The Network Always Wins
At Bookbuzz we are huge fans of Peter Hinssen. “The new normal” was one of our anchor books for quite a while. We have been looking forward to his second book and it does not disappoint. It will become another anchor book in our stable when we work with clients.
It covers 3 core topics that our clients are struggling with; VUCA (volatility, uncertainty, complexity, and ambiguity), innovation and organisational structures.
Are you doomed to fail?
We can safely say that some of the largest corporations are totally clueless about where to go next, suffer from horrible internal politics and inert boardroom cultures, and have given up the hope of transforming their bureaucracies. Companies are no longer smart enough, fast enough, or innovative enough to survive on their own.
In “New Normal”, Hinssen talked about how digital will transform everything. That ship has now sailed. The consequence of digital is that everything gets connected. Which means that everything is networked. Once everything is networked, a lot of things happen. Everything goes faster and network dynamics come into play. Which brings you into the realm of complex adaptive systems.
Networks make things complex (and faster)
Information, intelligence and innovation flow fast through networks. The dynamics in the era of networks seem to be very close to the world of complex adaptive systems structures and organisms found in nature. The key to understanding complex adaptive networks is to focus on understanding the nature of the connections, the strength of the relationships, and the intensity of the information flow in a network.
- Complex systems don’t have a master plan—they evolve, they emerge
- Complex systems are built on connectivity.
- Complexity arises from the interrelationship, interaction, and interconnectivity of all the elements within a system and between a system and its environment.R
- Complex systems evolve in coevolution.
- A complex system exists within an environment, but it is part of that environment.
- Complex systems are not perfect. They are suboptimal.
- A complex adaptive system does not have to be perfect in order to thrive within its environment.
- Complex systems are not designed for optimal efficiency but are based on the concept of perfect enough.
- Complex systems favour variety and diversity. The greater the amount of variety and diversity within the system, the stronger that system can become.
- Complex systems are self-organising. There is no hierarchy of command and control in a complex adaptive system.
- Complex systems evolve on the edge of chaos.
Culture is too slow
A while ago we wrote a post, talking about culture being too slow and that organisational structure is the key to success. Hinssen brings it a lot further than that. You need to become fluid. Fluid strategy, fluid people, fluid organisation. Using network dynamics, the theory of relativity, adaptive and complex system theory, biology, cities, religion (Shiva), Schumpeter (creative destruction), silicon valley, startups, Taleb (anti-fragile) and entropy.
The key message; the static structures of today will have to be reinvented for the age of fluidity. To deal with VUCA we will have to learn the aerodynamics of the era of networks and understand how to build organisations that can thrive in a world that speeds up. Companies will have to get in touch with their inner innovation networks, understand how to turn them into fluidity, and avoid becoming rigid corporate structures. If your market is a network, you need to become a network. A fluid, networked, flat, agile organisation.
He classifies the millennial not as generation Einstein, Y, E, Z or G (=gaming, those for whom the world is too slow), but generation N. The networked generation.
WHAT DO YOU NEED TO DO
If your markets are turning into networks, your organisation needs to turn into a network. The hierarchical network is the least important network. In a world of six degrees of separation, nobody cares about your title, they care about what you do.
You need to apply VACINE
You need to fail forward
Failure is a manifestation of learning and exploration. If you aren’t experiencing failure, then you are making a far worse mistake: you are being driven by the desire to avoid it. And, for leaders especially, this strategy—trying to avoid failure by outthinking it—dooms you to fail. It makes you rigid and that is business suicide.
You need to stay at the edge of chaos
For example, Netflix deliberately and “unexpectedly” sabotages its own systems with the Chaos Monkey algorithm, which kills processes randomly. It haphazardly disables production instances to make sure that they can survive common types of failure without any customer impact. So, by being constantly under fire, its processes grow stronger. And the more frequently failure occurs, the more the organisation learns
You need to know the clock speed of your company
The phrase “Here today, gone tomorrow” has been replaced by “ Here today, gone today. There is an accelerating external clock. So he asks the key question. “What is the internal clock speed of your company?” How fast does it cope with change? Inside your organisation, how quickly does an idea evolve from a brainstorm into a marketable service or product? Internal clock speed itself is irrelevant nowadays. All that matters is whether you’re moving faster than your market: Is your internal clock outpacing the external clock?
You have to find your hidden innovation network
The first thing most large companies will have to do is to rediscover their hidden innovation network and unlock their potential. Industrial Age structures, mechanisms, and strategies aren’t helping them win the hearts and minds of networked workers and customers.
You need to unfreeze your own thinking first
For anyone in a large corporation, in an Industrial Age construct, we wish you all the best in unfreezing your company, your structures, and, perhaps most important, your own thinking.