By Ian Graham, The Code Factory in Ottawa, ON, CYBF Mentor

As the focus of our economy shifts from manufacturing to knowledge and information, business models must change too. Today, businesses are shifting from industrial era hierarchy to the knowledge era open or distributed model. The Starfish and the Spider ( is a great reference book that describes and compares the two business models.

The industrial hierarchy is much like a pyramid with power centralized at the top of the structure and command and control trickling down the organization. This is also known as a waterfall model with power and control flowing from the top down to the base of the pyramid. The hierarchy is the business model of typical large enterprise multi-national corporations.

The open or distributed business model is flat with little or no hierarchy. Wikinomics ( is a great resource that delves into the open, collaborative nature of the knowledge-based business.  Collaboration tools allow these “micro-organizations” to be distributed and dispersed globally with very low cost structures. Smaller and more abundant, micro-organizations have highly specialized skill sets and partner with each other to deliver products or projects in a very fast and cost-efficient manner.

Mastering change going forward means adapting to the emerging open or distributed business model.

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