distributing power for the network era

A certain amount of command and control, exercised through a hierarchy is often necessary to get work done. I suggest temporary, negotiated hierarchies so that teams can form and re-form depending on what needs to be done. Reorganization can be inherent in the enterprise structure and not a cataclysmic event that happens only when management systems fail.

We are in the early stages of an emerging era where network modes of organization dominate over institutions and markets. Networks naturally route around hierarchy. Networks also enable work to be done cooperatively, as opposed to collaboratively in institutions or competitive markets.

Source: The Perpetual Beta series

What would an organization look like with looser hierarchies and stronger networks? Probably a lot more human, retrieving some of the intimacy and cooperation of tribal groups. We already have other ways of organizing work. Orchestras are not teams, and neither are jazz ensembles. There may be teamwork on a theatre production but the cast is not a team. It is more like a community of practice, with strong and weak social ties.

Hierarchical teams are what we get when we use the blunt stick of economic consequences — with financial quid pro quo — as the prime motivator. In a creative economy, the unity of hierarchical teams is counter-productive, as it shuts off opportunities for serendipity and innovation. In a complex and networked economy workers need more autonomy for self-governance.

A new dominant organizational form (the network) requires new leadership models. The command and control model of a hierarchy, a simple branching network, is inadequate. The corporate world has been significantly influenced by American business models and business schools for the past century. Most of these are obsolete. Instead, we can learn from Nordic leadership models and create organizations that take advantage of a networked world.

“American managers are assertive, aggressive, goal and action oriented, confident, vigorous, optimistic, and ready for change. They are capable of teamwork and corporate spirit, but they value individual freedom and their first interest is furthering their own career.”

“Swedish management is decentralized and democratic. The rationale is that better informed employees are more motivated and perform better. The drawback is that decisions can be delayed.”

“Finnish leaders exercise control from a position just outside and above the ring of middle managers, who are allowed to make day-today decisions. Finnish top executives have the reputation of being decisive at crunch time and do not hesitate to stand shoulder to shoulder with staff and help out in crises.”

“In democratic Norway, the boss is very much in the center of things, and staff enjoy access to him or her most of the time. Middle managers’ opinions are heard and acted upon in egalitarian fashion, but top executives rarely abandon responsibility and accountability.”

—Business Insider: 2014-01-06

The problem with the American model is that it leads to hubris, with few checks and balances on the person in charge.

“Hubris syndrome was formulated as a pattern of behaviour in a person who: (i) sees the world as a place for self-glorification through the use of power; (ii) has a tendency to take action primarily to enhance personal image; (iii) shows disproportionate concern for image and presentation; (iv) exhibits messianic zeal and exaltation in speech; (v) conflates self with nation or organization; (vi) uses the royal ‘we’ in conversation; (vii) shows excessive self-confidence; (viii) manifestly has contempt for others; (ix) shows accountability only to a higher court (history or God); (x) displays unshakeable belief that they will be vindicated in that court; (xi) loses contact with reality; (xii) resorts to restlessness, recklessness and impulsive actions; (xiii) allows moral rectitude to obviate consideration of practicality, cost or outcome; and (xiv) displays incompetence with disregard for nuts and bolts of policy making.” —Brain: A Journal of Neurology, 2009-02-12

Using a consultative and open Nordic model could lead to more democratic workplaces.

“The more likely dividend from improved societal awareness of hubris is that, as expectations change, leaders in all walks of life may feel a much greater obligation to accept and not resist society’s prescribed course of democratic constraint, accept statutory term constraints such as the 8 years on a US President and, when alerted to their behaviour, step down voluntarily from office or not seek re-election and reappointment as leader.” —The Atlantic, 2017-09

Hierarchical power, which has informed most of our organizational design for the past century is actually debilitating. Not only does power corrupt, it causes brain damage.

“Power, the research says, primes our brain to screen out peripheral information. In most situations, this provides a helpful efficiency boost. In social ones, it has the unfortunate side effect of making us more obtuse. Even that is not necessarily bad for the prospects of the powerful, or the groups they lead. As Susan Fiske, a Princeton psychology professor, has persuasively argued, power lessens the need for a nuanced read of people, since it gives us command of resources we once had to cajole from others. But of course, in a modern organization, the maintenance of that command relies on some level of organizational support. And the sheer number of examples of executive hubris that bristle from the headlines suggests that many leaders cross the line into counterproductive folly.” —The Atlantic, 2017-09

We should not inflict such power on individuals and instead learn how to distribute it to help the whole network make better decisions.