Network Thinking: Connecting What You Learn

Continuing key ideas each Monday from my 2001 book:

Every piece of information you collect is probably meaningless unless you can connect it to the web that you are always building inside your head. Even if you have to stretch your thinking, connect it to something. If you hear that General Motors laid off a number of workers, connect it with the fact that Kodak laid off workers yesterday, or with the quality of the last GM product you purchased or rented, or with the news that GM is opening a plant in Mexico next month. Sometimes you will find an odd pattern linking the new piece of information with something that at first seemed irrelevant.
Once you begin to build information structures in your head, it will come easier. You should always assume that every fact you learn somehow relates to your own mission, your own enterprise. Many times the connection will be hidden, a mystery to figure out. Perhaps ten percent of the time the connection is obvious; maybe another forty percent of the time there is no connection at all. But buried in the fifty percent of the time that there is a less-than-obvious connection there is a gold mine of understanding. If you don’t see any connection immediately, assume there is one and keep mulling it over.
Every article about a successful business, no matter what industry, probably has a lesson for your enterprise. If you run a toy company and hear that teenage boys have a rising interest in reading, somewhere there may be a connection, a lesson, or an opportunity. Don’t worry if you don’t see it right away — but at least give it a try.
We are generally pretty good at looking at building blocks. We can understand bricks and other hard assets. But we are less good at understanding the value of the intangibles and of the linkages. No bricks stand without mortar; nothing moves without joints and tendons. No transactions take place without pipelines, phone lines, and wireless networks. Business dies without networks of people and relationships. Look at Coca-Cola’s stock market value of over $120 billion and compare that with its hard asset (book) value of less than $30 billion. That $90 billion gap is what Coca-Cola’s brand name and its relationship with its distributors and customers (its “network”) is worth.
As we form our understanding of a subject or part of the world, we begin to see how things relate to each other. One way to do this is to think of your industry — whether education, religion, or making pencils — as a game. In your industry, what are the “chance” cards? What are the penalties? Who are the players? How can they help you or hurt you? What are the defining moves, the moves that determine the outcome of the game? What is a “full house” in your industry? What is “Boardwalk” on your Monopoly board?
If you’re in the movie business, you acquire scripts, actors, actresses, and other talent. You go through cycles of production, marketing and distribution, and you end up playing your videocassette and international distribution cards. If you’re in the oil business, three assets matter: oil reserves, refineries, and filling stations. Japan is on the game board as a destination, Kuwait as a source.
If you can think of your business as a game, you can begin to understand it as a whole. Even if you don’t think through a complete game, at least diagram your business on a piece of paper. (Please note that I am not saying business is only a game – it is much more important to people’s lives and aspirations than that.)