Laurie has just launched a new blog on Governance in a Networked World. He notes that it’s important to find the right scope and topic for a blog, and I think this is a fantastic one. As I wrote in releasing Chapter 3 of Living Networks, governance is perhaps the most important perspective on how organizations need to deal with a networked world. There are certainly risks to be understood and dealt with, but there are also opportunities that must be recognized and addressed. Business and government leaders are abrogating their responsibilities if they do not engage with the issues raised by our hyperconnected, networked world. Laurie says on his inaugural post:

Now to the governance bit. The old conglomerates grew up in an era when hierarchical control was the order of the day. Decision making necessarily travelled up and down the chain of command. Governance was all "top down". Today many of the conglomerates have largely disappeared. Organisational structures have been flattened to facilitate agility and faster decision making. And governance systems have done what? Have they changed substantially at all? The focus is still top down control. The expectation is that senior management can "control" everything. In my view the networked business environment has worked against senior management's ability to "control" the business. I believe the paradigm has shifted from one of "control" to one of "influence". Until governance mechanisms are adapted to this change I believe they will continue to add cost and reduce value to the very organisations that they are trying to help.

Every chapter of Living Networks is being released on this blog as a free download, together with commentary and updated perspectives since its original publication in 2002.

For the full Table of Contents and free chapter downloads see the Living Networks website or the Book Launch/ Preface to the Anniversary Edition.

Living Networks - Chapter 2: Emerging Technologies
How Standards and Integration Are Driving Business Strategy

OVERVIEW: Standards are the foundation of communication, and of all networks. Building on the existing foundation of powerful standards and connectivity, there are three sets of emerging technologies that are driving the next stage of the networks: XML and web services; peer-to-peer; and network interfaces. In the connected economy, standards and network strategy are at the heart of all business.

Chapter 2 of Living Networks - Commentary and updated perspectives

It would seem likely that a chapter written in 2002 about emerging technologies would date very quickly. However the emphasis of this chapter was on standards and integration, which have absolutely been at the foundation of technological change over the last five years, and continue to be firmly at the center of what dominates technology today.

The (very) gradual shift to open, accepted standards (see below in the text for explanation)

I selected three sets of emerging technologies to focus on in this chapter: XML and web services, Peer-to-peer networks, and Network interfaces.

There has been less talk about peer-to-peer networks today than five years ago, but the concept underlies how the Internet is evolving. The five domains for peer-to-peer domains I described remain totally relevant: Distributed content, Distributed computation, Collaboration, Distributed processes, and Markets. My definition of Web 2.0 is “distributed technologies, built to integrate, that collectively transform mass participation into valuable emergent outcomes.” The value of what the Internet has become today is that it is almost fully decentralized. Technologies are distributed, with single applications rarely trying to do everything required on their own. They are built to integrate, to draw on other applications, and often to be available to other applications, forming a peer-level network of data and applications.

What I called ‘the interfaces that merge people and technology’ are still fundamental to our future. I have more recently spoken and being interviewed about the current state of our interfaces with technology and the potential they hold. Despite the rise of voice recognition and video glasses, we are far from transcending clunky keyboards, and the true merging of humans and machines is yet to happen.

When we launched Living Networks, the idea that most captured the imagination of the media was ‘proximity dating’, leading to interviews on national breakfast television and substantial newspaper coverage. While I have been interviewed many times about mobile social networks over the last five years, their prime time is yet to come. However the next year or two is likely to see broad adoption, as social networks transcend computers and shift to mobile devices.

The final section of the chapter is on Standards and Network Strategy. While business strategists now often implicitly understand these concepts, standards strategy is rarely fully thought through by major organizations.

The diagram at the beginning of this post illustrates the shift to open, accepted standards. In the chapter I wrote:

Since the trend to open, accepted standards is clear, it is far better to go with it rather than fight it. Long-term success must be based on aligning yourself with these shifts. Over time, the greatest rewards will go to those who provide effective leadership towards standards, while implementing clear strategies on how they are positioned and create value within the unfolding landscape.

The shifts in attitude of Microsoft, IBM, Google, and others demonstrate that this position is now pretty well accepted. Strategy needs to unfold within this playing space.

The examples I used in my four action steps for developing network strategies included Flash, the Amex Blue card, instant messaging interoperability, Bluetooth, FXall and the Xbox. There are any number of new case studies that could be used, with HD and HD disk standards among the most visible. I think a useful addition to the literature over the last years has been The Slow Pace of Fast Change by Chakravorti, which examines how game theory can be applied to standards strategy, however the fundamentals transcend any specific technology or epoch.

Every chapter of Living Networks is being released on this blog as a free download, together with commentary and updated perspectives since its original publication in 2002.

For the full Table of Contents and free chapter downloads see the Living Networks website or the Book Launch/ Preface to the Anniversary Edition.

Living Networks - Chapter 1: The Networks Come Alive
What the Changing Flow of Information and Ideas Means for Business

OVERVIEW: Connectivity is shrinking our world, and in the process transforming business. As communication between people becomes more fluid and pervasive, it is creating what looks like a global brain, in which ideas procreate freely and we collaborate to filter an ever-expanding universe of information. But just a small proportion of the planet’s population is connected. It is critical that we extend participation as broadly as we can.

Chapter 1 of Living Networks - Commentary and updated perspectives

As for almost all the book, the underlying messages in Chapter 1 are as relevant today as they were over five years ago. The five key issues outlined at the outset: collaboration with clients and partners; organizational performance; innovation and intellectual property; strategy and positioning; and individual leadership are still today the most relevant issues for business in our extraordinarily networked world.

The opening words of Living Networks were “Macromedia, the company best known for Flash software, is blogging.” In 2002 companies were already using blogs to communicate more effectively with their customers. After the launch of the book, in my speeches I used the story of how this initial foray into blogging evolved, with Macromedia (since bought by Adobe) aggregating now almost 2000 approved blogs, including those of its staff, partners, and customers. This entire community spanning inside and outside the organization is engaged in a conversation on how to use the software tools, bugs, fixes, and useful approaches.

Early in the chapter I used an example of how I had made and met a friend on another continent though online forums. Today the soaring growth of social networks means these kinds of encounters are happening far more frequently. However the principles remain the same, especially in how digital connections often migrate to face-to-face relationships.

I then introduced the idea of “micro-messages,” illustrated with the example of SMS and instant messaging. This has certainly come a long way further, with today Twitter, Jaiku, Seesmic, and many other tools being used extensively for almost constant communication between the connected. In fact the term “micro-blogging” is now often used to refer to these services.

What I described as “the sexual life of ideas” has become a meme in its own right, with many people taking the concept and using it in new ways.

I have believed deeply since the mid-1990s in collaborative filtering. Iin Living Networks I went so far as to head the section on the topic “Collaborative Filtering Saves Humanity!” Today we can still understand much of Web 2.0 in these terms, as reflected in my Web 2.0 framework and other blog posts. In the book I used the example of Slashdot, which can be seen today as the forerunner of a host of similar sites such as Digg, Netscape, and Reddit that are becoming central to how people find and consume news. One of my phrases expresses what I have consistently communicated over the last years:

The highly interlinked nature of weblogs means that they are in themselves a powerful form of collaborative filtering. What is most interesting and worthwhile quickly becomes most visible.

The concept of ‘We, the media’ has come a long way since I wrote about it in 2002, with a book by that title coming out two years later, and a massive rise in what I already described then as ‘participatory media’. Our Future of Media Report 2006 contained a strategic framework that has been downloaded well over 100,000 times now, drawing on the original ideas by depicting the symbiosis of mainstream and social media.

The issues raised in the final section of Chapter 1, on the limits of the networks, are more current than ever. As value shifts to the connected world of the ‘flow economy’, there is an increasing risk that the gap between the haves and have nots will widen, based on whether or not people have access to the networked world. Initiatives such as One Laptop Per Child and Grameen Phone’s initiatives, that I wrote about in Chapter 1, are certainly helping. However there is far more to be done in ensuring as much as possible of the world’s population has the access and education to participate and truly benefit from the wonders of the living networks.

The book is available for purchase on Amazon.com and other major booksellers. In addition every chapter of the book will be available for free download from this blog and the Living Networks book website. Over the next weeks I will serialize the chapters on this blog, with commentary and updates for each chapter with the benefits of over five years of hindsight. So just come back to the blog or Living Networks website regularly or subscribe on your RSS reader. Below is the table of contents and Preface to the Anniversary Edition, which describes in more detail the background to the relaunch.

Living Networks - Table Of Contents

Preface to the Anniversary Edition
Chapter 1 - The Networks Come Alive: What the Changing Flow of Information and Ideas Means For Business
Chapter 2 - Emerging Technologies: How Standards and Integration Are Driving Business Strategy
Chapter 3 - The New Organization: Leadership Across Blurring Boundaries
Chapter 4 - Relationship Rules: Building Trust and Attention in the Tangled Web
Chapter 5 - Distributed Innovation: Intellectual Property in a Collaborative World
Chapter 6 - Network Presence: Harnessing the Flow of Marketing, Customer Feedback, and Knowledge
Chapter 7 - The Flow Economy: Opportunities and Risks in the New Convergence
Chapter 8 - Next Generation Content Distribution: Creating Value When Digital Products Flow Freely
Chapter 9 - The Flow of Services: Reframing Digital and Professional Services
Chapter 10 - Liberating Individuals: Network Strategy for Free Agents
Chapter 11 - Future Networks: The Evolution of Business

Preface to the Anniversary Edition

It is fascinating to reflect on the five years that have passed since Living Networks was first published in November 2002. In many ways that was the dawning of the age of networks, though by then it hadn’t yet been widely recognized. In those days the idea that the networks were coming to life was a pretty radical idea. Today many people simply nod in immediate understanding at the concept of the living networks.

Soon after the publication of Living Networks, the emergence of Friendster, MySpace, LinkedIn, and Facebook – to name just a few among a vast proliferation of social networks –provided literally hundreds of millions of people across the planet with a direct, personal experience of the rise of a networked world.

The first words of Living Networks were about how companies were using blogs. Since I first came across blogs I have believed they were a transformative tool. Certainly the intervening years have borne that out, with now over 100 million blogs existing worldwide, and blogs now comprising over 20% of the 100 most popular online media sites. My own blog Trends in the Living Networks (rossdawsonblog.com), launched five years ago to accompany this book, has been central to the extremely pleasing growth of my companies.

Organizational network analysis, which I described in Chapter 6, has since become a mainstream business tool. The success of the University of Virginia’s Network Roundtable, a consortium of 100 leading organizations where I am now a research leader, has demonstrated the power of network approaches to improving performance across business and government.

Living Networks is founded on extensive examples and case studies of actual corporate practice. It's interesting to see that many of the stories I used are still very current. Some of the most prominent business books out in the last year, including Wikinomics, The Starfish and the Spider, and Open Business Models, have used many of the same case studies that I did five years earlier. Stories such as Canadian miner Goldcorp’s use of open source approaches, Collabnet, Innocentive, Procter & Gamble’s Connect & Develop program, and many others described in Living Networks are still viewed as cutting-edge examples years later. “We the Media,” a section title in Chapter 1 of Living Networks, was later used as the title for a book.

So why am I relaunching Living Networks now? In hindsight, the book came out before most people were ready for the message, and in the depths of the dot-com bust. As such, the book probably didn't get the attention it might have if it were released a year or two later.

Five years after it was first published, certainly some of the value of relaunching Living Networks is as an historical document, in seeing where things stood as the networks were being born.

In some ways the world has moved on substantially over the last five years. The rise of what is now called Web 2.0, assisted by new technologies including AJAX, has changed the nature of the Internet. The landscape of digital rights management has changed dramatically from the playing field of 2002. Software-based services have progressed substantially over the last five years. Word of mouth marketing has become an entire industry with its own assocation.

However much of what was covered in Living Networks is still at least as relevant today as five years ago. Standards strategy is shaping industry structure more than ever. The power of distributed innovation is even more compelling today, and still barely tapped by most corporations. In our hyper-connected economy, trust, relationships, and personalization only increase in importance. Participative strategy development is finally becoming a common approach to strategy and leadership. The free agent economy is becoming ever-more enabled by the living networks as years go by.

The flow economy framework for business strategy I proposed in Chapter 7 is if anything even more relevant and useful today than five years ago, as many of my clients have discovered. Most importantly, collaboration across boundaries is becoming increasingly critical to the future of business, making executives’ attitudes to this issue absolutely central to their success.

Two years ago I founded Future Exploration Network, what is now a global strategy and events company that helps organizations understand – and create – the long-term future of business. Much of my speaking and consulting work today is about the future of business.

Journalists love to find out what ‘futurists’ have predicted in the past so they can see how right – or wrong! – they were. In Chapter 11 of Living Networks I made 10 predictions for the future of business. Many of the predictions were long-term, so we can’t

I am finding it very tiresome to continuously hear security consultants and vendors with big PR budgets go on endlessly about risks, without ever mentioning business benefits. This drone gets into executives’ heads, and as a result discussion of social networks – and many other potentially valuable business tools – focuses on risk and not benefit.

My Enterprise 2.0 Governance Framework explicitly addresses risks, benefits, and actions. It is critical to acknowledge, understand, and minimize risk, but executives are equally culpable if they ignore business value as if they ignore risk.

In the interview with the journalist I basically said that transparency increases business value, however providing transparency must be done intelligently and strategically. The danger is that executives become frightened of the risks, so unintelligently don’t provide transparency, and thus negatively impact the company’s value. Effective business leaders understand that in a complex world business value requires a highly nuanced approach, rather than the black and white view of organizations that is so frequently peddled. Excerpts from the article are below:

When one of Australia’s leading evangelists for Enterprise 2.0 acknowledges “there are some real dangers in an increasingly transparent world”, it’s worth listening.

Ross Dawson, chairman of the Future Exploration Network, is a great fan of online collaboration and communication, but admits there are limits. While research has revealed “a positive impact on stock prices where there is more transparency”, he warns that companies which transparently reported their customers’ private information, for example, would quickly see the opposite effect on share prices.

“Clearly, if people want to deliberately steal information there are no fail-safe devices, but you can marke it harder. But then there is inadvertent information loss - where people chat on Facebook, for example, and create something that is visible outside the company.

“Organisations need to think far more explicitly about what information they want to protect, what information to share with trusted partners, and what to disseminate freely.” According to Dawson, once an organisation has identified these three tiers of information it can put in policies and systems to corral them.

He says that some organisations are already doing this – citing Westpac, which allows employees to use Facebook for collaboration and communication, but blocks access to some of the widgets in order to reduce the chance of information being too widely distributed.

Last year I was quoted in CIO magazine on similar issues, and described in more detail the implications of this framework for information boundaries in Defining information boundaries provides a fundamental platform for organizational strategy.

Today’s article goes on to quote a ‘security consultant’ and security product vendor who unsurprisingly harp on about dire risks. This is worth putting into context from Forrester's recent report (excerpted in ReadWriteWeb) which predicts that companies will spend $2 billion on social networking tools by 2013.

Later in the story I am quoted as saying:

People who use social networking tools indiscrimately certainly need to consider what information they put on public display, according to Ross Dawson. “Everyone needs to understand that anything online is visible for ever more.”

This is pretty basic stuff now. I was recently quoted in the women’s magazine Madison on how we can expect the intimate details of our lives to be visible. This is a reality. The key issue is education, so young and old understand this and act accordingly. However I think the message has already pretty much got through.

However the announcement gives absolutely no information on how the ranking is calculated or the sources used. There are bold, completely unsubstantiated claims:
- MORE SOURCES: Alexa rankings are now based on more sources of data to give a better indicator of website popularity
- BETTER RANKINGS: The rankings are an even better indication of website popularity due to new and improved algorithms

Alexa has been much criticized for the inaccuracy of its rankings system, which until now has relied entirely on picking up the web browsing activities of those who have installed its toolbar. This is a skewed population, and there are various ways to game the system.

While I don’t necessarily expect Alexa to reveal its exact algorithms, I think people would be far more likely to have confidence in its measures if it gave at least some indication of what the new sources are, or what they look like, or what changes to the algorithm were made. In fact we know less now about how the Alexa rankings are compiled than we did before. Alexa think they’re better. I guess I think they’re better, since I’m ranked higher. But why should anyone else believe they’re better? Tell us please, oh Alexa, just something that supports your claims that Alexa is improved…