Moving Beyond Your Hierarchy

For years I’ve sat on the opposing side of hierarchy. That rigid concept in which orders are barked down from above and complied to from below has robbed our corporations, governments, and social institutions of freedom. Many of the management thought-leaders we, at Outthinker, admire argue the same. Gary Hamel, for example, wrote “The real damper on employee engagement is the soggy, cold blanket of centralized authority.”

But an afternoon with MIT Professor Thomas Malone, author of Superminds: The Surprising Power of People and Computers Thinking Together and director of MIT’s Center on Collective Intelligence, has changed my mind.

This is not to say that the centralized, hierarchical leanings of your organization are not to blame for robbing your organization of much of the proactive spirit of your people. Rather, what Malone points out, is that the answer lies not in moving beyond bureaucracy (moving to what some call the “post bureaucratic organization”). This is not about our corporations evolving into new, liberating forms of organization.

The truth is, you don’t have to choose between a bureaucracy and whatever its alternative might be. Let me explain what I mean by laying out the key relevant points from Professor Malone’s research on superminds.

Superminds

Let’s call “superminds” any large group of people thinking together: an ancient hunting tribe deciding where to camp, a corporation deciding where to invest, a country selecting its next leader. If you think about it, every significant thing humans have accomplished has been done in groups, in superminds. Your organization is ALREADY a supermind.

Forms of superminds

According to Malone, there are five types of superminds:

  1. Hierarchies like the organization you are probably operating in today
  2. Markets like the one that determined the value of your retirement assets today
  3. Democracies like the one selecting your local, state, and national representatives today
  4. Communities like the neighborhood you live in today that decided whose dog barks too loud
  5. Ecosystems like the one in which your organization interacts with regulators, competitors, industry partners, investors, etc.

You do not choose one form

Even if you are sitting in a traditional, hierarchical organization, you are not living in only a hierarchy. Likely, at the top of your hierarchy is a democracy, in the form of a board that votes on key decisions. When you want to recruit new talent, you must interact with a marketplace of supply (talent) and demand (other employers). Within your organization you find informal communities of like-minded people sharing interests or passions. And your organization participates in a broader ecosystem of regulators, governments, competitors, etc., that compete and collaborate, each seeking their own survival.

Think about the structure of the supermind you call your country. Likely you will see multiple forms of supermind structures at play. You (hopefully) have a functional democracy, which determines your leader. You have hierarchies in your military, police, and executive offices. You operate markets in the form of ideas, investment, and talent. At the ground-level, your people live in communities. And you will find ecosystems – environmental, corporate, international – all around you.

The idea that you must choose one form of organization is flawed. The idea that we are evolving from hierarchies into some new form, then, is over simplified.

An organizational canvas

In 2008, Alexander Osterwalder popularized an idea that changed the way that businesses design their models, when he developed the Business Model Canvas. The idea is that rather than think of business models as rigid blueprints, think of them as living designs that we can experiment with. If one pricing model does not work, let’s try another. If the current distribution path is not ideal, let’s try a different one.

A similar approach could be taken to apply Malone’s five models (hierarchies, markets, democracies, communities, and ecosystems) to rethink the principles of your organization’s design. For example, some consulting firms introduce a “market” model when assigning people to projects. They have partners put in bids to attract consultants to their projects. Consultants get to choose which projects they want to work on. The better the offer (in terms of work/life balance, interesting work, etc.), the more likely the project will attract the best consultants. The better the consultant’s performance, the more likely they will get the best projects.

Or consider Haier, the Chinese appliance maker who I believe in the next two years could come to dominate the market, which introduces democracy into its leadership structure. It breaks its business into thousands of “micro-enterprises” (MEs). Each ME has its own CEO. If that CEO is not performing, the rest of the ME’s team can vote him/her out and vote in someone new.

Conclusion

The permutations are exciting and endless. To thrive in the future, stop thinking about evolving from hierarchy to something new. Instead, approach your organization as a creative design experiment:

  1. Identify each key decision-making process (who to hire, who to lead, how to source, where to sell, how to market, where to produce, etc.).
  2. For each, determine which of the five “supermind” structures would be best suited for that process (hierarchy, market, democracy, community, or ecosystem)?
  3. Determine how would you implement that system (who would participate, how would they engage with each other)?
  4. Begin implementing the new model but keep monitoring, learning, and evolving as you go.

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