Peter Hinssen: the network always wins

Our marketplaces are becoming networks, and so our companies need to become networks to survive, argues New Normal author Peter Hinssen

WARNING: Liveblogging – prone to error and inaccuracy. Will be updated/improved over the next 48 hours.

Most of the audience here at NEXT Berlin come from the analogue world – by age, at least. Technology was very simple back when we started out. We are the last generation who will find typewriter-based jokes funny. 10 years olds will never understand them.

Technology is hot. The new power cribs of technology – Apple and Amazon’s iconic buildings under construction – show who are the defining companies now. Technology has become relevant. Obamacare has been a failure – not as a programme, but as a technology.

The Atlantic has written about the touch-screen generation. Children put Amazon URLs on letters to Santa. For the new generation, work is that brief period where that have to go and use old technology.

We’re about to be thrown into the deep end of technology. Can you swim? Will you survive? With cars, the advertising flipped from the technology to the uses of technology. That will happen with digital tech, too. We have nomophobia – the fear of being out of cellphone contact. The happiest people in this room have a full battery and five bars of signal…

The VUCA world

We’re in the VUCA world – Volatile, Uncertain, Complex and Ambiguous.

Strategy becomes fluid – five year plans are changed twice a year. There’s an external clock in many markets that’s going faster and faster, while the internal clock – the rate of change within your organisation – isn’t keeping up. If that’s the case, you’re in trouble.

Information flowing through networks makes that network feel alive. Information is rich and visual, and is the fuel of the economy. Information used to be ponds or reservoirs, but now it’s a river. We need to make sense of that.

Other people are already do so. A 25-year old Vietnamese American woman is making a fortune doing YouTube make-up videos. Marketing in this age is not adding another channel to the mix – it’s completely rethinking what you do for the new stream.

Networks survive networks

This is a scary time. When markets turn into networks, companies will have to become networks as well. Most companies are very, very hierarchical right now. The org chart is the worst instrument of torture we’ve invented. It’s a relic of the industrial age, and it’s no longer fit for purpose.

It takes a network to fight a network” said the commander of US forces in Afghanistan. If markets become networks, then you need to be one to survive.

In Silicon Valley, if you don’t have a garage you’re worthless. Where else will you start a company? And that mindset is what’s letting the companies in that area disrupt pretty much every form of business you can think of. AirBnB is delivering 180,000 beds every night. They’re sucking those beds out of the traditional industry – and they’re doing it with 3 IT people, managing the Amazon Web Service contract.

Are you built to last?

Why did Polaroid go out of business? Did they miss digital? No. But every digital business model proposed to the board had lower margins than their existing models – and they were addicted to those margins.

Don’t overdo strategy. “Everyone has a strategy. Until they punch you in the mouth,” said Mike Tyson – that’s a good motto for business in the new normal. Leaders need charisma, and the ability to take risk. And you have to radiate that out through the organisation.

We need to understand the patterns, the math, the algorithms behind the flow of information through the network. Information is becoming truly alive – and the network always wins.