The rise of modular process networks

John Hagel and I gave the two keynotes at the Silicon Valley KM Cluster last week. Hagel is a true thought leader in the intersection of technology and business strategy, with landmark books including Net Worth, that in 1999 described the currently still-emerging phenomenon of “infomediaries”, and Out of the Box, on how web services are transforming business. His new book, The Only Sustainable Edge, co-written with John Seely Brown, describes how value creation and innovation are increasingly happening at the edges of organizations, economies, and markets. At the event Hagel talked about “modular process networks”, in which business processes and activities become increasingly modular, and are brought together dynamically from throughout the network. In an excellent overview article (and in the book) the authors describe how the motorcycle industry in Chongqing, China, can now make a quality motorcycle for less than $200 by implementing standardized, modular design across an ecosystem of manufacturers and suppliers. China currently produces around 50% of motorcycles worldwide. While John and I use different language and frameworks, the messages in my book Living Networks and that I am currently preaching on modularization, integration, and global innovation networks are based on very similar premises. Executives should pay careful attention to Hagel’s vision of the future of business.