It Is Time To Become A Network

A few years ago, I wrote a book called The New Normal. It was about the power of digital, and about what happens with consumers and companies once it became normality.

Today we see digital as a given. Yet, what a lot of organizations fail to acknowledge is how it has completely changed their environment. It has empowered their customers to become unfaithful, massively informed and loudly-speaking little tyrants who expect customization and dialogue at the moment they want it.

Peter Hinssen is an author and consultant

In the Web’s networked environment status has completely changed. It is no longer about impressive job titles; it goes to those with the most, and most valuable, connections. The net has changed our world from a hierarchy to a meritocracy. It is a ruthless place — you actually have to be competent to get anywhere.

Today everything is out in the open. Now that access to information is legion, and travels at the speed of light, transparency is the name of the game. But the real power of digital lies in the links created: between consumers and employees; between a stranger with one bedroom too many and one who needs a place to stay; between a sea of information and those looking for something. What digital has done is transform the world into a network. And this network has changed how we work, how we live, how we invest and how we buy.

From my experience working with many companies looking for ways to adapt, most are fully unprepared. They have fancy R&D labs, where geniuses in white coats, working in sealed-off labs, are working on “almost the same as before only slightly better, and possibly more shiny.”

Sustaining innovation alone will not cut it today, not when the next Airbnb, Uber or Netflix is being built in someone’s garage. Most organizations lack the speed to react to these kinds of new incumbents. They fail to see them coming until it is too late.

I love how U.S. Army General Stanley McChrystal, a commander in Afghanistan, put it: “It takes a network to defeat a network.” He was talking about how the flat and fast organization that Al-Qaeda was kept outrunning the very planned and hierarchical U.S. It was up to the U.S. Army to ‘chameleonize’ to their opponent. Organizations faced with an outside networked world need to become a network themselves.

So what are the pillars of a networked organization? Well, first of all it needs to shed its layers and silos. Strict hierarchies, authoritative environments and bureaucratic borders slow down everything.

Companies need to create a flat and dynamic culture of collaboration and sharing. Most traditional players have a long way to go.

Organizations also need to come to terms with the chaotic nature of their markets. We live in a VUCA world, ruled by volatility, uncertainty, complexity and ambiguity. One of my heroes, Douglas Adams, once wrote, “It is a mistake to think you can solve any major problems just with potatoes.”

Trying to fight the unpredictability of our industries and competition with strict planning and standard models is absurd. Do we still need to plan? Are strategies still relevant? Of course, but they need to be adaptive. They need to be flexible, and organizations need to be able to turn them on a dime.

Organizations need to connect to become a network. Not just by breaking down internal barriers and developing multiple and fast links inside an organization, but by connecting with partners of all kinds: complementary organizations or even completely unrelated companies that might have struggled with a similar product development issue and were able to solve it. And let’s not forget forging bonds with customers who increasingly like to be involved as well.

I don’t mean all of this in a unicorns and rainbows kind of manner. The plain truth is that we are all dumbing down. Compared with the “knowable” universe which might very well be exploding faster than the universe is expanding, individuals know less and less. So we have no other choice but to make our brains smarter by “mind-melding” with other colleagues, customers and organizations, with those that have other talents and insights. Looking out for number one will no longer do.

I realize that many organizations will be scared by this approach. You have to be bold. You have to take risks. That’s why I love the concept of ‘failing fast.’ It’s a method with which start-ups are most familiar. You try new things on a small scale, learn and move on to greener pastures if they fail to deliver.

I realize that all of the above will sound alarming to the readers of this essay, who are mostly from a highly-regulated environment focused on compliance, security and efficiency.

Open traffic of information and insights, transparency, intensive collaboration with the outside, flat environments and radical innovation might seem foreign, even impossible.

But the financial industry is being disrupted as we speak and competition is coming from the most unexpected sides: Google’s mobile wallet, Bitcoin, crowdfunding platforms or Vodafone offering lending activities. And that’s just the beginning. Carrying on as is will no longer do.

It is time to become a network.