Collaborative Networks Are The Organization: An Innovation in Organization Design and Management

In August 2000, Peter Drucker made a startling prophesy: “The corporation as we know it is unlikely to survive the next 25 years. Legally and financially, yes. But not structurally and economically.” Nine years later, the business world is witnessing the realization of Drucker's prediction. Firms are slowly embracing the power of openness and innovation—not just products and services, but also processes and business models. This is a new way of being for businesses, to pursue opportunities while managing risks that come with globalization. In this in-depth article, the authors dive deeply into what it means to collaborate, moving far beyond simplistic ideas of working together or having a strategic alliance. As the authors explain, collaboration happens in a network, as organizations open themselves up to a variety of stakeholders and communities. The network is dynamic and “fit for purpose,” with the agility to change the components and how they relate to each other legally and operationally as purpose and context evolves. Harnessing the strength of contributors, the network benefits and connects all parties in new and innovative ways. In short, the collaborative network is the organization. The authors draw upon research findings, case studies, and examples from their consulting and operational experience with many different organizations and industries, including government entities, oilfield producers, pharmaceutical alliances, and basic science collaborations. The article illustrates, using real-world examples, the benefit of collaboration, the five factors of a successful network collaboration, the value proposition of the collaborative network, and the role of the network choreographer.