Hierarchies are obsolete

Your hierarchy is the smallest & least valuable part of your network – Simon Terry

Hierarchies may technically be networks, but they are merely simple branching ones. They work well when information flows mostly in one direction: down. Hierarchies are good for command and control. They are handy to get things done in small groups. But hierarchies are rather useless to create, innovate, or change.

org-chart-dennisonImage: Richard Dennison

We have known for quite a while that hierarchies are ineffective when things get complex. Matrix Management was an attempt to address the weakness of organizational silos resulting from simple, branching hierarchies. I remember in 1992 working on a capital project that required 17 signatures in order to proceed to the next step. By the time all the issues from each signatory, a high ranking officer in the hierarchy, were addressed, the situation had changed and we had achieved nothing, other than producing a lot of paper. During my 12 months on the project, no progress at all was made. In fact, the project later died. This was matrix management at defence headquarters.

Any hierarchy, even one wrapped in matrices, becomes an immovable beast as soon as it is created. The only way to get real change in a hierarchical organization is to create a new hierarchy. This is why reorganizations are so popular; and so ineffective. Most organizations still deal with complexity through reorganization. Just think of the last time a new CEO came in to “fix” a large corporation.

We trained hard, but it seemed that every time we were beginning to form up into teams we would be reorganised. Presumably the plans for our employment were being changed. I was to learn later in life that, perhaps because we are so good at organising, we tend as a nation to meet any new situation by reorganising; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization. – Charlton Ogburn: Merrill’s Marauders (Harper’s Magazine – 1957)

Reorganization has to be part of an organization, not something done to it. This is why everyone, from an individual contributor to the CEO, has to understand networks. Networks enable organizations to deal with complexity by empowering people to connect with whom they need to, without permission. Enterprise social network platforms epitomize this, usually letting anyone connect to another colleague, and where the default permission to get access to information is public.

Networks are in a state of perpetual Beta. Unlike hierarchies, they can continuously change shape, size, and composition, without the need for a formal reorganization. Our thinking needs to continuously change as well. Of course this means letting go of control. Hierarchies were essentially a solution to a communications problem. They are artifacts of a time when information was scarce and hard to share, and when connections with others were difficult to make. That time is over.

So here’s the situation: markets, competitors, customers, suppliers, are already highly connected. The Internet has done this. It is why a connected enterprise needs to be organized more like the Internet, and less like a tightly controlled machine.

@MarietjeD66 [Member of European Parliament (D66/ALDE Group)] RT @carlbildt [Foreign Minister of Sweden since 2006] Tried to sort out 21st century statecraft at #bf7 [Brussels Forum]. Hierarchies losing and networks gaining in a world of hyperconnectivity. [2012]

7 Responses to “Hierarchies are obsolete”

  1. Ara Ohanian

    Harold, I like loose, hierarchy-free organizations myself but I confess that hierarchies have at least one use – they show (at least in theory) where the buck stops. In a networked organization, how do we know who to praise when things go right and who to give help to when it looks like things are going wrong?

    • Harold

      I agree that hierarchies are practical to get work done. I just don’t think they should be the overarching structure for the organization. There is still responsibility & accountability, but authority is distributed as things change. Jon Husband’s article [no longer online] shows a different metaphor, fishnets:

      “The fishnet is flexible; it can form and re-form varied patterns of connection. The middle manager may at one time be at the apex, at another in the middle. The fishnet organization rearranges itself quickly while retaining its inherent strength.”

  2. Ara Ohanian

    I like the fishnet analogy. Although I suspect many people find it difficult. Where hierarchy and status are synonymous, flexibility loses out.

  3. philip browning

    I think its naive to think hierarchies are obsolete. They have a function and reason to exist and this is not going away at all. Those at the centre, with power and resources will continue to use hierarchical structures because they are very efficient and fit for purpose. As routine work is automated certainly less and less of us will probably work in structured routine roles within large hierarchies. It think its more precise to suggest that both will co-exist and context is everything – IE compliance and conformance is important in a top down hierarchical model – the outer edge which is more bottom up requires different skills and attitudes. I think its more a matter of context rather than a binary either or situation.

  4. Rook

    Pyramidal power structures are unsustainable, as has been plainly demonstrated by 100% of them.
    Given how many of us run our nations on circular power structures (i.e. democracies, republics) and how sustainable and adaptive these models continually prove to be, it is surprising that the commercial world is so slow to adopt these advantages.
    The urge for control (as a means to a sense of security) is just overwhelming for too many. I suspect this urge is behind the advocacy we see for pyramid power structures, even in the face of insights like those in the article.
    Maybe that causative factor, and other causes, can be addressed by systematic education.
    Thanks for this timeless article, HJ.


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