A novel organizational model through virtualization

Revolving Door
Revolving Door

Some years ago, I was watching a debate at the TV, and a journalist said that “all in life is politics”. When I heard that, I begin to think that if you are a technician you can have lived nothing.

I cannot agree with that sentence, because, politics is the matter that analyzes and develops the public affairs, and, most of time is spent by people occupied in their own private ones, however, the journalist’s sentence is showing that relationships are increasing its importance in the recent times. We are moving from a world where value was created by personal work to a world where value is created through relationships. Although this can be seem odd it is the result of the development of the knowledge society. When production activities are more driven by the brain instead of the muscles, there is a need to recover and share information. Information is a product itself and it can be sold and purchased.

I would say that today, it is not true that “all in life is politics” but it is true that “all in life tends to be based on information exchange”. The business model of a consultancy firm is in fact this one. A consultancy firm sells knowledge (or information) instead of physical work, knowledge that has been acquired by the education and the experience of its employees.

Knowledge can be added in a group. In a group of people the knowledge inside the group is, at least, the addition of the knowledge of its members. The creation of knowledge networks is an activity that provides a lot of value. The know-how is not an alone asset of a company. The “who knows” is too.

In a knowledge society, any organization must gather knowledge enough to make any task. Competitiveness is not only due to the knowledge of the employees, but its capability to get external knowledge to provide different tasks. If external network turns into a competitive advantage, it should be protected making it more permanent. This is usually done in a formal way through partnership agreements, or through merges related to vertical integration for a greater level of stability.

However, there is another way to produce the same effect when there is not a possibility to reach agreements between organizations. Another possibility is to establish links among people at different organizations. Communication channels among people let to share knowledge and experiences that can be used by an organization to provide a solution for its market.

Without entering the crime world with industrial espionage, many things in all organizations are done because an employee has a friend that could give him an idea to solve a problem. I would not say that the value is provided by friendship but the value is provided by the knowledge of a friend. This fact is very important to be noticed because it can be a reason for an increase of complexity.

Not all in life is politics, but politicians know this fact from many years ago. Current politics is not a matter of ideas like politics in the nineteenth and twentieth century. It is a matter of people and links among people. Political organizations are more competitive if they are spread through all the civil society, because it can gather more information for its decision making centers and have support from other organizations to their policies. This shows that current politics is not a matter of winning political debates but a matter of promotion of their people for every position, especially for every position where much information can be gathered. One of the clear examples is the increasing of the revolving doors between public and private sector. This kind of organization can be considered a virtual organization in front of the scheme of partnership or vertical integration that would be a formal one. Revolving doors are a response to the need of sharing information between different organizations but they are a bad solution that shows the inability of political parties to attract people with knowledge at different organizations to a shared objective.

This behavior has an important inconvenient that I have shown before. The value of a solution provided by the network is not the link itself but the knowledge that the link can provide. Political promotion of people without personal value is very different to the establishment of friend relationships with people that has that personal knowledge. Structure should not be built assigning knowledge to links but to creating links to the knowledge. The latter way is a natural one but the former one will introduce excessive complexity into our organization because you are adding a new node that will have to create additional links to the real knowledge in that organization.

A business can take advantage of the virtual organization. Friendly people has been always well considered among human resources professionals because they can create a network of contacts that can produce a leverage of its own knowledge and then a leverage of the knowledge useful for the company. A virtual organization is created when the value of the extra knowledge is used in both directions.  However, it is very important to notice that there is a strong difference between taking advantage of this virtual structure in a natural way and creating it in an artificial one.


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