Peter Hinssen

If you want to outrun the ‘network’, you have to become a network

Peter Hinssen Peter Hinssen is serieondernemer, medeoprichter van Nexxworks, lid van de raad van bestuur bij Delaware Consulting en auteur van het boek 'The Network always wins'.

I wrote a book called the ‘New Normal’ where I describe how digital has become ‘normality’. Digital used to be something special, and older people will still remember when digital was a real adjective. Young people don’t. Everything is digital. Analog is the exception.

I wrote a book called the ‘New Normal’ where I describe how digital has become ‘normality’. Digital used to be something special, and older people will still remember when digital was a real adjective. Young people don’t. Everything is digital. Analog is the exception.

It’s amazing to see how quickly digital has become the ‘New Normal’. Frightening as well. Most companies are now realizing that their top-down structures, hierarchies and control systems are incapable of dealing with these massive changes, and constant flux of innovations.

But the biggest shift is not that the world has become digital, but even more fundamental than that, markets are turning into networks of intelligence.

Markets are becoming Networks of Information
Today consumers have become extremely informed networked thinkers. Consumers will seek information, will seek advice, and will get informed by their peers, which are easy to reach. They will trust each other more than some commercial message aired or played on TV or Radio. Consumers have become overloaded with information, and have found each other. They trust the network more than they trust your brand or your messages.

The customer is at the heart of the new experience economy. The Arab’s Spring of marketing that has occurred in the last decade means we have to take the customer seriously, and can no longer treat them as faceless, nameless consumers. I think this is irreversible. Markets are disappearing, and being replaced by networks. Markets have become networks. Networks of intelligence.

This will be one of the biggest challenges of companies in the next years. How to deal with consumers in a world of information flux, to respond to markets which have become networks of information.

How fast is your bus ?
Things happen faster every day. Trends materialize faster every day. Novelties wear off sooner, old news gets old faster every day. Speed is the game, and the whole world seems caught up in an ever-faster pace, a circle of increasing velocity. The reason is simple: innovation flows faster in a network, and when markets become networks the rate of change accelerates.

“If everything seems under control, you’re just not going fast enough”, is one of my favorite quotes by Mario Andretti. One of my favorite movies of yesteryear was ‘Speed’ where Sandra Bullock and Keanu Reeves were trying to keep the speed of a rigged bus over 50 miles per hour, or it would explode. But ask yourself this question: how fast do you need to keep driving the bus of your company in order to keep surviving? Most companies are beginning to think they’re not driving their bus fast enough.

When markets become networks, companies will have to become networks as well
My fundamental belief is that organizations will not be able to ‘outrun’ the network of change, if they don’t become networks themselves.

We have come at the end of an era of management and organizational design. Most of our ‘modern’ management techniques stem from the industrial revolution where we designed companies on the basis of structure, efficiency and discipline. Not on agility, or speed, or flux. We have built organizations in the top-down hierarchical fashion, which proved to work perfectly well in the era where companies moved faster than markets. But they prove to be worthless in the New Normal where networks rule.

The next generation of the workforce has a head start on this. In my opinion it’s relatively unimportant that the next gen has digital skills, this has become a commodity. But it is vital to realize that the next generation understands ‘networking’ much better than the previous generation. It’s because they fundamentally ‘get’ LinkedIn, Facebook, Pinterest or Twitter which makes them much more suited to the future of organizations.

The future is about Liquid Organizations
We’re witnessing the end of the ‘Era of the Org Chart’. Top down structures are incapable of dealing with the constant flux, hierarchies are proving impractical in an era where networking is the new reality.

When the outside world becomes a network, organizations will have to learn to behave like networks as well. The traditional mechanisms for managing and structuring companies is at a dead end, and organizations will have to re-invent themselves in the age of network business models.

Organizational boundaries and structures become obsolete when network thinking prevails, and companies will have to become networks of innovation in order to survive.

This means that companies will need a mechanism for strategic thinking that is agile and ‘fluid’ enough, to result in ‘Liquid’ organizations, capable of adapting to the beat of the age of networks. When strategy becomes liquid, companies will have to become ‘Fluid’.

We are privileged observers of one of the biggest shifts in how organizations will be designed, built and run. But be prepared to abandon everything you’ve been taught in business school about strategy, structures, control and organizations. Be prepared for a world where markets become networks. Be prepared to burn your org-charts. The future will be about Liquid organizations. The network has won.

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