The Network Imperative: How to Survive and Grow in the Age of Digital Business Models

by Barry Libert, Megan Beck, Jerry Wind

Overview

Pivot your organization toward a more scalable and profitable business model.

Digital networks are changing all the rules of business. New, scalable, digitally networked business models, like those of Amazon, Google, Uber, and Airbnb, are affecting growth, scale, and profit potential for companies in every industry. But this seismic shift isn’t unique to digital start-ups and tech superstars. Digital transformation is affecting every business sector, and as investor capital, top talent, and customers shift toward network-centric organizations, the performance gap between early and late adopters is widening.

So the question isn’t whether your organization needs to change, but when and how much.

The Network Imperative is a call to action for managers and executives to embrace network-based business models. The benefits are indisputable: companies that leverage digital platforms to co-create and share value with networks of employees, customers, and suppliers are fast outpacing the market. These companies, or network orchestrators, grow faster, scale with lower marginal cost, and generate the highest revenue multipliers.

Supported by research that covers fifteen hundred companies, authors Barry Libert, Megan Beck, and Jerry Wind guide leaders and investors through the ten principles that all organizations can use to grow and profit regardless of their industry. They also share a five-step process for pivoting an organization toward a more scalable and profitable business model.

The Network Imperative, brimming with compelling case studies and actionable advice, provides managers with what they really need: new tools and frameworks to generate unprecedented value in a rapidly changing age.

Product Details

ISBN-13:	9781633692053
Publisher:	Harvard Business Review Press
Publication date:	06/28/2016
Pages:	256
Product dimensions:	6.00(w) x 8.70(h) x 1.10(d)

About the Author

Barry Libert is Chairman and CEO of OpenMatters and a Senior Fellow at the Wharton SEI Center for Advanced Studies in Management. Libert is also an angel investor, board member, and has been a business model and digital adviser to companies such as AT&T, Microsoft, GE Healthcare, Deloitte, ESPN, and Goldman Sachs.

Megan Beck is the Chief Insights Officer at OpenMatters, where she leads the firm’s investor and business research, publications, and curriculum initiatives. She is also an associate on network initiatives at the Wharton SEI Center for Advanced Studies in Management. Previously, she was a Bain consultant.

Jerry (Yoram) Wind is the Lauder Professor and Professor of Marketing at the Wharton School and the founding director of the Wharton SEI Center for Advanced Studies in Management. He is internationally known for his pioneering research on networked organizations, mental models, marketing strategy, and marketing-driven business strategy.

Join the network movement at openmatters.com.

Table of Contents

Part 1 The Promise: The Value Is in the Network

Digital Networks Are Eating the World 3

Networks Have Big Advantages 11

Part 2 The Principles: Ten Strategies for Creating Network Value

Introduction to the Ten Principles 27

Principle 1 Technology: From Physical to Digital 29

Principle 2 Assets: From Tangible to Intangible 39

Principle 3 Strategy: From Operator to Allocator 47

Principle 4 Leadership: From Commander to Co-creator 55

Principle 5 Customers: From Customers to Contributors 65

Principle 6 Revenues: From Transaction to Subscription 75

Principle 7 Employees: From Employees to Partners 85

Principle 8 Measurement: From Accounting to Big Data 95

Principle 9 Boards: From Governance to Representation 103

Principle 10 Mindset: From Closed to Open 113

Aspire to These Ten Principles 121

Part 3 The Pivot: Five Steps for Implementing Network Business Models

Introduction to PIVOT 125

Pinpoint: Identify Your Current Business Model 129

Inventory: Take Stock of All Your Assets 143

Visualize: Create Your New Network Business Model 155

Operate: Enact Your Network Business Model 167

Track: Measure What Matters for a Network Business 177

Reflecting on PIVOT 185

Part 4 The Practice: Becoming a Network Leader

Leaders Need to Think and Act Differently 189

You Are the Leader of Your Own Network 201

Notes 205

Index 211

Acknowledgments 223

About the Authors 229

Editorial Reviews

“…a tour-de-force read… a clear five-step process for leaders of organizations wanting to transform their own business models.” — Forbes

“The authors of this book want to show how to transform even the most traditional business model into a digitized, networked operation.” — SUCCESS Magazine

“This is at once a work of synthesis, innovation, scholarship, and insight rendered in clear, jargon-free prose with ample case studies that suggest actionable advice to “get the job done.” This formative text provides a threshold for a better understanding of business models and the managerial imperatives required for success.” — CHOICE, the publication of the American Library Association

“The Network Imperative offers the greatest value for companies that can start to rethink such issues as governance, HR and the allocation of their capital.” — Soundview (summary.com)

ADVANCE PRAISE for The Network Imperative:

Anant Agarwal, CEO, edX—
“There is no question: in today’s age, your network defines you. So many industries, from media to transportation, health care to education, are undergoing a digital revolution, moving from a traditional, in-person practice to a digital-everything, hyper-networked, global experience. The Network Imperative offers sharp insights into these disruptive shifts and discusses how businesses and leaders can best harness network effects to succeed in today’s digital world.”

William P. Lauder, Executive Chairman, The Estée Lauder Companies—
“Barry Libert, Megan Beck, and Jerry Wind brilliantly illuminate the promise—and pitfalls—of our interconnected, interdependent age. An indispensable volume for leaders of all kinds and categories, The Network Imperative shows each of us exactly how to harness the power of networks to drive value and deliver results.”

Jeremy Rifkin, author, The Zero Marginal Cost Society and The Third Industrial Revolution—
“The Network Imperative will change the way we think about the nature of business. The shift to a digitalized era, characterized by low marginal cost in the market economy and near-zero marginal cost in the network economy, requires a new type of business leader skilled in navigating distributed, transparent, and collaborative networks that are best optimized by creating lateral economies of scale across society’s value chains. The Network Imperative gives a new generation of business leaders the road map they will need to chart a more democratic, sustainable, and inclusive economic journey. I highly recommend this book.”

Sir Martin Sorrell, CEO, WPP—
“If you have an uneasy feeling that the business of business is undergoing systemic change, and if you aren’t at all clear about the nature of that change, let alone how to turn it to your advantage, you will find this a very valuable book indeed.”

John Winsor, founder and Chairman, Victors & Spoils—
“There are few books that usher in a new paradigm in business thinking. The Network Imperative is one of them. For years many of us have been poking around in the dark, knowing that networks are powerful and that businesses could be built around them, but we had very few frameworks to guide us. Libert, Beck, and Wind have illuminated the cave. Knowledge can now be shared. And networks will only accelerate.”

Don Gagnon, CEO, AAA Club Partners—
“The Network Imperative offers very practical advice for companies struggling to find their way in the digital revolution. The ‘Ten Strategies for Creating Network Value’ are relevant to both long-established brands and those still establishing their identity. A valuable tool kit!”

From the Publisher