organizing for the network era

In my last post I noted that many organizations today are nothing more than attractive prisons. The current organizational tyranny was a response to a linear, print-based world. These organizations are artifacts of a time when information was scarce and hard to share, and when connections with others were difficult to make and required command and control. The network era, with digital electric communications, changes this. Organizations today should be designed more like the internet: small pieces, loosely joined.

Last year I described several of my principles and models for the network era and showed how they related to each other. I would like to put these together in a coherent framework to show how we can design organizations for the network era, instead of ones optimized for markets, institutions, or tribes. The network era needs new structures, not modified versions of obsolete models.

Organizations for the next century need to be based on principles and frameworks that reflect our humanity as we live and work in an electric networked society.

Objective: Self-governance

Guiding Principles: Subsidiarity & Wirearchy

Organizing Principle: Network Management

Organizing Framework: Perpetual Beta Working Model

Leadership Model: Connected Leadership

Objective

Self-governance

“All forms of governance are failing their citizens — dictatorships and communism failed in the last part of the 20th century, and in this century democracies are not meeting citizen expectations. No matter which leaders are chosen, the systems themselves are failing.” —Yaneer Bar-Yam

In 2011 Gwynne Dyer succinctly explained that, “Tyranny was the solution to what was essentially a communications problem.” Tyranny is one person in charge, at the top of a rigid hierarchy that controls people. Hierarchies work well when information flows mostly in one direction: down. They are good for command and control. Hierarchies can get things done efficiently. But hierarchies are useless to create, innovate, or change.

In a network economy, work is based on curiosity, creativity, empathy, passion, and humour. Autonomous people with these skills will drive the economy. Standardized, routine jobs, controlled through hierarchies and bureaucracies will become obsolete.

One way to look at autonomy is the type of action people are allowed to take without permission. There are five levels of increasing autonomy in the workplace. The organizational objective for the network era workplace should be to achieve all five levels.

Where you work

+ How you get things done

+ What you work on

+ Who you work with

+ Why you do the work in the first place

Principles

Subsidiarity & Wirearchy

The principle of subsidiarity is: “that social and political issues should be dealt with at the most immediate (or local) level that is consistent with their resolution” –Wikipedia. For example, subsidiarity is a stated principle of the European Union.

“Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.” –EU Declarations

Subsidiarity enables ground-level cooperation which can be a force to counter older, and still strong, market and monopoly forces, in order to meet local needs but within a global, networked context. This principle can be further expanded by combining it with wirearchy. Jon Husband’s principle of wirearchy states that organizations should be structured around “a dynamic flow of power and authority, based on information, trust, credibility, and a focus on results, enabled by interconnected technology and people”. A dynamic flow of power and authority supports the principle of subsidiarity. Autonomous workers can more readily adapt to new challenges and situations when they are organized according to these guiding principles.

Principle of Network Management

The Principle of Network Management, adapted and amended from the last century’s Principles of Scientific Management which informed much management thinking, changes the 20th century relationship between workers and management.

The Principle of Network Management
It is only through innovative and contextual methods, the self-selection of the most appropriate tools and work conditions, and willing cooperation that more creative work can be fostered. The duty of being transparent in our work and sharing our knowledge rests with all workers, especially management.

“innovative & contextual methods” means that jobs can no longer be standardized, requiring more flexible methods to organize for complexity.

“self-selection of tools” means moving away from standardized enterprise tools toward open platforms in which workers, many of which are part-time or contracted, can use their own tools in order to work as knowledge artisans.

“willing cooperation” means lessening the emphasis on teamwork and collaboration and encouraging wider cooperation.

“duty of being transparent” means shifting from ‘need to know’ to ‘need to share’ especially for those with leadership responsibilities, who must understand that in the network era, management is a role, not a career. Transparency is a significant challenge for organizations today, and it can start with salary transparency.

“sharing our knowledge” means changing the environment so that sharing one’s knowledge does not put that person in a weaker organizational position. An effective knowledge worker is an engaged individual with the freedom to act. Rewarding the organization (network) is better than rewarding the individual, but only if people feel empowered and can be actively engaged in decision-making. Intrinsic, not extrinsic, motivation is necessary for complex and creative work.

Models

Perpetual Beta Working Model

The perpetual beta working model is a framework of overlapping networks, communities of practice, and work teams. It differs from the traditional organization chart in that it incorporates relationships outside the organization. Like the web, it is about creating connections. The model shows the need to communicate and learn across organizational boundaries, while still getting work done.

The essence of this model is giving up control and promoting self-governance. It is based on strong networks and temporary, negotiated hierarchies to get work done. These need to be temporary so people can reform into different groups, according to the situation. The challenge for an organization is to have a flexible enough structure to let people move in and out of the networks, communities, and teams. This ensures the flow of ideas, knowledge, and social capital so that the connectivity networks stay strong, alignment networks thrive, and productivity networks get work done.

Work in the network era is a constant dance between looser communities and networks (to get inspiration and ideas) and temporary, negotiated hierarchies to get work done. The social safety net that was in the 20th century corporate workplace is shifting to our connectivity (social) networks. This is already the state of affairs for many freelancers. Workers in the network era can hedge their work futures by engaging in collectives and communities to create a wide and diverse web of connections and relationships to take advantage of flash opportunities for work: on their own terms. This makes the network more resilient.

Connected Leadership

Connected leadership is an emergent property of a network in balance and not some special property available to only the select few. It is based on an intelligent and engaged workforce learning with each other. Connected leaders practice the discipline of personal knowledge mastery which comprises working and learning out loud as well as critical thinking and active curiosity. By seeking, sensing, and sharing, everyone in an organization can become part of a learning network, listening at different frequencies, scanning the horizon, recognizing patterns, and making better decisions. The best leaders are constant learners.

Connected leadership is not given from above, as there is no top in a network. To know the work culture, connected leaders marinate in it. This cannot be done while trying to control the culture. Organizational and network resilience is strengthened when leaders let go of control. Connected leaders use compassion, empathy, and trust to influence networked people. Transparency eliminates the need for most traditional management control mechanisms.

Connected leaders know how to deal with ambiguity and complexity. They have an attitude of perpetual beta when it comes to the mental models that inform their actions. Connected leadership focuses on making the whole network smarter, which in return helps the leader be more effective. Networks are collectively smarter than any individual node (leader).

Connected leadership is shifting the focus from you to we. All organizational leaders are part of complex human social networks. The great fallacy of ‘leader-ship’ is that leaders control. Different skills are needed in a network society. For instance, Leigh Buchanan, editor-at-large for Inc. Magazine, cites seven desirable leadership traits, once considered feminine: Empathy, Vulnerability, Humility, Inclusiveness, Generosity, Balance, Patience. These are the traits of servant leaders.