The Network Effect is the effect that a user of a good or service has on the its value to other users. For example, when the telephone was invented, there were only two, Bell’s and Watson’s. Its usefulness was very limited because there was no one else to call. But as more people and businesses started getting phones, the value increased exponentially. It was the same thing with email; its value to a user was meaningless in the beginning, but as friends, family and business associates got on it, the value became immense.
You can think about it mathematically. If there are only two people on a given network, each user can only communicate with one user (the other guy). If there are four users, each person can connect with three others for a total of 12 connections, still limited. But once you jump to 25 users, the number of possible connections rises to 576 (the formula is n x (n-1). At 500 users, the number rises to almost 250,000 connections.
So how can this benefit you and your employees? Let’s say you have 150 employees at your location. If everyone had free and open communications with each other, there would be 22,350 possible lines of communication enabling them to share news, information, ideas, problems and important company information. The good news is that you’re probably part of the way there by using email and similar tools. But do all of your employees have company email? If not, you’re cutting a portion of them out of a vital information source. And even for those with email, do they have transparent access to all the information you want them to see, can they react to it in a reportable way so that you can view trends, can they share the information easily with co-workers? Can they form workgroups for projects and problem solving? Can they communicate with each other regardless of device (smartphone, tablets, etc.) and physical location?
We’ve all seen the powerful benefits that can be derived from social networks like Facebook, LinkedIn and Twitter. Imagine how much more alive and vibrant your organization would be if everyone was connected together with tools that fit your business. The benefits I see include:
• The ability for you to communicate all company information to EVERY employee.
• The ability to have employees react to that information and for you to see the resulting trends.
• A true current-like flow of information back and forth and between everyone in the company.
• Employees’ ability to reach out instantly to the right person to solve a problem or help others solve theirs.
• The ability of employees to get to know each other better and take advantage of each others’ strengths.
• A community-building effect that strengthens the company and lowers employee turnover.
• Better engagement among all levels of employees.
• An organization that runs leaner and develops processes, products and services faster and more efficiently.
• Less overlap between departments.
• Lowering of departmental boundaries and dissolving of silos.
This is the organization of the future. We are in beta testing on products that will get us all there. If this sounds interesting to you and you’d like to participate in the future with us in beta testing, please contact us.