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Rypple’s Daniel Debow on the Corporate Shift from Hierarchy to Social Network

Daniel Debow, co-founder and co-CEO of Rypple, describes how the old hierarchal model of business is being replaced by a model that resembles the social graph, the networking model popularized by Facebook that describes how people, places, trends, and other factors relate to each other. Also appearing in this video: Deborah Hopkins, Chief Innovation Officer, Citi.

Debow: The model that is embedded in a lot of business software today is not an accurate model anymore of what a company is. I think that’s why the graph is a powerful tool. So before Rypple, I was part of building a company called Workbrain, it was a traditional enterprise software company, Citigroup used it, Walmart, Target, Best Buy. And we used to track time for millions of employees, figure out how to pay them, schedule them and things like that. And at the core of one of the things that we had to do was to build a model of this business, that’s what the software’s trying to do. And underneath that model was this thing called the org chart. There’s org charting tools and it’s a dominant metaphor for how people inside companies think about what they’re doing in their company. Think about how many meetings are spent trying to re-org the org chart, designing, moving those same charts around? But it’s not the same graph that’s being drawn on that wall in Facebook; it’s a hierarchy. There’s the general at the top—sorry, it’s the CEO at the top—but that’s where it came from, right? It’s the military. And they move themselves down and there’s this idea of “we have this army.”  The problem is that that model is actually pretty outdated. Even in the military it’s outdated.  The military has moved to network-centric operations where they’re trying to devolve decision-making to the edge because things move really fast in combat today. The most fast-moving businesses, the most agile businesses stopped thinking about themselves as an org chart. And it doesn’t mean that they have abandoned hierarchy; they still have the decision-making authority vested in people by nature of their title, but it’s just that it’s a lot less relevant.

So then the question is okay, well, if that’s embedded in SAP and Oracle, it’s embedded in every piece of business software that’s out there, this dominant metaphor of the org chart, then what’s next? And I think, to your intro, it’s a graph. It’s a graph of relationships and influences. It’s a graph of all sorts of data about the organization that people are part of. And just to sort of wrap up on this bit, a lot of the problems with enterprise software is that it’s really hard to load in that model, the org chart, and then as soon as you load it in, things start to change. Half the business software out there is like, “Well, it doesn’t really accurately represent the team that I’m on. Yeah, it has me in that org, but really I’m working on this team for the next two months.” And that’s a function of the bad model that’s underlying that business software. And I think that’s pretty endemic for most 1.0 business software. It’s all about that org chart and I think we’ve moved to a network-centric model of what a company is.

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