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Seven lessons to learn from network organisations

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Seven lessons to learn from network organisations

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Networked organisations are all the rage at the moment as companies seek to flatten their management structures and become more responsive to the changing landscapes within which they operate.

Despite the undoubted attraction however, it isn’t suitable for every organisation in every circumstance.  Here are seven tips to help you determine if a flatter, networked approach is right for you.

  1. You need to scale up decision making – distributed decision making works much better when you have a large and complex environment to manage.  Wikipedia for instance would not work anywhere near as well if it had centralised leadership.
  2. Local knowledge is crucial – if you’re in a particularly fast moving environment where local decision making is required, then a network style can be very effective.
  3. Your team value their identity – network structures work really well when local people have a strong identity and can decide things locally.  Imposing a hierarchy on such people can often destroy morale.
  4. Decision making power is distributed – if your local teams have the power to make their own decisions then networks can work very effectively.  Of course you need the confidence to know they will act in the right way and all pull towards a common goal.
  5. Engage your stakeholders – CSR is so often aimed for but so seldom achieved.  By devolving decision making to local groups you’re allowing the interests of those local groups to both be heard and to be acted upon, which is great if you have a strong volunteer network.
  6. Resilience and risk – if all of your decisions are made by a single person, the risk involved is tremendous.  Networks distribute power throughout the organisation, thus making you more resilient if one ‘node’ is removed.
  7. Adaptive, not reductive – many business decisions are made reductively.  That’s fine when the environment is a simple one, but in a complex world it often means that leaders are missing the detail with which to make a good decision.  Networks allow decisions to be made as locally as possible.
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