A view from space
If there is a logical way to start describing this subject, it is probably to imagine looking down on the Networked Society from a Space Station. If you were there and all the Networks and people accessing them were lit up like light bulbs and light tubes, every country and the most affluent populations would be bathed in light. Population centers would glow and you would see that the globe was laced with networks.

Another visual model is one we use to describe the advancement of technology. We envision the progress of advancing technology in much the same form as a comet, with a glowing head and large plume of material trailing out behind the leading edge. The leading edge could be 3G point-to-point video mobile phones and fiber optic cables and the trailing plume of material, mechanical telephone switching stations and copper wires.

So we have a Networked Society that has great disparity in transmission speeds, access devices, transmission techniques and switches. The total population effected was reported by the CEO of Nokia this way: "Today, over 1.2 billion people worldwide have access to data, voice and personal communications." said Jorma Ollila, Chairman and CEO of Nokia, December 9, 2003 Geneva, Switzerland at the World Summit on the Information Society.

Business Models - Traditional & Network
Traditional Top-Down Hierarchical Models are the common form. They are run by a CEO supported by first line VPs that lead departmental functions. For centuries this form has been the preferred organizational format in Companies, Governments and Military organizations.

The theory is that the top person has a vision of where and how the group will accomplish it's objectives. Orders are passed down through the chain of command and information is passed upward relative to each discipline. We generally accept the premise that the messages from the "trenches" are passed upward with some fidelity and that the top people, with their elevated views of the situation, can make reasonably good decisions.

Like Dr. Phil says, "So how's that working for you?" Most clients we talk to express mixed feeling about how it's working. These early years in the Networked Society have raised a number of fundamental questions. Even the military, driven by technological change, has modified the traditional pyramid in light of their use of advanced information and communication devices.

The most modern military, like the one we recently deployed in Iraq, runs on an Integrated Field Situation Communications system. The system is supported by networked Sound, Video and Tactical input that shows what is happening in the trenches in great detail and provides real-time pictures as well as modeled simulation views of the situation.

This illustrates the importance and effectiveness of timely feed-back in managing modern warfare. It is also an illustration of the way good organizations, get to be better organizations, utilizing timely, positive and negative feedback.

The modern military, functions with input and sensors from many points on the battle line and real time video input. Tactical units operate with a high degree of autonomy while each action they take is monitored and evaluated. Many units take independent action, with local judgments based on their immediate situation.

There are lessons to be learned from this type of military operation, and their departure from traditional organizational models. They operate with maximum feed-back from tactical contact with the enemy and that is used to continuously evaluate requirements in real-time. No only does this shorten the lag time for decisions, it provides a superior understanding of over-all campaign situational status.

Many organizational forms on Internet depart even farther from traditional forms. The physical and logical structure of Internet is the opposite of a hierarchical structure. It is a point-to-point network with mediation at each end. Content is independent of the send-receive data. Conceptually the content is irrelevant to the system and no one person or entity controls the activity from a central position.

Organization happens from the "bottom-up" rather than from the "top down." It results in the formation of Communities of Interest, Chat-rooms, and blogs. One of the most complex examples is the creation of the Linux operating system that was written by hundreds of independent programmers working without centralized management. This has resulted in a "free-ware" OS that is the third most used operating system in the marketplace. This type of collaboration is unprecedented.

Internet's massive autonomy has also produced some organizational types that are unique. In nature, where large populations exist, like ant colonies and beehives or flocks of birds, we can observe bottom-up organizational processes. In these natural organizations, individuals take queues from their neighbors, and without central control behave as a group. This is observable in the flight patterns of birds and with people in the growth patterns of cities.

It is also true of Internet participants. A few people aggregate to trade and sell items and do so in an orderly, fair trade environment, and before long you have a site like eBay. eBay is as much a social movement as it is a commercial entity. What eBay represents is a self-monitoring, rule-based, barter and exchange system where the individuals participating in it have control of the process.

No business the size of eBay has ever been run and monitored by participants. Traditional thinkers would say "the inmates are running the asylum" and be done with the idea. That would be a mistaken judgment.

The eBays website states: " On any given day, there are more than 16 million items listed on eBay across 27,000 categories. In 2002, eBay members transacted $14.87 billion in annualized gross merchandise sales (GMS, the value of goods sold on eBay)."

In addition, eBay is a "Pure Internet Play." The PIP format is a small, highly leveraged (reads low capitalization), site that addresses a specialized function or market. There is wide variation in their successes however their sheer numbers presents real competition for traditional businesses. They are highly reactive, can make decisions and implement changes in the same time frame it takes traditional organizations to call a meeting.

How successful will they be? It remains to be seen but they bear watching.

Most businesses today are in a hybrid format with an active website and a Bricks-and-Mortar origin. This large segment of businesses retains much of traditional business overhead, labor, and mindset of the past, and supports a website. Just where, how and to what extent the website contributes to the bottom line can be a thorny and hotly debated topic.

The obvious dilemma is "We get most of our revenue from the Traditional business but we feel that Internet represents the future. How do we divide resources and time to optimize our revenue over the long haul?"

Of all the factors effecting the success of today's companies, perhaps the most critical rests with a top management that was born prior to the PC and Internet, prior to the Browser and prior to Mobile telephony. While these technologies are only symptoms, the syndrome is a mindset that may be unprepared to conceptualize or reason through today's Marketing and organizational challenges. This is not mud slinging, it is fact and a fact that must be reconciled.

How many top management people carry or own a Blackberry, Treo 600 or a Smart Phone. If they don't own or regularly operate digital, network-connected devices. This raises the question - how can you manage a business that relies on an understanding of the Market without becoming intimately involved in it?

Terry and Lisa Wellman