Management of hierarchical enterprises does not apply to networked organizations in the 21st century.
People are in need of different answers. They need answers to questions about how to implement better management with fewer managers. Creative networkers cannot rely on bosses to grow healthy organizations for them. They need to know how to manage things together.
I firmly believe that networked organizations own the future. Cooperatives of small firms, groups of young startups, communities of freelancers, and networks of franchisees will outperform traditional hierarchical enterprises. Their biggest challenge won’t be growth or survival. For networks, that is easy. Instead, their biggest challenge will be managing boundaries and growing in the right direction.
Last week, during my Virtual Coffee with Finland, I learned that Helsinki has a thriving ecosystem of startups, and many young games companies. It’s a fine example of what is happening elsewhere in the world as well.
These are the kind of businesses that require new answers to old questions such as:
How do we measure performance of teams?
How do we decide on salaries and bonuses?
How can we replace performance appraisals?
How do we collaborate with remote workers?
How can we replace job titles and career ladders?
The traditional methods of hierarchical enterprises don’t apply to networked organizations in the 21st century. People need to learn, from scratch, how to manage a business together and how to grow a company with coworkers.