You are previewing The Connected Company.

The Connected Company

Cover of The Connected Company by Dave Gray... Published by O'Reilly Media, Inc.
  1. The Connected Company
  2. Dedication
  3. SPECIAL OFFER: Upgrade this ebook with O’Reilly
  4. Introduction
    1. Safari® Books Online
    2. We’d Like to Hear from You
  5. Acknowledgments
  6. Foreword
  7. One. Why change?
    1. 1. The connected customer
      1. The Balance of Power is Shifting
      2. A Wake-up Call at Starbucks
      3. Something’s Happening Here
      4. The ATM Revolt
      5. Power in the Network
    2. 2. The service economy
      1. The Great Reset
      2. An Age of Abundance
      3. An Emerging Service Economy
    3. 3. Everything is a service
      1. The Industrial Model
      2. Service-Dominant Logic
      3. A Product is a Service Avatar
      4. Services are Co-created
      5. A Process is Not a Service
      6. Service Networks
    4. 4. Services are complex
      1. Demands on Companies are Increasing in Volume, Velocity, Variety
      2. Customers Introduce Complexity and Variability into Operations
      3. Why is it So Hard to Keep Your Service Promises?
      4. Customers Resist Standardization
      5. Customer Support: Efficient for You, Painful for Them
      6. Cost and Quality are Not Mutually Exclusive
      7. Customer Service Doesn’t Have to be Painful
      8. Control at the Edge
    5. 5. How companies lose touch
      1. Why Do Companies Lose Touch?
      2. Over-Expansion
      3. Blind Spots
      4. Risk-Avoidant Cultures
      5. When in Doubt, Get in Touch with Your Customers
    6. 6. Structural change is necessary
      1. How Did We Get Here?
      2. Conflicting Constraints Lead to Rigidity
    7. 7. Complexity changes the game
      1. Return on Assets is Dwindling
      2. Fewer and Fewer Companies are Surviving in the Long Term
      3. What is Causing this Increase in Death Rates?
      4. The Red Queen Race: If You’re Not Running, You’re Falling Behind
      5. What is a Coevolutionary Process?
      6. Every Adaptive Move by One Organization Affects Others
      7. Adaptive Moves Can be Competitive—and Cooperative
      8. Adaptive Moves Can Create Opportunities for Others
      9. Coevolutionary Relationships Can be Very Complex
      10. Optimization is a Journey that Leads to a Few Fitness Peaks
      11. We are Reaching a Complexity Tipping Point
      12. The Future is Connectedness
  8. Two. What is a connected company?
    1. 8. Connected companies learn
      1. The Company as a Machine
      2. Closed and Open Systems
      3. Complex Adaptive Systems
      4. The Long-lived Company
      5. Design by Division
      6. Design for Connection
    2. 9. Connected companies have a purpose
      1. Purpose Accelerates and Focuses Learning
      2. What is the Purpose of a Company?
      3. How Profits Can Destroy Your Company
      4. Purpose Sets the Context for Organizations to Learn
      5. Purpose is a Moving Target
    3. 10. Connected companies get customer feedback
      1. Performance is How Well You are Doing
      2. The One Judge of Service Quality
      3. Balancing Promise, Purpose, and Performance
      4. Service Quality is a Moving Target
      5. Promoters and Detractors
      6. Building Long-Term Relationships with Customers
      7. The Net Promoter Score
      8. Net Promoter at Enterprise
      9. Net Promoter at Apple
      10. Net Promoter at Logitech
    4. 11. Connected companies experiment
      1. Moments of Truth
      2. The Problem with Procedures
      3. The Front Line is not a Production Line
      4. The Law of Requisite Variety
      5. Reducing Variety
      6. Absorbing Variety
      7. Freedom to Experiment
  9. Three. How does a connected company work?
    1. 12. Wrangling complexity
      1. The Complexity Issue
      2. Agile Development
      3. Service Orientation
      4. Organizing for Agility
      5. Most Companies are Not Built for Agility
    2. 13. The future is podular
      1. The Parable of the Watchmakers
      2. The Podular Organization
      3. Morning Star’s Self-Organizing Marketplace
      4. The Nordstrom Way
      5. Self-Organizing Teams at Rational Software
      6. Democratic Management at Semco
      7. Can Your Company Go Podular?
    3. 14. Pods have control of their own fate
      1. What is a Pod?
      2. What Kinds of Companies have been Successful with a Podular Approach?
      3. A Podular System Trades Flexibility for Consistency
      4. Why aren’t more Companies Going Podular?
    4. 15. Pods need platforms
      1. What is a Platform?
      2. What is the Value of a Platform?
      3. A Platform is a Government
    5. 16. How connected companies learn
      1. The Growth Spiral
      2. Level One: How Entrepreneurs Learn
      3. Level Two: How Organizations Learn
      4. Level Three: How Platforms Learn
      5. Growth Spirals in the Connected Company
    6. 17. Power and control in networks
      1. Linking Things Changes Them
      2. What is a Social Network?
      3. Power and Control in Networks
      4. Exercising Power in Networks
  10. Four. How do you lead a connected company?
    1. 18. Strategy as a Pool of Experiments
      1. Strategies Don’t Last Forever
      2. Let a Thousand Flowers Bloom
      3. A Portfolio of Experiments
      4. Be Connectable to Everything
      5. Strategy by Discovery
    2. 19. Leading the connected company
      1. Leading from the Edge
      2. Edge Leadership
      3. You are a Learning Field
      4. Influence—Give Meaning and Moral Authority to the Purpose
    3. 20. Managing the connected company
      1. Management is a Support System
      2. Designing the System
      3. Operating the System
      4. Tuning the System
      5. The Job of Managers
  11. Five. How do you get there from here?
    1. 21. The Risks of Connectedness
      1. Networks are Neutral
      2. Pod Failure
      3. Too Much Autonomy
      4. Not Enough Autonomy
      5. Platform Failure
      6. Failure of Purpose
      7. Customers First
    2. 22. Starting the journey
      1. How to Get there from Here
      2. The Organic Path
      3. Top-Down, Leader-Driven Change
      4. Pilot Pods
      5. Network Weaving
      6. It’s Time to Change
  12. A. Bibliography
  13. Index
  14. B. Discussion Questions
  15. About the Authors
  16. SPECIAL OFFER: Upgrade this ebook with O’Reilly
  17. Copyright

Chapter 13. The future is podular

Big companies are inevitably slow and cumbersome; small companies are quick and responsive. Therefore, break big companies into the smallest pieces possible.

Lou IBM Gerstner

Connected companies are not hierarchies, fractured into unthinking, functional parts, but holarchies: complex systems in which each part is also a fully-functional whole in its own right. A holarchy is a different kind of template than the modern, multidivisional organization. It’s podular.

The Parable of the Watchmakers

Small, autonomous teams are the service teams of the future, the fundamental unit of an organization that makes a learning organization possible. The next challenge is putting them together into a cohesive organization that is able to function as a single entity.

In 1967, in a book called The Ghost in the Machine (Penguin Books), Arthur Koestler coined the term “holarchy” to describe systems in which each part was also a whole in its own right. The concept was inspired by a story told by systems theorist Herbert Simon, called the Parable of the Watchmakers:

There once were two watchmakers, named Hora and Tempus, who manufactured very fine watches. Both of them were highly regarded, and the phones in their workshops rang frequently. New customers were constantly calling them. However, Hora prospered, while Tempus became poorer and poorer and finally lost his shop. What was the reason?

The watches the men made consisted of about 1,000 parts each. Tempus had so constructed ...

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