective form of organization, whether we're talking about business or government.

Links are the distinguishing feature of the age of the network. The fastest way to transform a hierarchy or bureaucracy is to add links of communication among the levels and among the isolated specialties. What you end up with is a very stable, yet very flexible, structure. That's what we're looking for - stable organizations that are also highly flexible. A network can constantly reconfigure itself, depending on what needs to be done. A traditional bureaucracy always looks the same. Every network looks different.

There are five basic principles that we believe to be applicable to all forms of networks: unifying purpose, independent members, voluntary links, multiple leaders, and integrated levels.

Unifying purpose. This is the glue and the driver for the network. Common views, values, and goals hold a network together, while a shared focus on desired results keeps a network in synch and on track. Every member of the network must be working toward a common goal - namely, the overall business objectives of the organization. This is where the network is distinct from traditional bureaucracy, where goals can differ from department to department, and rules and regulations hold the group together. In the network, everyone is held together by a shared vision of the organizationís goals and what it is attempting to accomplish.

Independent members. Individual independence is a prerequisite for organizational interdependence. Each member must be free to join or form a network whenever coordination with others will enhance productivity. But members must also be free to perform independently when it is the best way to be effective and to contribute their full abilities to the organization. Networks promote both the "me" and the "we."

Voluntary Links. Links in every direction distinguish the network. Individual members establish links with other members. As communication pathways increase, people interact more often. As more relationships develop, trust strengthens. Links cannot be preestablished or forced from above - they have to arise naturally as members of the network seek to achieve common goals. In the past few years, the cost of creating links of communication has plummeted, and the truly networked organization has become a reality.

Multiple leaders. Networks require fewer bosses - they are "leaderful," not leaderless. Each person or group has something unique to contribute at some point in the process. With more than one leader, the network as a whole had great resilience. It is not dependent on a single member for direction, and the fact that each member has a leadership role generates self-esteem and a sense of purpose that drives the progress of the network as a whole.

Integrated levels. Networks involve both the hierarchy and the "lower-archy " in decision-making, which leads the organization to action rather than simply making recommendations across groups. Integration of the different levels of an organization makes the network a whole rather than a sum of the parts. Some elements of hierarchy are present in the network, but the distinctions between top and bottom are not as strong as in a traditional bureaucracy - every level works together and functions as a part of the whole.

I am not saying that hierarchy is necessarily a bad thing, and this is where I differ from most people doing management theory. There are aspects of hierarchy that are extremely helpful and aspects of bureaucracy that you might want to hold onto. you need logical groupings at many different levels in order to organize large numbers of people. You can't organize 10,000 people in a network - it just doesn't make any sense. Hierarchy and bureaucracy can create order and structure in task environments, but you need to transform them in place through links.

Finally, another critical element in organizational structure is technology, and we haven't necessarily been developing the right technology for our organizations. We still have a very individualistic model of what people need.

Think about word processing. We have great word processors for individuals, but very poor word processors for groups of people working together. We have the ability to correct documents back and forth, but that's not the same as the ability to construct new ideas together. Groupware is in a very primitive state and we have yet to perfect ways of enabling groups of people to work in the same creative electronic space. That doesn't mean we canít do it - it just means we aren't there yet. Technology has yet to reach organizations in the way it needs to.

In general, the better the technological support, the better the group - as long as the technology serves the needs of the organization and fits in with its larger strategic priorities. Before investing in technology, make sure you have asked whether the technology helps the group to understand its work better.

We must design technology based on the work being done. We need to create links that allow an idea at the top to be the vision that is played out in the work of people at the bottom. Creating these links and fostering cooperation is the essence of the networked organization.