Peter Hinssen tells us that markets are disappearing. Quickly becoming networks of information, if we want to understand the customer of the future, we need to understand markets. In becoming a network organization, one can understand new patterns, cultures, and behaviors that will be necessary going into the future.
The Age of Uncertainty
The world is rapidly changing, Hinssen says that the future is characterized by four things: Volatility, Uncertainty, Complexity, and Ambiguity. Together Hinssen calls these things VUCA. Because of these things, there isn’t one model that will hold perfectly for the future. Business strategies should be fluid and flexible and will need to be updated frequently.
Hinssen uses the acronym VACINE to help companies remember the principles needed to survive the future.
- V is for velocity. Companies need to move quickly
- A is for agility. Companies need to be fast, swift, and flexible
- C is for creativity. Companies must stay creative to stay relevant
- I Is for innovation. Companies must develop new ways to solve problems
- N is for network. Companies need to be able to influence the network.
- E is for experimentation. Companies need to continuously try and learn from new ideas.
Today’s world is a complex system. To understand complex systems, they need to be observed as a whole. Society is rapidly becoming entirely networks, therefore we cannot continue to treat our lives as mere linear systems. Here are some things you need to understand a world of complex systems:
- Complex systems emerge without a master plan.
- Complex systems are connected both within a system and between a system and its environment.
- Complex systems co-evolve between the system and its environment.
- Complex systems are not perfect. They are not designed for optimal efficiency.
- Complex systems favor variety and diversity.
- Complex systems are self-organizing. There is no hierarchy.
Technology Takes Over
In the age of networks, we must change the way we think about marketing. Before, marketing was a one-way conversation from producers to consumers. The company simply told the market what they were offering. Now, consumers are involved. They are able to influence what they see, hear, and read in the network around them. They are directly interacting. With companies like Amazon and Netflix it is easy to see how customers impact the networks. In their case, the customer is being recommended products based on their previous history.
Strategy for the Age of Networks
To thrive in the age of networks, companies must get in touch with the network, understand what makes them fluid, and above all avoid rigid corporate structures. Fluidity is important too. Fluid organizations are able to easily adapt to market trends and changing customer behavior. Organizations have three parts that must sync.
- The core innovation network. The essential network of people who make innovation happen
- The social network, which is a group of people who work together, relate to one another, and spend a lot of time together.
- The structured network, which determines who does what and who reports to whom
Companies must sync these three parts as well as connect to consumers, influence networks of information, and understand network behaviors. As the world continues to operate more and more like a network. Hinssen tells us that with these steps, we will always be able to compete in the world of networks.