Network Logic - Index of

Network logic
many sectors we categorise as services, such as processing insurance
claims or sorting cheques, these are low-value activities. Value added
in service and manufacturing sectors alike lies more and more in
individualisation, not standardisation.
Ultimately that means a transaction between individual customers
and individual employees, using the vastly increased flow of
information available to both. For all the hype about employee
empowerment and being a ‘people business’, very few companies have
delegated genuine decision-making authority to the level of the
individual employee. The parameters for making judgements without
referring up what’s left of the hierarchy are usually tightly
circumscribed.
Implications
Delegating real judgement to permit individualised service would be
a radical departure from the organisational forms prevalent in most
private businesses and all of the public sector today. Indeed, public
services are still in the Model T Ford era, and the debate on
‘standards’ – the adjective ‘high’ is implicit – indicates that nobody is
really thinking beyond standardisation. Yet many people are unlikely
to be satisfied for much longer with the Fordist model as citizens
when as consumers they are increasingly offered the Dell model. And
as consumers they are also increasingly dissatisfied with, say, a
standard call-centre script. They want an individual response. The
information is available to permit it – it is the organisational form
that lags behind.
And understandably so, for this kind of radical organisational
devolution demands a high level of mutual trust between employees
and managers – and ultimately investors and owners. Remember, the
transactions that take place within organisations are those it is too
difficult to transact in a market because of the informational
constraints. Yet it is extremely difficult to monitor the productivity
and quality of a non-standard service inside an organisation too. The
companies that add the most value will be the ones with the highest
levels of internal trust.
174 Demos