Ten tech-enabled business trends to watch

Excerpt

Making the network the organization

In earlier research, we noted that the Web was starting to force open the boundaries of organizations, allowing nonemployees to offer their expertise in novel ways. We called this phenomenon “tapping into a world of talent.” Now many companies are pushing substantially beyond that starting point, building and managing flexible networks that extend across internal and often even external borders. The recession underscored the value of such flexibility in managing volatility. We believe that the more porous, networked organizations of the future will need to organize work around critical tasks rather than molding it to constraints imposed by corporate structures.

At one global energy services company, geographic and business unit boundaries prevented managers from accessing the best talent across the organization to solve clients’ technical problems. Help desks supported engineers, for example, but rarely provided creative solutions for the most difficult issues. Using social-network analysis, the company mapped information flows and knowledge resources among its worldwide staff. The analysis identified several bottlenecks but also pointed to a set of solutions. Using Web technologies to expand access to experts around the world, the company set up new innovation communities across siloed business units. These networks have helped speed up service delivery while improving quality by 48 percent, according to company surveys.

Dow Chemical set up its own social network to help managers identify the talent they need to execute projects across different business units and functions. To broaden the pool of talent, Dow has even extended the network to include former employees, such as retirees. Other companies are using networks to tap external talent pools. These networks include online labor markets (such as Amazon.com’s Mechanical Turk) and contest services (such as Innocentive and Zooppa) that help solve business problems.

Management orthodoxies still prevent most companies from leveraging talent beyond full-time employees who are tied to existing organizational structures. But adhering to these orthodoxies limits a company’s ability to tackle increasingly complex challenges. Pilot programs that connect individuals across organizational boundaries are a good way to experiment with new models, but incentive structures must be overhauled and role models established to make these programs succeed. In the longer term, networked organizations will focus on the orchestration of tasks rather than the “ownership” of workers.

Clouds, big data, and smart assets

- Jacques Bughin, Michael Chui, James Manyika
McKinsey Global Institute, August 2010