Networks, councils, and teams are not a new idea in business. Too often they are set up with good intentions, but not well-designed, or they are allowed to outlive their purpose. When these horizontal teams are empowered to deliver business results and designed and staffed properly, they can provide both agility and leverage. However, designing effective lateral organization is more than bringing people together around a goal. Lateral capability is built through the artful arrangement of roles, decision authority, management processes, reward systems, and leadership know-how. We see three ways to structure interactions among the operating units and between the center and the field, as illustrated in the figure below.

network blog

On the left, we see point-to-point interactions that usually result from strong personal networks and good working relationships. They are not sufficient to make the right connections.

To address this, many organizations create centers of expertise or center-based groups tasked with leading global initiatives and moving information, ideas, and talent across the operating units. This commonly turns into a hub-and-spoke system, illustrated in the middle of the figure above. Unfortunately, these center groups tend to become bottlenecks with all information flowing through corporate with little of the energy or speed harnessed that is inherent in peer-to-peer contact.

The network, shown to the right, combines the best of both of these models. It is characterized by center groups that have a very clear charter. These center-based groups need to demonstrate that they can:

  • Listen and connect—lead internal and external research, find and share knowledge, turn data into actionable insights, and connect operating units together.
  • Build infrastructure—use the scale of the company to invest in shared systems, databases, and service platforms; remove obstacles so that operating units can focus.
  • Align and empower—convene and lead the discussions for alignment on strategic direction, brand parameters, time horizons, common systems and processes, and big initiatives.
  • Model collaborative leadership—provide the tools and forums for co-designing high-impact solutions.

In a true network, the center has an important role, but it is not the dominant role. Leadership is often rotated in robust, global networks. An operating unit or function in the network often assumes the lead when it has a major stake in the outcome, has the talent to lead the work, and is willing to invest resources. Some businesses or regions within the network may commit to launch the new product or brand idea early in the process and share in the funding. Others may play other roles, like serving as a test market for the new idea. While some operating units in the network may completely opt out of a given initiative, other units may pick up the content once it is developed and adapt it locally. These relationships are built on trust and a culture of collaboration.

The value of networks is that they start with the work to be done and use a reconfigurable set of roles to assign the right level of attention and involvement. Resources flow to the work. Rather than trying to create static responsibilities and decision rights (e.g., a marketer at the regional level always plays such and such a role), the responsibilities go with the role one is playing on a given initiative.


Amy Kates and Greg Kesler

Managing Partners