Chapter 1: The networked knowledge economy

Overview

Globalization, intense competition (often from unexpected quarters), demanding customers, regulatory changes, the relentless progress of technology - all are factors that recur high on the list of key challenges affecting businesses. How do they respond? Many management books, such as Thriving on Chaos by Tom Peters (1987), The Future 500 by Craig Hickman and Michael Silva (1987) and Competing for the Future by Gary Hamel and C. K. Prahalad (1994) offer prescriptions. A common thread in these is the need for organizations to be flexible, adaptive and to continually reinvent themselves.

The harsh message is - if they don't they won't survive. The average life of most sizeable corporations is less than thirty years. My former employer, Digital, for over twenty-five years a paragon of a company that adapted, was innovative and grew rapidly and successfully, lost its way, stagnated and was finally absorbed into Compaq after thirty-eight years. Comparison of today's Fortune 500 or The Times Top 1000 with those of just ten years ago shows dramatic changes with once strong companies, like Triumph and Barings no more. When I talk to senior executives, the consistent message that comes across is that they are in the process of changing or transforming their business. And today's change is not like the change management process, described by Kurt Lewin, of 'unfreeze, change, refreeze'. It is continuous and never ending.

The single most important factor that is driving most of...