‘The top-down model of innovative change is impossible for today’s fast-moving industries[i],’ notes INSEAD professor Henrik Bresman. Networking effects ‘…are driving the winner-take-all economic shift[ii],’’ exemplified by Amazon. The winner, with a dominant market position is emerging as the hub, or integrator, of the economic system. This role is born bout more from how things are done as opposed to any notion of market boundary. For example, Rakuten Ichiba is ‘Japan’s single largest online retail marketplace. It also provides loyalty points and e-money usable at hundreds of thousands of stores, virtual and real. It issues credit cards to tens of millions of members. It offers financial products and services that range from mortgages to securities brokerage. And the company runs one of Japan’s largest online travel portals—plus an instant-messaging app, Viber, which has some 800 million users worldwide[iii].’
Tomorrow’s organisations will increasingly inhabit a network of networks, whether they orchestrate, facilitate or contribute to such networks. It is likely that ‘…the network will help companies understand the dynamics of their business and whether their operational metrics are where they should be[iv].’ People, sensors, and devices are increasingly interconnected, in many cases beyond traditional organisational boundaries. The future network, comprising company, supply chain, sub-contractors, markets, investors and more will all exist within a single network yet constituent parts will inevitably be enmeshed in other networks. Whether owned or not, networks are becoming increasingly embedded within organisations. Network-centric businesses would appear to be the way forward for many industries as is demonstrated in the construction industry; each project sees a reconfiguring of constituent parts based on what is needed. Long term, this may lead to networks competing with one another and the necessary development of network-centric capabilities.
Adjusting to this changing business environment will require organisational renewal. Everyone on the leadership team has a role to play in adjusting successfully to a network of networks. The CIO needs to articulate and demonstrate how IT can work across silos and businesses to help units meet their goals and collaborations succeed. CIOs need to help align business strategy cohesively to the network in question Networking customers and partners could become a key feature of the future CMOs remit. Common forms of dataflow will be necessary if partners are able to work collaboratively on a given issue or project. Common third-party security standards will need to be established in conjunction with the CIO and others. Security and privacy controls will need to be built at the edge and intrinsically part of every device and network.