Flat Networks for Business Advantage

February 13, 2011
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I was reading an article a few days ago and a term was used that intrigued me, flat networks. Now in context the term refers to the technical architecture of a computer network and is defined as a network in which all stations can reach the others without going through any intermediary hardware devices, such as a bridge or router. The concept is usually applied in a network segment to contain traffic and improve network traffic speed, most often in a workgroup. Now I don’t really write about technical networking so let’s get to my point.

I was reading an article a few days ago and a term was used that intrigued me, flat networks. Now in context the term refers to the technical architecture of a computer network and is defined as a network in which all stations can reach the others without going through any intermediary hardware devices, such as a bridge or router. The concept is usually applied in a network segment to contain traffic and improve network traffic speed, most often in a workgroup. Now I don’t really write about technical networking so let’s get to my point. I think we can misappropriate the term to describe the new hyper-networked business model. I’ve used the phrase organic business network in the past to describe the new generation of people-centric networked business, another misappropriation of a technical term, organic computing and I like it because of the basic characteristics. Just to remind you, those are:

  • Flexible
  • Self-healing
  • Self-optimizing
  • Self-configuring
  • Self-protecting

I still like the phrase as a way to describe how businesses can become more social but I think flat network is also a great illustration of some important characteristics of the new model. People-centric networks need to be flat and cross boundaries for maximum effectiveness. For the network effect to provide the greatest business advantage the business must connect the inside to the outside and vice-versa. In the new networked business all of the ecosystem created by customers, suppliers, partners and employees forms the complete business network. Encouraging the freer flow of interaction between the groups is a key for any new social systems. The hierarchical management model of the industrial age company is counter to the free flow of information that is essential for the information based company to operate. In a hierarchical organization there are too many points where information tends to pool, leading to the old adage “information is power”. In the new model, information is power but only when it is shared, not controlled. The flat network aids in the sharing of information. It’s about connectedness and a flat network encourages flow. 

Business strategy is also changing in the new business model. The networked business needs a  continuously adapting implementation of an optimized business strategy. This is very different from the 5 year plan or strategy that sits on a shelf. In hyper-connected global markets, strategy must be flexible enough to meet the frequency of unpredictable changes in competition. Strategy that is flexible, adaptable and easily optimized to meet change is a part of a flat and organic business network model.