The Connected Company

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With a foreword by Alex Osterwalder.

The future of work is already here.

Customers are adopting disruptive technologies faster than your company can adapt. When your customers are delighted, they can amplify your message in ways that were never before possible. But when your company’s performance runs short of what you’ve promised, customers can seize control of your brand message, spreading their disappointment and frustration faster than you can keep up.

To keep pace with today’s connected customers, your company must become a connected company. That means deeply engaging with workers, partners, and customers, changing how work is done, how you measure success, and how performance is rewarded. It requires a new way of thinking about your company: less like a machine to be controlled, and more like a complex, dynamic system that can learn and adapt over time.

Connected companies have the advantage, because they learn and move faster than their competitors. While others work in isolation, they link into rich networks of possibility and expand their influence.

Connected companies around the world are aggressively acquiring customers and disrupting the competition. In The Connected Company, we examine what they’re doing, how they’re doing it, and why it works. And we show you how your company can use the same principles to adapt—and thrive—in today’s ever-changing global marketplace.

Anatomy of a Social Network

Network researcher Ron Burt has identified two types of activities that create value in small-world networks: brokerage and closure.

Brokerage is about developing the weak ties: building bridges and relationships between clusters. Brokers are in a position to see the differences between groups, to cross-pollinate ideas, and to develop the differences into new ideas and opportunities.

Closure is about developing the strong ties: building alignment, trust, reputation and community within the clusters. Trust-builders are in a position to understand the deep connections that bond the people together and give them common identity and purpose.

These two kinds of activity, bridging and trust-building, demonstrate two very different ways that people and organizations can bring value to a network: Bridging leads to innovation and trust-building leads to group performance. The value that comes from these activities is known as social capital. Like every other form of capital, social capital represents stored value—in this case, relationship value—that can be translated into meaningful and tangible benefits. The power of an individual node in any network can be considered along three dimensions: Degree, closeness and betweenness.

Degree is the number of connections a node has to other nodes; for example the number of people in your family, or on your team at work, or the number of “friends” attached to your Facebook account. For an organization it could be the number of sales affiliates or business partners.

The value of a high degree is potential: the potential to connect and interact with a great number of other nodes in the network.

Closeness is a measure of how easily a node can connect with other nodes. For example you are probably very close to your team at work because it’s easy to connect to them: you can contact any person at any time. But you might be further away from other people in your company. Some you might be able to catch by walking down the hall or popping into their office, while to see others you might need an appointment, or you might need to be introduced by a mutual acquaintance. Anyone who has tried to make a connection on LinkedIn knows that the greater the distance, the harder it is to make a connection.

The value of closeness is ease of connection: The shorter the distance between you and other nodes, the fewer network “hops” you need to make, the easier it is for you to make connections when you need to.

Betweenness indicates the degree to which a node forms a bridge or critical link between other nodes. For example, many executives are protected from distractions by executive assistants or secretaries who act as gatekeepers, who control access to the executive’s time and attention.

The value of betweenness is the power you have to block or grant access to others. The more nodes that depend on you to make connections for them, the greater your potential value to them and thus the greater your power.

Thus, the most powerful person or organization in any network is one that has a high number of potential connections, all of which are relatively close and thus easily accessible, while at the same time enjoying a position within the network such that it can choose to block or grant access to other nodes.

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