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Can you keep a secret?

THE key to keeping the BHP/Billiton mega-merger under wraps apparently all came down to a retro communications strategy.

As details of the deal (and the cloak and dagger work required to put it together in secret) have trickled out it has been revealed that the impressive veil of silence over the corporate marriage had a lot to do with adopting a “very ’70s” communication protocol.

Apparently, early on, BHP CEO Paul Anderson, made it clear to his staff, and those in Billiton, that all communication on the merger not done face-to-face was to be by phone or fax – no e-mail.

And after giving this anachronistic instruction a moment’s thought you’d have to say it was a spectacular success.

Go analogue and you can control the flow. When the information moves digitally anything can happen, it can – and often will – take on a life of its own.

Just what you don’t want when the wrong piece of information could scuttle negotiations completely or slash billions off your bargaining position.

Return to the technology of the good old days and the movement of information becomes manageable; for a start you can actually see it moving, it leaves some footprints.

Each season’s virus attack reinforces just how slippery and speedy (digital) information can be. Ideas like six degrees of separation look more and more like they belong in a period drama rather than today’s networked world.

A more appropriate way of thinking about information and communication flows now might be Metcalfe’s Law.

Bob Metcalfe, being an engineer, reduced his big idea to a punchy little formula: n x (n-1) or n2 – n. For those of you who, like me, are innumerate and are still awake this catchy little string captures beautifully just what happens when a communications network really starts pumping.

It works on the assumption that the real value of a network increases as the number of people connected to it increases, in fact its value increases with each additional connected person far more quickly than just adding another warm body would suggest.

If “n” is the number of people on the network and the value of the each connected person is $1 to each user then a network with 10 users has a total value of a little less than $100.

Using the same base value – of each additional user being worth $1 to every existing connected person – a network with 100 is worth roughly $10,000.

A tenfold increase in the size of the network leads to a hundredfold increase in its value.

What Metcalfe doesn’t go into is how the value grows further when you can move massive files across the world almost instantaneously with a couple of keystrokes of your computer. Our postal network can be a pretty handy system but being locked into the object-based universe limits it severely.

Paul Anderson may not know about Metcalfe’s Law but he knew the Billiton negotiations were one occasion when he did not want even a whiff of the efficiencies it shows a digital network can deliver to moving information.

n Peter Morris is Principal of Telesis Communications, a technology strategy consultancy firm – www.telesis.com.au or contact: morris@telesis.com.au.

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