Network companies and company networks: Christof Horn at TEDxStuttgart
The speaker introduces "dity" as the combination of dynamics and complexity, arguing that current technological distributions move organizational structures from centralized, hierarchical models to flexible, knowledge-based networks. This shift requires replacing rigid organizational charts with dynamic networking models focused on relationships, trust, and distributed intelligence. The ultimate recommendation is to build organizational capability to manage change rather than attempting to control it.
## Speakers & Context
- Unnamed speaker presenting on "dity."
- The speaker is aware of time constraints, noting the TED allotted 18 minutes for a presentation originally designed for 60 minutes, requiring speaking at "double speed" and skipping slides.
- The presentation moves from analyzing simple product parts to complex global systems like connected cars and social media trends.
## Theses & Positions
- **Dity** (Dynamics + Complexity) is a difficult combination: things are speeding up and becoming more complicated.
- Efficiency drives dity, exemplified by a single car part being usable in dozens of different models (e.g., Golf 2 to Golf 7).
- Innovation creates dity, shifting focus from measurable quality (PPM) to intangible metrics like customer experience.
- The global economy is shifting from "planned capitalism" to a "distributed capitalism."
- Traditional organizational structures (Org Charts) are suited for stable, slow-moving regions, but are inadequate for turbulent or chaotic systems.
- The critical pattern to break is the definition of ownership ("what's inside a box"); the future must focus on **relationships** (networks) rather than boundaries.
- Organizations must manage communication, shared governance, and trust, as these are the currencies of a network.
- True leadership is not command and control, but "enabling," which requires building the organization's *capability* to adapt.
- Embracing dity means accepting a loss of traditional control and planning in exchange for flexibility, agility, and daily surprises.
## Concepts & Definitions
- **Dity:** A combination of Dynamics and Complexity.
- **Connected Car:** A car offering more than just a physical product; it requires operating a service.
- **Distributed Capitalism:** A model where capability and production are spread out and available to nearly anyone, contrasting with centralized production.
- **Org Chart (Organizational Chart):** A structure defining roles, showing hierarchy, and limiting scope (What I can do vs. what is outside my responsibility).
- **Network:** Defined by the relationships between entities, people, or teams, representing how ideas are exchanged, not just how decisions are made.
- **Fractal Way:** A method of organizing an enterprise that allows scaling and finding decisions in a distributed manner, rather than centralizing all information.
## Mechanisms & Processes
- **Modern Car Design:** Moving from single-use parts (Golf 2) to highly adaptable parts used in many models (Golf 7).
- **Connected Car Model:** Requires operating a service, placing the entity "in the middle of a network of Apple and Google and other and small companies," rather than controlling the supply chain.
- **Social Influence Cascade:** Social hype (e.g., Gangnam Style video) can affect real industries (e.g., British Airways flight planning).
- **Organizational Shift:** Moving from centralized production/information flow to distributed, accessible creation.
- **Network Management:** Requires managing communication, shared governance, and defining the network's identity and purpose.
- **Intelligence Location:** Determining whether intelligence resides in the *people* or in the *system*, suggesting human intelligence is more flexible (e.g., allowing multiple "bosses").
## Timeline & Sequence
- **Past/Static Organization:** Defined by departments, hierarchy, and clear roles (Org Charts).
- **Transition Period:** Organizations struggle to adapt rigid structures to new realities.
- **Chaotic/Turbulent System:** Characterized by "multiple Futures" and "moving targets," making prediction impossible.
- **Future State:** A network structure capable of handling constant change.
## Named Entities
- **Golf 2** — Example of an older, single-use product.
- **Golf 7** — Example of a modern, adaptable product.
- **Apple and Google** — Examples of major companies defining modern service networks.
- **British Airways** — Example of an industry reacting to social hype.
- **Gangnam Style** — Cultural example demonstrating how social media hype drives real-world industry planning.
## Numbers & Data
- Ted time allotment: **18 minutes** (for a talk designed for **60 minutes**).
- Gangnam Style views/reach: Reached **1 billion** views in **6 months**.
- Social connection metric: **510** (average number of friends/links on Facebook).
## Examples & Cases
- **Car Parts:** A single part used in one car (old model) vs. a single part used in ~50 different cars (new model).
- **Connected Car:** Transitioning from selling a physical product to operating a service.
- **Gangnam Style Hype:** Hype translating to real business decisions (British Airways planning).
- **Traditional Org Chart:** Defines possession and limitations ("what's inside a box").
- **Network Visualization:** Comparing the rigidity of an Org Chart to the fluid representation of a network.
## Tools, Tech & Products
- **World Wide Web:** Technology enabling distributed networking.
- **Connected Car:** Product/service type representing modern network integration.
- **Or C Chart:** Traditional organizational diagram tool.
- **Network:** The concept/model representing interconnected relationships.
## Trade-offs & Alternatives
- **Organization Type Trade-off:** Stable/Planned Capitalism (Predictable, controlled) vs. Distributed/Chaotic (Flexible, unpredictable).
- **Organizational Focus Trade-off:** Defining boundaries (What's *mine*) vs. Defining relationships (How things *communicate*).
- **Leadership Model Trade-off:** Command and Control vs. Enabling Trust.
- **Security vs. Flexibility:** Gaining local fit and agility by losing central control and standardization.
## Counterarguments & Caveats
- The assumption that processes written down are followed: Systems are often "much smarter than we are" and bypass documented processes.
- "Don't touch a winning system" is true, but the necessity is to find where to "break the patterns."
## Methodology
- Analyzing the transition of economic organizing principles from centralized industrial models to distributed network models.
- Conceptual framing: Moving from defining *possession* (the box) to defining *relation* (the network).
## Conclusions & Recommendations
- **Recommendation:** Organizations must find ways to adapt their structure to reality by building capability for change.
- **Solution:** Implementing a network model where intelligence is distributed across relationships, not contained within departments.
- **Action Items:** Focus on managing communication, shared governance, and building trust between people, not functions.
## Implications & Consequences
- **Loss of Control:** Accepting that absolute control, transparency, and planning are lost when complexity is embraced.
- **Gain:** Gaining daily surprise and adaptability ("when dity enters your life it's like having birthday daily on a daily basis").
- **Revisiting Basics:** Questioning why there must be only one boss, why there must be only one Org Chart, and why standardization is always necessary.
## Verbatim Moments
- *"dity is a combination of Dynamics and complexity so things are speeding up and things get more complicated and the combination of both is quite tricky."*
- *"The Simplicity on the one side that you have only one part creates a dity on the other part that means that processes and design and decision making is much more complex."*
- *"you're not offering anymore a product that you just give to the customer but you have to operate a service."*
- *"the Box defines what's outside my responsibility."*
- *"we are used to that sort of of Arc chart we know that and the underlying concepts are these the first concept is it's me..."*
- *"the more important concept is this one the Box defines what's outside my responsibility and there's the concept number three that defines what's on the top and what's the bottom line so it's about social status."*
- *"what happens if we go to the regime of turbulent or even chaotic systems so we have multiple Futures it could be like this it could be like that and we don't know which one of the Futures it will be."*
- *"the pattern we have to break is that in future we have to look on the Rel relationships so it's not about what's inside a box but it's about how these boxes communicate correspond how they exchange ideas how they find decisions."*
- *"if you put the intelligence in the people you can rethink a lot of all the old rules for example why does a person just have to have one boss why can't he have two bosses one for money one for something else."*
- *"it's about enabling it's about a capability."*
- *"when dity enters your life it's like having birthday daily on a daily basis."*