The network era transition

I concluded in my last post that organizations will need to adapt to the network era. Another possibility is that hierarchical organizations, like most companies, will not be able to adapt to the network era. As with the assembly line, the view of the company as an organization chart may become a relic of the past. org chart

In the very near future it is quite possible that most of us will be working in knowledge networks, whether we are farmers or software engineers. A knowledge network in balance is founded on openness which enables transparency. This in turn fosters a diversity of ideas, and can promotes innovation. The emergent property of all of these exchanges is trust.

The network era may revert the role of the organization to merely a supporting one. We might even see corporations bidding for the privilege of supporting knowledge networks. I see evidence of this new approach to work at Change Agents Worldwide, which is firmly based on transparency and trust amongst its current 33 members.

As more people work in distributed networks they may realize how little they have to gain from traditional organizations. Networks that foster autonomy as well as interdependence are a much better vehicle for rewarding work than hierarchical organizations can ever be. Hierarchies, driven by external and formal direction, cannot compete with connected workers working in trusted networks, for they are intrinsically motivated.

In networks, cooperation trumps collaboration. Collaboration happens around some kind of plan or structure, while cooperation presumes the freedom of individuals to join and participate. Cooperation is a driver of creativity. Cooperation is also driven by intrinsic motivation.

No person, no matter where in an organizational hierarchy, has all the knowledge needed to thrive in the network era. Neither does any company. Neither does any government. We are all connected and dependent on each other. Hierarchies divide us.

Managing professional relationships as a network allows each node (person) to be unique. This removes the artificial barrier of the job, which assumes that people are replaceable, and that knowledge flows up and down. Knowledge in a network is about connecting experiences, relationships, and situations.

The latest example of this organizational shift is Zappos, the online shoe company, that is going “holocratic”(R).

“We’re classically trained to think of ‘work’ in the traditional paradigm,” says John Bunch, who, along with Alexis Gonzales-Black, is leading the transition to Holacracy at Zappos. “One of the core principles is people taking personal accountability for their work. It’s not leaderless. There are certainly people who hold a bigger scope of purpose for the organization than others. What it does do is distribute leadership into each role. Everybody is expected to lead and be an entrepreneur in their own roles, and Holacracy empowers them to do so.” – Quartz: Zappos is going Holocratic

“The future has arrived — it’s just not evenly distributed yet.”William Gibson

Talking about the Network Era

Interesting things happen when hyperlinks subvert hierarchy, as the writers of the Cluetrain Manifesto said in 1999. Wikileaks, Edward Snowden, Arab Spring, and the Occupy Movement are just a few recent examples. Spying on entire populations is another network era phenomenon. In education, the current subversion is the MOOC, which has already itself been subverted by corporate interests. In the labour movement we are seeing things like alt-labour as well as a growing shareable economy. Networked, distributed businesses, like AirBNB, are disrupting existing models, with the inevitable push-back as they become successful.

Networks will transform education, business, the economy, and society even further. In the network era, the creative economy will gain dominance over the information and industrial economies. Professional knowledge distribution will move away from institutionalized business schools into networked communities of practice.

The key to a flourishing society in the network era will be distributed sense-making. Self-instruction, the basis of personal knowledge mastery, will be a requirement in a growing number of peer-to-peer networks. Networked learning will give rise to networked decision making. David Ronfeldt articulates this well, with his TIMN [Tribes-Institutions-Markets-Networks] framework. Anyone raised during the past several decades probably understands tribes and institutions and even market forces. This is a triform society (T+I+M). But what happens as we become a quadriform society (T+I+M+N)?

TIMN has long maintained that, beyond today’s common claims that government or market is the solution, we are entering a new era in which it will be said that the network is the solution (e.g., here and here). Aging contentions that turning to “the government” or “the market” is the way to address particular public-policy issues will eventually give way to innovative ideas that “the network” is the optimal solution.

In the network era we have to understand how to become contributing members of networks, for work and for life. This should be a major focus for all professional training and education.

“Reed’s Law” posits that value in networks increases exponentially as interactions move from a broadcasting model that offers “best content” (in which value is described by n, the number of consumers) to a network of peer-to-peer transactions (where the network’s value is based on “most members” and mathematically described by n2).  But by far the most valuable networks are based on those that facilitate group affiliations, Reed concluded. – David Bollier

Without good sense-making skills, the citizenry cannot understand complex issues that affect us all, such as individual privacy versus national security. These issues require networked, human intelligence, not broadcast sound bites, nor ‘learning objects’.

Sensemaking should drive policy. Policy drives decisions. Decisions, of course, need to be informed. If the People don’t know what makes their world go ‘round, the folks on the Hill sure won’t. Globalized governments can’t. – Gunther Sonnenfeld

As David Bollier concludes, “Legitimate authority is ultimately vested in a community’s ongoing, evolving social life, and not in ritualistic forms of citizenship.” Should not education move beyond ritualistic forms of subjects, classes, and certifications and toward ongoing, evolving social learning? How else will we be able to deal with the complexities of this networked, connected sphere that we inhabit?

Jon Husband says that we are all in this together.

The interconnected Information Age is beginning to show us that we’re all linked together – and that the whole system matters.

This principle applies to organizations, to networks of customers, suppliers, employees and communities, to our societies and to the planet.

New language for this principle is popping up everywhere – knowledge networks, intranets, communities of practice, systems thinking, swarming, social software, social networks, tipping points.

Awareness is the key.  Maintain an “open focus”.

Being aware of yourself, others and the effects of your actions and ways of being in relation to others is a fundamental requirement in these conditions.

To thrive in the network era we need to understand networks – social networks, value networks, information networks, etc. Therefore we will need network era fluency.

network era fluencyNetwork era fluency could be described as individuals and communities understanding and being part of global networks that influence various aspects of our lives. For individuals, the core skill will be critical thinking, or questioning all assumptions, including one’s own. People will learn though their various communities and in doing so, develop social literacy. Information literacy will be developed by connecting to many networks. Diversity of our knowledge networks can foster innovation and improve our collective ability to adapt.

Mass network era fluency will keep our knowledge networks social, diverse, and reflect many communities. This kind of fluency, by the majority of people, will be necessary to deal with the many complex issues facing humanity. We cannot address complex issues and networked forces unless we can knowledgeably discuss them. To understand the network era, we need first to be able to talk about it.

The network era has already changed politics, created new dominant business models, opened up learning, and is now changing how organizations operate – on the inside. Once we are able to talk about networks, we will see that many of our current work practices are rather obsolete. From how we determine the value of work, to how we calculate pay for work; organizations will need to adapt to the network era.

I think business leaders and HR departments do not understand this shift, or the fact that this shift is accelerating, so that in a year or two 75% of peoples’ value will be based on their network performance, their ability to contribute to and accept from others. – Stowe Boyd

The changing nature of work

In 2013, I was able to spend some time looking at the changing nature of work. I continued to read from many sources, and I observed what and where I could. I used this blog to help make sense and engage with my professional learning networks. Here is a single-paragraph summary of what I see as the major issues affecting the management of work.

First of all, it is becoming obvious that the fundamental nature of work is changing as we transition into a post-job economy. The major driver of this change is the automation of procedural work, especially through software, but increasingly with robots. The drivers behind the post-job economy are also changing our work structures. Organizations will need to become more networked, not just with information technology, but how knowledge workers create, use, and share knowledge. This new workplace also will require different leadership that emerges from the network and temporarily assumes control, until new leadership is required. Giving up control will be a major challenge for anyone used to the old ways of work. An important part of leadership will be to ensure that knowledge is shared. But moving to a knowledge-sharing organizational structure will be difficult, because of the knowledge sharing paradox; which is that the more control is exerted, the less knowledge is shared. All of these challenges need to be addressed, and rather quickly, as software continues to eat jobs, and income disparities get wider.

nature of work is changingReferences:

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The future of management is talent development

What is the major difference between the scientific management framework that informed so many of our work practices, and the new management requirements for the connected enterprise in the network age?

Frederick Winslow Taylor started with a basic assumption about the difference between labour and management. Labour was stupid and management was intelligent.

Now one of the very first requirements for a man who is fit to handle pig iron as a regular occupation is that he shall be so stupid and so phlegmatic that he more nearly resembles in his mental make-up the ox than any other type. The man who is mentally alert and intelligent is for this very reason entirely unsuited to what would, for him, be the grinding monotony of work of this character. Therefore the workman who is best suited to handling pig iron is unable to understand the real science of doing this class of work.-  F.W. Taylor in Principles of Scientific Management (1911)

This attitude still permeates our organizations, whether we realize it or not.

Taylorism-derived job analysis, evaluation and measurement are the tools (along with their underlying assumptions) that are used to create the skeletal architecture of hierarchical organizations, the pyramid we all know. – Jon Husband in Knowledge, power, and an historic shift in work and organizational design

The assumption of an organizational hierarchy is that the further up the organization chart you go, then the more educated and intelligent you are. But what happens when the work at the bottom of the pyramid gets automated or outsourced? Taylor assumed that only management could see the whole system. In the connected enterprise, everyone has to see the whole system, all the time. This makes many of our assumptions about how work should be organized completely irrelevant, and perhaps even dangerous for any organization where its outputs are important to society, investors, management, or workers.

Network management assumes human creative potential can be realized in supportive and challenging environments by engaging everyone.

We need creativity at the company level to respond effectively to increasing competition and uncertainty. We also need creativity at the worker level to define jobs that will be augmented, rather than replaced, by machines … The reason for the firm to exist now? Talent development. Firms will exist so that workers can learn and grow much faster than they could on their own. – John Hagel in Wired: Here’s How to Keep the Robots From Stealing Our Jobs

A focus on Talent development means growing and supporting customized work and letting the robots do the Labour. It requires some fundamental organizational redesign, from compensation, to competencies, and even redefining management. Network management focuses on Talent development. Everything else is superfluous.

future  management

 

Moving forward with Social Collaboration

Change Agents Worldwide is a new type of consultancy, which functions as a transparent cooperative. It includes solo change agents (like me) and enterprise change agents who are trying to bring about change in their respective workplaces. This is a network of progressive and passionate professionals, who really want to bring about substantive change in how work gets done.

ctwftw-226x300This is how I would describe what Change Agents Worldwide is trying to achieve:

We know that people have always sought meaning in their work. But people and their workplaces have not always been aligned. In the emerging network era we are finding that successful organizations foster openness, so that value can be created by every node in their network. In a truly connected enterprise, knowledge comes from diverse viewpoints through active seeking, sense-making, and sharing. Trust emerges from the transparency of working out loud. Credibility is achieved from the questioning of all assumptions, while a focus on results distributes authority throughout the network. Everyone can and should work in an organization like this.

Later this week we will describe the disruptive changes facing organizations today, as well as some frameworks to address them. Susan Scrupski (USA), Simon Terry (AUS) and I will talk about the issues and also discuss some real business examples.

Please sign up and join us on Thursday, 12 December for Moving forward with Social Collaboration in partnership with Socialcast by VMware. It’s free.

To get a feel for the ideas and people at Change Agents Worldwide, here are some recent quotes from our blog.

Just as the railroads need a precise sense of time, our new economy demands new precision in ideas like collaboration, work, trust, community and value.Simon Terry

We’ve demonstrated that being “social” doesn’t necessarily open up new risks, but can in fact be more successful at bringing risk to the forefront earlier and when there is still a chance to remedy the issue … in contrast to when inappropriate behaviors occur out of pure naïveté, in private channels, and aren’t discovered until it is too late to remedy … leaving only damage control to come to the rescue.Bryce Williams

But, anyone who’s played in both these camps will readily acknowledge that a digital strategist or VP of Consumer Strategy has no idea what social collaboration is inside the enterprise and most likely spends his/her entire day in email, teleconferences, meetings, and ppt. And, someone who’s running an internal enterprise social network has no idea who the top players are in SMMS (or what that acronym even means). – Susan Scrupski

As more and more knowledge work is carried out by people communicating and exchanging information using hyperlinks in social networks (where knowledge lives ) and routing it to where it is needed at any point in time, vertical arrangements of knowledge are disrupted, if not subverted. – Jon Husband

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 were addressed by a high ranking officer in the hierarchy, 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 was made at all. 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]

Do you want to be efficient or effective?

“What is it about the ‘organization’ of the Internet that has allowed it to thrive despite its massive size and lack of hierarchy?

The work of identifying which relationships and connections to build and grow and maintain is dispersed to the nodes themselves — and they’re the ones who know which ones to focus on. That’s why the Internet can be so massive, and get infinitely larger, without falling apart. No one is in control; no one needs to hold it together. It’s a model of complexity. And, like nature, like an ecosystem, it is much more resilient than a complicated system, more effective, and boundary-less. And, like nature, that resilience and effectiveness comes at a price — it is less ‘efficient’ than a complicated system, full of redundancy and evolution and failure and learning. But that’s exactly why it works. “—Dave Pollard: What if Everything Ran Like the Internet?

connected enterprsie network
While a certain amount of hierarchy may be necessary to get specific project work done, networks function best when each node can choose with whom and when it connects. Hierarchies should be seen as temporary, negotiated agreements to get work done, not immutable power structures. Networks enable work to be done more effectively when that work is complex and there are no simple answers, best practices, or case studies to fall back on.

Thinking like a node in a network and not as a position in a hierarchy is the first mental shift required to move to a connected enterprise. The old traits of the industrial/information worker may have been intellect and diligence but networks need people who are creative and take initiative. People cannot be creative on demand. Nurturing creativity becomes a primary management responsibility.

The Internet has finally given us a glimpse of the power of networks. We are just beginning to realize how we can use networks as our primary organizational form for living and working. A connected enterprise has to be based on looser hierarchies and stronger networks.

In networks, even established practices like teamwork can be counter-productive. Teams promote unity of purpose. Sports metaphors are often used in teamwork, but in sports there is only one coach and everybody has a specific job to do within tight constraints. In today’s workplace, there’s more than one ball and the coach cannot see the entire field. The team, as a work vehicle, is outdated. In a complex world, team unity may be efficient, but not very effective.

Exception-handling also becomes more important in the connected enterprise. Automated systems can handle the routine stuff while people working together deal with the exceptions. As these exceptions get addressed, some or all of the solutions can get automated, and so the process evolves. Complexity increases the need for both collaboration (working together on a problem) and cooperation (sharing without any specific objective). Networks enable rapid shifts in the composition of work groups, without any formal reorganization. Networked colleagues, learning together, can close the gap between knowing and doing.

“Many conventional thought leaders conceive of the current global crisis in terms of closing a knowledge gap: if only we could close the knowledge gap (on how to address the current challenges), we would be able to take appropriate action. But true change making practitioners often express the other view: the real gap today is not a knowledge gap, it’s a gap between knowing and doing. That is, the real problem is a collective capacity gap of sensing and shaping the emerging future at the scale of the whole system. If that is so, how can we create new spaces that allow people to co-sense, lean into, and co-shape the emerging future?” —Otto Sharmer: Fire from Within

The connected enterprise adoption curve

[First …] Here’s the final word on social business from me: informal social relationships have always been linked to effective performance.

[So …] Now here we are with all that we know, or should know, about the importance of informal relationships, creating high performance work environments and learning cultures.

[But …] Mental models, behaviours and formal systems remain stubbornly resistant to change.

Anne Marie McEwan

Socbiz fullcircleYou have the enterprise social technology and you may have even developed training programs, in conjunction with supporting collaboration aligned with the workflow. But it’s those pesky “mental models, behaviours and formal systems” that still stand in your way of becoming an open, connected enterprise.

Very few organizations are truly open. The same ones keep getting cited: W.L. Gore, Automattic, Zappos, Semco SA. These are the innovators. There are others who are moving to a more cooperative work environment, where outside and inside are allowed to mix, without undo control. These are the early adopters. The majority of companies are still satisfied with improving internal collaboration and getting the job done, blind to the faster moving competition building up outside. Finally, the laggards are merely coordinating work, according to some timetable, oblivious to the end of the industrial era.

the connected enterpriseIf “informal social relationships have always been linked to effective performance” then open organizations are really a business necessity. Helping move organizations to the left is my work.

Structures, skills and tools

In a complex economy, the way to think about the future is this:

  • We can’t predict the future.
  • But we can learn about the patterns from which the future will emerge.
  • In fact, while we can’t control the future, we can influence it.
  • The best way to influence the future is by innovating through experiments.

– Tim Kastelle

The innovative work structures required for complex economies need to be supported by skilled workers with the right tools. We know that sharing complex knowledge requires strong interpersonal relationships, with shared values, concepts, and mutual trust. But discovering innovative ideas usually comes via loose personal ties and diverse networks. Knowledge intensive organizations need to be structured for both. Effective knowledge-sharing drives business value in a complex economy and this requires a workforce that is adept at sense-making.

Content Creation

In what is often called a ‘social business’, capabilities need to be aligned with tools. A core requirement for both knowledge workers, and enterprise tools, is to share what we are learning and doing. Making work more explicit enables the organization to learn. Sharing user-generated content (knowledge artifacts) is how everyone can make tacit knowledge more explicit. Work is learning and learning is the work, when everyone shares. Of course this is more difficult if communications systems do not allow the easy creation and sharing of this content. Tools have to support the work.

Collaboration

Most organizations have tools that support working together for a common objective. Coordinating tasks, conducting meetings that don’t waste time, and finding expertise are common collaborative tasks. Letting workers pick their own collaboration tools can go a long way in getting work done. Having an array of tools is also helpful. Modelling collaboration skills throughout the enterprise is even better.

Cooperation

When people share openly, without any direct gain, knowledge networks thrive and the organization benefits. Cooperative skills include sharing openly with colleagues, communicating effectively, and networking to improve business performance. In addition, social media require new skills, beyond traditional face to face interchanges. Setting sharing as a default behaviour is a good start, but providing tools to enable sharing is also needed. As with collaboration, cooperative behaviours need to modeled and encouraged.

Structures + Skills + Tools

A combination of organizational structure changes, skills development and modeling, plus a suite of tools, can help to create a social business. All three are needed. Focusing on only one or two areas will likely not yield much success. This has been a problem with many social business initiatives which are too focused on the tools, like enterprise social networks (ESN). While an ESN may cover all the facets shown in the image below, workers still need those matching skills. In addition, the structure must support these behaviours on an ongoing basis. It takes all three components.

social-business-tools-skills