Nature can be described as organized in hierarchical systems layers – but that doesn’t mean humans must organize themselves in static hierarchies. There are examples of different ways of organizing people to perform work together.
This post explores three flat and fluid organizations in completely different industries and of vastly different sizes. All of them lack hierarchical management, so how do they thrive? They follow these principles:
- Management is tasks: They think of management as a set of tasks rather than a group of people. Those tasks are broken down and formally distributed among regular workers. Everyone manages but no one is management.
- Transparency and accountability are sacred: Everyone’s performance metrics are made public and anyone can demand an accountability to anyone for their performance.
- Everyone makes decisions, but not everyone is involved in every decision: Workers are free to make decisions about their work without consulting “higher ups” (as there are none). Decision making power is distributed, but decisions are not made by majority vote.
- Make what’s implicit explicit: Topics that are taboo or give room for internal politics in hierarchical organizations (e.g. compensation, natural leadership, allocation of undesirable or highly desirable tasks) are confronted head on and the resulting decisions are made public and binding.
These organizations are living examples of that there are different ways of organizing than the traditional hierarchies. So why do we believe in organizing hierarchically when we can avoid it?
Most of us agree that just because the development process in nature can be described as a Darwinistic process doesn’t mean that we should use Darwinism as a norm to how we organize our society. Why is it then so important to organize ourselves in static hierarchies?
There seems to be a failing normative logic behind Organizational Hierarchism similar to the failing normative logic behind Social Darwinism. It might just be an example of Moore’s naturalistic fallacy; just because something IS in a certain way doesn’t mean that it OUGHT to be that way.
How does the digital transformation of your organization go? According to the global studyÂ DIGITAL TRANSFORMATION: A ROADMAP FOR BILLION-DOLLAR ORGANIZATIONS from CapGemini just 50 of 157 executives say that they have an effective approach. Not an easy task it seems…
But why is this so hard? The report states that
Successful digital transformation comes not from implementing new technologies but from transforming your organization to take advantage of the possibilitiesÂ that new technologies provide. Major digital transformation initiatives are centered on re-envisioning customer experience, operational processes and business models. Companies are changing how functions work, redefining how functions interact, and even evolving the boundaries of the firm.
I couldn’t agree more. But isn’t this difficult? Yes, really! What makes it even more difficult is further described in another conclusion:
Successful DT comes not from creating a new organization, but from reshaping the organization to take advantage of valuable existing strategic assets in new ways.
This means that in order to succeed you have to understand what your valuable existing strategic assets really are and transform your business to leverage them in a digital approach.
I think these statements are correct, are really important and points in the right direction. But judging from my 10+ year experience in working with intelligence, strategy and change in a global company, I see is that this is incredibly difficult to do in practice. Is it really so that as much as 1 in 3 are successful in this process? And to what extent are they successful?
From a historical perspective from other technology driven transformations, there are extremely few companies that have been successful in transforming themselves across societal and technological shifts. How many companies are e g older than 100 years? 100 years ago there was another, albeit a magnitude smaller, technological and societal shift that also required transformation and how many organizations survived that?
We must correlate these insight with other findings e g John Hagel’s analysis of the performance of today’s companies:
Firms in the Standard & Poor’s 500 in 1937 had an average life expectancy of 75 years; a more recent analysis of the S&P 500 showed that the number had dropped to just 15 years.
I think it is time that people reread the former Shell executive Arie de Geus’ book The Living Company,Â Clayton Christensen’s The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do BusinessÂ and Alan Deutchman’sÂ Change or Die: The Three Keys to Change at Work and in Life.
In the end of the executive summary the CapGemini reports correctly states that:
Despite the hype around innovative digital technologies, most companies still have a long way to go in their digital transformation journeys. Leadership is essential. Whether using new or traditional technologies, the key to digital transformationÂ is re-envisioning and driving change in how the company operates. Thatâ€™s a management and people challenge, not just a technology one.
From my view from the outside I still wonder if change really is happening to the extent that people think it does. Because if it does it is against all historical odds. Or are we creating an illusion of change, when in fact organizations are failing more dramatically than ever?
The good thing with this report is that they are starting to formulating the difficulties in a much more realistic way than I have seen before from IT-consultants. And that is a good thing… If they show the correct picture of the reality, I am not at all sure.
We can talk about scenario planning in order to see, understand and manage uncertainty on a longer term planning level but when it comes running the daily business the result of the process i e how we design companies and structures will be the crucial point for the future.
I am again talking about the need to redesign society and businesses and build resilient and shock-managing institutions, rather than slim, lean, efficient and just-in-time structures. Or maybe they can be slim, lean,Â efficientÂ andÂ just-in-time, but ONLY of these properties are helping organizations to be better at managing dramatic and sudden changes. Otherwise this mental heritage (or garbage) of efficiency and just-in-time thinking from an obsolete industrial age will lead to a certain death when the grim reaper of unexpected shocks or changes comes to take his tribute.
One sign of change comes from Toyota who seems to maintain it’s thought leader position when it comes to taking the next level of industrial development into the area of resilience…
Based on the terrible experience of the Japanese earthquake Toyota are now aiming at change their manufacturing and supplier structures with these three steps:
This is really interesting but it is worth noting it is just a part of the solution and just from the perspective of the manufacturing plant. There are much more and deeper work to do in order to make the whole value process around the automotive industry resilient and future ready.
But from a longer term strategic perspective, taking this path, or rather being forced to go down it, could turn out to be as important for the long term future success of Japanese auto manufacturers, as the collective Japanese decision to decrease fuel consumption was in the 1980:s.
Are the Japanese again using their problems and tragedies in order to improve before everybody else does?
Read more in Reuter article.
Is the Wikileaks conflict leading us towards a better and more open future or can it result in the opposite?
The Wikileaks phenomenon in itself is nothing but the natural consequence of Moore’s Law and the emergence of omnipresent and ubiquitous communication and data gathering technologies. It is an effect that is one interpretation of the concept of radical transparency , a situation when there doesn’t exist any barriers for information anymore and where everything is potentially known by everyone.
What Wikileaks really is doing is showing the world a small and relatively isolated (!) glimpse of what radical transparency might mean for governments.
One thing to note is that in the not too distant future we can expect that radical transparency will spread to companies, corporations and basically all other organizations as well.
The bigger picture – towards a completely new society
But what does this mean in the long run?
To understand the bigger picture and where this might lead we also need to add another underlying driving force to the puzzle. The driving force is the result of two distinct human capabilities: our ability to communicate and our capacity to innovate and create tools and structures. When looking back in history with these glasses we can identify this key driving force behind almost all major reorganizations of human society.
With the innovation of many-to-many communication on an individual level it is very likely that we are at a stage of radically transforming human societies once more. If this is the case we are actually part of a shift that will transform our society in a much more fundamental way than the relatively recent change from a farming society into an industrial society. Maybe the shift from an oral society to a text based society will be a more adequate comparison. If we are going to judge from previous reorganizations of humanity we can conclude that the majority of today’s institutions will become obsolete or at least altered in a fundamental way. Including the corporations, nation states and even our cherished model of democracy.
Wikileaks, together with other P2P-related effects, are then just the weak signals lightening the murky path towards a very different future.
How do we get to the future?
The reason for a fundamental shift lies in the conflict of three seemingly incompatible concepts
Democracy and static hierarchies have been working together for the reason that communication have been organized according to a broadcasting model where you have a few dominant broadcasters and accordingly can contain the discussions and the perspectives to a certain degree within a community. If you add radical transparency this isn’t possible anymore and a conflict between these three takes place. The core of the conflict has not so much to do with democracy as has with the other two because the nature of the conflict lies in the fundamental incompatibility between radical transparency and static hierarchic structures and it is quite possible that democracy will be the victim in this conflict (placing nuanced comments by e g Clay Shirky in the naÃ¯ve and idealistic corner).
A couple of years ago I wrote a quick post about how this upcoming conflict between new ways of organizing driven by the Internet and many-to-many communications on one side, and the traditional static and mechanically based institutions (e g governments) built on a broadcasting communications model on the other.
This conflict could be played out in one of four scenarios describing the different structures of conflict this could result in.
The scenarios were:
Which scenario do Wikileaks indicate?
The scale of the current conflict around Wikileaks suggest that scenario 1 is already out of the question. Then we have the other three left.
The rapid escalation of the conflict and the direct involvement of so many actors due to the choice of diplomatic arena, could suggest that Wikileaks is the first step in the chain of events that will lead to scenario 3 – Full scale war.
The force and fury by which mainly the US Government is acting might suggest that we are heading towards scenario 2 – Back in line. Will the other governments across the globe also realize who the real enemy to their position of power is and close their ranks in order to succeed in defending the current power structures â€“ regardless of the consequences for the Internet and sacrificing the fundamental constitutional rights on which the modern democracies are built?
Or maybe this current conflict will be contained and slowly fade out? It could the then lead us towards scenario 4 – Many small wars in different areas at different times…
Any comments on this?
It is a bit weird that it is much more easy to write things in the unstructured and undemanding link stream i e my Tumblr feed, than to write things here. I will try to change that…
For some time I have been thinking about the role of destruction in change processes. That lead me e g to reread Asimov’s Foundation, which I referred to some time ago in this blog.
One of the “natural laws” of civilizational collapse is that there seems to be a causal relation between a civilizational collapse and knowledge destruction. For example when Rome or the Mayan civilization fell, the whole people (which of course didn’t die off and disappear) rather quickly also lost much of their knowledge and skills. Everything from mathematical, engineering and astronomical knowledge to a long row of artistic skills and more advanced farming skills seems to have quickly deteriorated and disappeared as a direct consequence of the fall a common organization.
It is obvious that there is a causal explanation that knowledge destruction could lead to societal collapse, but I am not asking that. My question concern the opposite direction of that causal link: why knowledge destruction follows societal collapse.
Maybe it is obvious to you, but to me this is really a riddle. Why does this happen and what mechanisms are in play here? Why can’t e g a small group of people harbor key pieces of the knowledge and continue to develop it?
When watching a video of a recent and very interesting and insightful talk by Dr Anders Sandberg about Cloud Superintelligence, one possible piece of that puzzle suddenly fell into place. He showed in a clear way why many average people, connected to each other, can create extraordinary results even if there is quite a lot of noise in the system. He basically states that there is a direct relation between the number of individuals communicating to each other and collective group intelligence.
The purpose of his talk is to explain why the cloud is actually creating superintelligence, which we can see in e g wikipedia, but by going that path he also explains how and why communicating groups is achieving better results. And that there is a knee on the curve when the communicating groups are too small and don’t achieve the same level of result.
To me this suggests that the major, and perhaps only, important factor for explaining the loss of knowledge due to societal collapse is that larger groups of people is being scattered into many smaller communicating groups, which, just because they consists of a smaller number of communicating individuals, is losing a lot of their collaborative group intelligence. As a consequence they probably take much worse collaborative decisions when it e g comes to electing leaders, who to collaborate with or how to use the available resources in the best way.
Watch Anders’ talk for yourself and listen to his explanation:
Another consequence of this concerns, if it is true, not the past, but the future and not just that we are on our way to create a Collaborative Superintelligence: modern communication technology (read “the Internet”) might for the first time in history provide us with a capacity to, even if our societies are structurally collapsing, continue communication in sufficiently large groups, which in turn most likely will let us maintain our knowledge and collaborative IQ.
I e IF we succeed in protecting our global communication infrastructure from the defenders of national security (which most often mean their own position of power)…
If anyone is interested in the theories why civilizations fall I can recommend the book Collapse: How Societies Choose to Fail or Succeed by Jared Diamond and of course the important book about group intelligence: Wisdom of Crowds by James Surowiecki.
Don Tapscott, is stating the paradigmatic effect of Internet on the whole society in this short and radical movie. He states that:
- The web is creating a global infrastructure for collaboration (which leads to disruption and confusion)
- As a result, all of our institutions have come to the end of their life-cycle
- The current recession is a crucial punctuation point in human history – the point where we said that we need to reset, the point where the industrial economy has finally run out of gas
- This paradigm shift is creating a crisis of leadership
- The Digital Natives are inheriting this situation – and they think very differently
- Kids are now the authority on many issues
- We have 40 years to re-industrialize the planet
I think he is sort of right and I basically argue something similar, but I try to avoid his mistake of attribute everything to just the Internet. Internet is a really important driving force that shapes a lot of things right now, but both the end of the industrial era and the new challenges we see today is a result of many other important driving forces as well.
But it is a brilliantly short and crispy video with a message:
Many of you readers know that I am skeptical to to future of traditional hierarchies. I believe the huge change that is happening now (again) is that new communications technology is simply creating another playing field for the basic human capacity to organize and solve problems at hand. A field where the model of traditional hierarchic and static institutions is not the given answer for solving problems, as we have been assumed for some years (read “hundreds of years”) now.
Maybe this thought is at last coming through in a more traditional context? Or am I just exaggerating what my mother recently pointed out to me in the latest issue of Time Magazine? On the question on the chaotic situation in the Japanese government Michael Elliott asks:
Yet on Japan serenely sails. It makes you wonder if most of us have still not figured out the question of 1962 [How do they do it?], or if the answer to it is so radical that we miss it. Could it be that an old society is leading us into a postmodern age, one where the world of politics, something that we have assumed for 200 years was the wellspring of national success or failure, is somehow just not that important?
I am aware of that there are (at least in theory) other angles of attack for questioning the relevance and impact of the national political governing system, but Elliott is pointing at an important issue here. We are assuming that the national political system still is a wellspring of national success or failure. I would say that it is much worse than that: we can’t even use the word society today without bringing along a complete system of assumptions containing the dominance of the nation state model and it’s constituting institutions. In all writing that I read, regardless if it is in an academic context or not, I can track these underlying and implicit assumptions. Assumptions that effectively clouds the discussion of how we should go about organizing the society of tomorrow. A society where the nation state may or may not be the fundamental organizing model.
Is publication of Michael Elliott’s short essay a weak signal that this line of thought is on it’s way to breach into the mainstream discussion? Is it just a call in the dark? Or am I filling in too many blanks myself?
Kevin Kelly say something like this in the speech:
“The Internet’s development is really amazing, but strangely enough, we are not amazed?”
Do we really understand what is going on?
The last time I wrote about Kevin Kelly in this forum was when he had been writing an interesting article in Wired about the future of Internet in 2005, 10 years after the year 1995 when Netscape went public â€“ a pivotal year in computing and as I am arguing in human organization. When he spoke at TED last year he actually talked about the same subject but now called “Predicting the next 5,000 days of the web”. Now it is a far better story, but it is essentially the same idea.
I encourage you to see this, but as fascinated you may be think of this:
Technology change is, if it is diffused to a certain level, an unstoppable transformational force. The relation between the different stages is of course very complex and usually nonlinearly directed in both ways. It is usually very difficult to predict what specific effects these transformation will have, but once the process have started, some effects are inevitable. This is especially true with technologies which change the way which individuals communicate, because it changes some of the fundamental capacities we have as humans, the ability to communicate, view ourselves and organize ourselves. The way we communicate basically constitutes what it is to be human. It follows a simple and elementary line of thought:
The problem why we don’t see these changes immediately is that it takes some time to diffuse a technology or a set of technologies into our behavior so that it transforms e g our institutions and other structures. But that doesn’t mean it is not happening.
A way to try to understand the different stages in which technologically induced change happens is to see the sequence of cause and effect over time:
When looking at Google and eBay I use to say that what we used to call Internet in the 1990:s (that is Web 1.0) is now changing the world at an economical level. The next step for that technology is soon the political/regulatory level. And then we have Web 2.0 and social computing as a new level of technology, not even talking about the Internet of Things when we connect billions of artifacts over the globe and let them talk between themselves.
Kelly naturally and wisely stops short of the post-technical changes in his speech, because it is enough to be flabbergasted about the Internet development in it’s own terms â€“ in technical terms by which we are used to talk about machines like computers. Enjoy!