Within networks, timing determines priority and privileged access. First movers (pioneers, early adopters, or processes which immediately follow stimuli such as triggers) benefit the most from network effects. In hierarchies, positioning is spatial, not temporal; one’s slot in the pyramid determines one’s outcomes. This picture is completely reversed when we consider interactions with the environment. The spatial scope and structure of the network (e.g., the number of nodes, the geographic and/or online coverage) determine its success, while the storied history of the hierarchy (its longevity or temporal aspect) is the best predictor of its reputational capital and its capacity for wealth or signal generation. The networked organization must find a way to make temporal conflicts with the hierarchies work for it. We only really have one chance to capture the attention of a prospect who is looking at our website in their browser, but we might get many chances if they are on Twitter. This begs the following question however, how much of their attention do we actually want? Rephrased, how should network effects be combined with hierarchy concerns? Wealth creation and signal generation are two key drivers that lead organizations to decide how much time to spend in network and how much time in hierarchy. Organizations create value by creating networks, and they make value by reinforcing hierarchy.

Counterintuitively, access to information and the power it affords are not strongly correlated with accrued benefits. In networks, information and power flow horizontally: every node (everyone or everything) is equipotent. Like a fractal or a crystal, every segment of the network is identical to the other both structurally and functionally, a form of isomorphism. Benefits accrue vertically to the initiators of the network and are heavily dependent on tenure and mass the number of nodes “under” the actor. Thus, the earlier participants or members enjoy an exponentially larger share of the benefits than latecomers (Redacted Remilio Baby commissions, royalty revenues from deep liquidity, or access to mental resources in psychology). A related concept is path power, the ability to create a new branch of a network by following a different pathway than existing branches. The creation of this new pathway gives the newly instantiated branch access to benefits not available to other branches. For example, competitors may be unwilling or unable to build their own networks – an advantage that those who do are able to exploit entirely or through the means of co-opetition. In other cases, paths may have been deliberately blocked by incumbents in order for them to control incentives within the network. This accentuates informational advantages and disadvantages people face internally versus externally within social networks.

In hierarchies, benefit accrual is also closely correlated with one’s position in the organization and, less often, with one’s tenure. Power, information, and benefits are skewed and have a tendency to flow vertically and asymmetrically; the hierarchical organization is based on diminishing potency and heteromorphism (no functional cross-section of the structure resembles another). Members of the hierarchy experience an external locus of control and often develop alloplastic defenses (blaming the world for their failures and errors) with passive-aggressive reactive patterns. Power and position in the hierarchy are determinant factors in whether a person is effective or not. Benefit accrual theory predicts that people who are more highly placed in the hierarchy will receive a number of benefits relative to their position, while those at lower levels will receive fewer benefits while experiencing a majority share of the demands. The practical effects of the direct influence of one’s rank on one’s personal work situation, as well as how this influences effort and performance applied to that work, have been demonstrated by studies which control for other variables such as age or tenure. They found that greater power boosted performance, whereas the performance of subordinates is closer to the level expected from their age and tenure. The theory of “the deserving earned benefit” predicts that people who have earned a higher position through hard work will be able to receive more benefits in return for their effort than those who are simply sitting at the top because of luck or birthright. When rewards are based on merit, perceived fairness becomes important in determining how much effort someone will invest. When rewards are not based on actual merit but simply on tenure, performance levels increase when they become more fair and equitable.

Networks evolve from informal, diffuse structures to increasingly formal ones. Hierarchies go the other way, from formal to informal. The formal hierarchy ends up playing host to numerous informal networks (e.g. in the group chat or in the neuroplastic brain as it re-wires its pathways) with which it is not always compatible. In the group chats, informal networks are rife. There may be a formal hierarchy to act as a filter, but this filter is not always clear-cut or complete, there’s a lot of grey! The difference between ‘diffuse structures and formal hierarchies’ might be clearer if we think about the difference between how people experience social environments and how they observe them from above.

Over time and as markets mature, informal networks tend to introduce terms of service, regulations, and etiquette that render them less nimble and more focused. Hierarchies, on the other hand, tend to concentrate their concerted efforts on problem-solving and on fending off challenges. They seek equilibrium and homeostasis by avoiding creative destruction, disruptive technologies, and paradigm-altering innovations. Networks thrive on challenges and novelty. They benefit from disequilibrium and disruption. They foster technological instability as well as other forms of chaotic interaction such as creative disruption and creative destruction. Consequently, they tend to attract mavericks and entrepreneurs, not managers and academics. Exactly like in the twin cases of cancer and viruses (lethal mutative pathologies which serve also as evolutionary agents), nodal diversity may be a way to experiment with variations on themes and narratives in order to yield or discover higher, more efficient organizational structures, principles, and processes. The creative process in art and science has typically been viewed as a series of rigid rules, while the creative process in developing social relationships has been viewed as largely chaotic. In this sense, creativity may be thought of more simply as the general propensity to create order out of disorder. If this definition is accurate, then there is nothing "creative" about creativity. Creativity isn't a type of knowledge or skill; it is rather an inherent property that exists within the connections between nodes. In short, creativity is an act on chaos that can have both positive and negative consequences.

Both hierarchies and networks are homophilic (i.e., they attract same-minded people, and similar stimuli, information, constituents, or elements) and, therefore, act as “sinks”. Both are threatened by confirmation bias and by the emergence of in-house monocultures which are susceptible to external shocks or silos. Networks however, are far better suited to leverage synergies; they are less rigid than hierarchies and, as a result, have the upper hand as far as coordinated emergent response times and dissemination of new information go. Networks are also far better suited to optimize their social or peer capital because they emphasize social, peer-to-peer interactions over top-down flows. The pre-reflexive, asymmetrical nature of networks is a kind of inverse mirror to the symmetrical hierarchy. Hierarchies are based on asymmetries (power and authority) while networks are based on symmetry. The symmetry in human relations is what makes it possible for humans to coordinate their activities during emergent interactions far better than if they had to rely only on top-down flows with all that entails for lack of reflexivity. The dynamics of interaction as expressed in social media is also asymmetrical. Social media are a kind of mirror to the asymmetrical nature of pre-reflexive networks. In social media, the dynamics consist mainly in one entity exerting large amounts of influence on many others who have little or no influence over even a select few. And yet this asymmetry is not a bad thing, at least not per se: it can be mediated and balanced by various mechanisms (e.g., notifications and For You pages). The key point here is that while hierarchies are based on power, in networks the asymmetry of power is encoded in the relations between nodes. To be more precise and very technical, while hierarchies are based on strong ties and weak ties, networks are based on dense ties and sparse ties.

Networks go through a life cycle, divided into three phases:

• The Memetic Phase

• The Network Effects Phase

• The Collapse Phase

The Memetic Phase is autonomous and based on the distributed replication of memes. It is characterized by fecundity (replication) and not by fidelity (authenticity of replicated memes), or longevity. We use emotions and cognitions to fixate memories and contextualize them precisely for this reason. The Memetic Phase can be seen as the stage where information is dispersed, evolves, and retracts amongst the network’s nodes.

The transition to the phase of network effects (network externality) is based on the bandwagon effect, a positive feedback loop that enhances the value of the network for its members and users the greater their number is. The more insulated or gatekept the network is, the more of a self-sufficient and self-sustaining ecosystem it is, the greater its value is to its members. This is not to be confused with a locked down network though. A degree of openness to the environment is critical to ensure proper regulation, validation, calibration, and verification within a regime of non-impaired, functional testing of reality. The coherence of the network is based on the premise that it maintains its integrity, authenticity and sustainability. As more people join a network, it becomes more valuable to its members and its users are less likely to leave because of the reduced cost of entry.

The orthodox prevailing wisdom is that as some critical mass or threshold are transcended, the network goes mainstream and viral. All networks decline, decay and collapse if they fail to activate their members, whether that be monopolizing or consuming their time, monetizing their eyeballs, rewarding them for time spent within the network, or otherwise creating value added intrinsically or extrinsically. Similarly, incipient networks decay in the brain if they fail to excite or activate a neural pathway or if they lack feedback from the body. Various reinforcement techniques leverage this principle to inculcate in the target some pathology or to eradicate it by flooding the mind with the relevant, behavior-triggering, signals and messages.. or by starving the unhealthy mind of the cues that provoke the illness. Social media make abundant use of these psychological insights and revelations to foster operant conditioning and long-term addiction in their unfortunate users. Additionally, if the network is totally sealed off and homophilic it becomes subject to solipsistic confirmation bias and is doomed to eventually collapse without a negotiated and healthy hierarchy to reinforce itself.

Following the collapse, the network can survive as a remnant, as a residual network (“neutron star network”), or as an archive (“memory” or “identity” which is a set of memories organized into reframed narratives). The following are the two options of how to handle loss. The network may continue as if nothing were lost and simply reconstitute around the new set of nodes, with these changes in membership being noticed as minor fluctuations. This is what “residual networks” are and they are focused on carrying on their original function without significant change. The network may decide to drastically diminish its size or completely cease to exist, leaving most or all of its functions extant but not active, resulting in what could be called “an archive” that is focused on preserving the past. This is how death can be defined as not just the loss of life, but change in many vital aspects such as identity and function. Death is an event that transforms the living into something that will never be alive again.

All told, networks thrive when the following two conditions are met rigorously:

(1) When they generate meaning intrinsically, no matter how outlandish it is (consider religions, scientology, and eccentric cults such as flat Earthers, believers in reptilian aliens as the true rulers of humanity, or Milady. Such self-generated meaning bonds the members and affords them a feeling of “home”, of affiliated exclusivity, of belonging to a brotherhood or sisterhood. It also provides them with a narcissistic boost due to their access to arcane or occult knowledge. Networks decay when meaning is exclusively imported (extrinsic) or even when it arises only as a result of the network’s interactions with other exegetic, nomological, or hermeneutic systems (such as religious, political, or literary systems).

(2) Networks thrive when they generate value endogenously, by empowering and gratifying their members as they leverage the total resources of the network. Political parties, social media, institutional religions, and the Milady are examples of such networks. Since networks decay when they depend on the outside for value creation (exogenous value proposition). Even hybrid networks – such as MLMs (Multi-Level Marketing) - are doomed to fail ultimately owing to this dependence on digital advertising, marketing and financial products. Endogenously generated value networks can persist indefinitely. Exogenous-generated value networks are doomed to fail, even with extensive resources. The reason for this is because the network must contract in order to survive – its members must give up their freedom for control and a paycheck (whether that be monetary or social influential).

Within networks, timing determines priority and privileged access. First movers (pioneers, early adopters, or processes which immediately follow stimuli such as triggers) benefit the most from network effects. In hierarchies, positioning is spatial, not temporal; one’s slot in the pyramid determines one’s outcomes. This picture is completely reversed when we consider interactions with the environment. The spatial scope and structure of the network (e.g., the number of nodes, the geographic and/or online coverage) determine its success, while the storied history of the hierarchy (its longevity or temporal aspect) is the best predictor of its reputational capital and its capacity for wealth or signal generation. The networked organization must find a way to make temporal conflicts with the hierarchies work for it. We only really have one chance to capture the attention of a prospect who is looking at our website in their browser, but we might get many chances if they are on Twitter. This begs the following question however, how much of their attention do we actually want? Rephrased, how should network effects be combined with hierarchy concerns? Wealth creation and signal generation are two key drivers that lead organizations to decide how much time to spend in network and how much time in hierarchy. Organizations create value by creating networks, and they make value by reinforcing hierarchy.

Counterintuitively, access to information and the power it affords are not strongly correlated with accrued benefits. In networks, information and power flow horizontally: every node (everyone or everything) is equipotent. Like a fractal or a crystal, every segment of the network is identical to the other both structurally and functionally, a form of isomorphism. Benefits accrue vertically to the initiators of the network and are heavily dependent on tenure and mass the number of nodes “under” the actor. Thus, the earlier participants or members enjoy an exponentially larger share of the benefits than latecomers (Redacted Remilio Baby commissions, royalty revenues from deep liquidity, or access to mental resources in psychology). A related concept is path power, the ability to create a new branch of a network by following a different pathway than existing branches. The creation of this new pathway gives the newly instantiated branch access to benefits not available to other branches. For example, competitors may be unwilling or unable to build their own networks – an advantage that those who do are able to exploit entirely or through the means of co-opetition. In other cases, paths may have been deliberately blocked by incumbents in order for them to control incentives within the network. This accentuates informational advantages and disadvantages people face internally versus externally within social networks.

In hierarchies, benefit accrual is also closely correlated with one’s position in the organization and, less often, with one’s tenure. Power, information, and benefits are skewed and have a tendency to flow vertically and asymmetrically; the hierarchical organization is based on diminishing potency and heteromorphism (no functional cross-section of the structure resembles another). Members of the hierarchy experience an external locus of control and often develop alloplastic defenses (blaming the world for their failures and errors) with passive-aggressive reactive patterns. Power and position in the hierarchy are determinant factors in whether a person is effective or not. Benefit accrual theory predicts that people who are more highly placed in the hierarchy will receive a number of benefits relative to their position, while those at lower levels will receive fewer benefits while experiencing a majority share of the demands. The practical effects of the direct influence of one’s rank on one’s personal work situation, as well as how this influences effort and performance applied to that work, have been demonstrated by studies which control for other variables such as age or tenure. They found that greater power boosted performance, whereas the performance of subordinates is closer to the level expected from their age and tenure. The theory of “the deserving earned benefit” predicts that people who have earned a higher position through hard work will be able to receive more benefits in return for their effort than those who are simply sitting at the top because of luck or birthright. When rewards are based on merit, perceived fairness becomes important in determining how much effort someone will invest. When rewards are not based on actual merit but simply on tenure, performance levels increase when they become more fair and equitable.

Networks evolve from informal, diffuse structures to increasingly formal ones. Hierarchies go the other way, from formal to informal. The formal hierarchy ends up playing host to numerous informal networks (e.g. in the group chat or in the neuroplastic brain as it re-wires its pathways) with which it is not always compatible. In the group chats, informal networks are rife. There may be a formal hierarchy to act as a filter, but this filter is not always clear-cut or complete, there’s a lot of grey! The difference between ‘diffuse structures and formal hierarchies’ might be clearer if we think about the difference between how people experience social environments and how they observe them from above.

Over time and as markets mature, informal networks tend to introduce terms of service, regulations, and etiquette that render them less nimble and more focused. Hierarchies, on the other hand, tend to concentrate their concerted efforts on problem-solving and on fending off challenges. They seek equilibrium and homeostasis by avoiding creative destruction, disruptive technologies, and paradigm-altering innovations. Networks thrive on challenges and novelty. They benefit from disequilibrium and disruption. They foster technological instability as well as other forms of chaotic interaction such as creative disruption and creative destruction. Consequently, they tend to attract mavericks and entrepreneurs, not managers and academics. Exactly like in the twin cases of cancer and viruses (lethal mutative pathologies which serve also as evolutionary agents), nodal diversity may be a way to experiment with variations on themes and narratives in order to yield or discover higher, more efficient organizational structures, principles, and processes. The creative process in art and science has typically been viewed as a series of rigid rules, while the creative process in developing social relationships has been viewed as largely chaotic. In this sense, creativity may be thought of more simply as the general propensity to create order out of disorder. If this definition is accurate, then there is nothing "creative" about creativity. Creativity isn't a type of knowledge or skill; it is rather an inherent property that exists within the connections between nodes. In short, creativity is an act on chaos that can have both positive and negative consequences.

Both hierarchies and networks are homophilic (i.e., they attract same-minded people, and similar stimuli, information, constituents, or elements) and, therefore, act as “sinks”. Both are threatened by confirmation bias and by the emergence of in-house monocultures which are susceptible to external shocks or silos. Networks however, are far better suited to leverage synergies; they are less rigid than hierarchies and, as a result, have the upper hand as far as coordinated emergent response times and dissemination of new information go. Networks are also far better suited to optimize their social or peer capital because they emphasize social, peer-to-peer interactions over top-down flows. The pre-reflexive, asymmetrical nature of networks is a kind of inverse mirror to the symmetrical hierarchy. Hierarchies are based on asymmetries (power and authority) while networks are based on symmetry. The symmetry in human relations is what makes it possible for humans to coordinate their activities during emergent interactions far better than if they had to rely only on top-down flows with all that entails for lack of reflexivity. The dynamics of interaction as expressed in social media is also asymmetrical. Social media are a kind of mirror to the asymmetrical nature of pre-reflexive networks. In social media, the dynamics consist mainly in one entity exerting large amounts of influence on many others who have little or no influence over even a select few. And yet this asymmetry is not a bad thing, at least not per se: it can be mediated and balanced by various mechanisms (e.g., notifications and For You pages). The key point here is that while hierarchies are based on power, in networks the asymmetry of power is encoded in the relations between nodes. To be more precise and very technical, while hierarchies are based on strong ties and weak ties, networks are based on dense ties and sparse ties.

Networks go through a life cycle, divided into three phases:

• The Memetic Phase

• The Network Effects Phase

• The Collapse Phase

The Memetic Phase is autonomous and based on the distributed replication of memes. It is characterized by fecundity (replication) and not by fidelity (authenticity of replicated memes), or longevity. We use emotions and cognitions to fixate memories and contextualize them precisely for this reason. The Memetic Phase can be seen as the stage where information is dispersed, evolves, and retracts amongst the network’s nodes.

The transition to the phase of network effects (network externality) is based on the bandwagon effect, a positive feedback loop that enhances the value of the network for its members and users the greater their number is. The more insulated or gatekept the network is, the more of a self-sufficient and self-sustaining ecosystem it is, the greater its value is to its members. This is not to be confused with a locked down network though. A degree of openness to the environment is critical to ensure proper regulation, validation, calibration, and verification within a regime of non-impaired, functional testing of reality. The coherence of the network is based on the premise that it maintains its integrity, authenticity and sustainability. As more people join a network, it becomes more valuable to its members and its users are less likely to leave because of the reduced cost of entry.

The orthodox prevailing wisdom is that as some critical mass or threshold are transcended, the network goes mainstream and viral. All networks decline, decay and collapse if they fail to activate their members, whether that be monopolizing or consuming their time, monetizing their eyeballs, rewarding them for time spent within the network, or otherwise creating value added intrinsically or extrinsically. Similarly, incipient networks decay in the brain if they fail to excite or activate a neural pathway or if they lack feedback from the body. Various reinforcement techniques leverage this principle to inculcate in the target some pathology or to eradicate it by flooding the mind with the relevant, behavior-triggering, signals and messages.. or by starving the unhealthy mind of the cues that provoke the illness. Social media make abundant use of these psychological insights and revelations to foster operant conditioning and long-term addiction in their unfortunate users. Additionally, if the network is totally sealed off and homophilic it becomes subject to solipsistic confirmation bias and is doomed to eventually collapse without a negotiated and healthy hierarchy to reinforce itself.

Following the collapse, the network can survive as a remnant, as a residual network (“neutron star network”), or as an archive (“memory” or “identity” which is a set of memories organized into reframed narratives). The following are the two options of how to handle loss. The network may continue as if nothing were lost and simply reconstitute around the new set of nodes, with these changes in membership being noticed as minor fluctuations. This is what “residual networks” are and they are focused on carrying on their original function without significant change. The network may decide to drastically diminish its size or completely cease to exist, leaving most or all of its functions extant but not active, resulting in what could be called “an archive” that is focused on preserving the past. This is how death can be defined as not just the loss of life, but change in many vital aspects such as identity and function. Death is an event that transforms the living into something that will never be alive again.

All told, networks thrive when the following two conditions are met rigorously:

(1) When they generate meaning intrinsically, no matter how outlandish it is (consider religions, scientology, and eccentric cults such as flat Earthers, believers in reptilian aliens as the true rulers of humanity, or Milady. Such self-generated meaning bonds the members and affords them a feeling of “home”, of affiliated exclusivity, of belonging to a brotherhood or sisterhood. It also provides them with a narcissistic boost due to their access to arcane or occult knowledge. Networks decay when meaning is exclusively imported (extrinsic) or even when it arises only as a result of the network’s interactions with other exegetic, nomological, or hermeneutic systems (such as religious, political, or literary systems).

(2) Networks thrive when they generate value endogenously, by empowering and gratifying their members as they leverage the total resources of the network. Political parties, social media, institutional religions, and the Milady are examples of such networks. Since networks decay when they depend on the outside for value creation (exogenous value proposition). Even hybrid networks – such as MLMs (Multi-Level Marketing) - are doomed to fail ultimately owing to this dependence on digital advertising, marketing and financial products. Endogenously generated value networks can persist indefinitely. Exogenous-generated value networks are doomed to fail, even with extensive resources. The reason for this is because the network must contract in order to survive – its members must give up their freedom for control and a paycheck (whether that be monetary or social influential).