Simon Terry

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Everything Meaningful Happens in a Network

Leaders need to realise human potential in networks.

In our pursuit of efficiency in an industrial management mindset, we can become very linear in our thinking. Inputs create outputs. People have a job to make things happen. People are therefore production inputs with variable quality and productivity. These inputs can be automated away to reduce waste, deliver better consistency and improve efficiency.

This linear thinking runs the risk of unintended consequences and a massive loss of human potential.  Human potential properly engaged with leadership offers exponential opportunities.

More importantly, nothing significant in our organisations happens in a linear process.  Everything meaningful that we do in our organisations happens in a network.

Performance Incentives: An example of the significance of networks

The most straight forward example of linear thinking in organisations is performance incentives.  Organisation after organisation has invested huge effort and dollars in design of performance incentives as a linear process. More incentive should generate more of the desired outputs and more engaged people.

Oddly the outcomes of linear performance incentives are often mixed. Extrinsic motivation doesn’t always work as intended. Intrinsic motivations often matter more to people and those intrinsic motivations are more often concepts that related to our human place in networks, like status, impact on others or sense of belonging in a group.

Some times your linear incentive program is even counterproductive. If you want to find the flaws in any incentive program give it to a group of employees who can share their insights and intelligence. They will quickly identify and exploit any flaws as a collective and enforce group norms on individuals who don’t follow along.

Incentive programs are a key issue disrupting group working behaviours like collaboration destroying value & output. People don’t deliver their performance as an atomised input.  They act and share as part of larger groups.

Our Brains are Networks

As we better understand our human brains, we start to see that their function is less the outcome of linear processes and more the result of networks of neural processes. We don’t evaluate decisions simply on purely financial criteria. In addition to financial benefits, humans consider issues like status, certainty, autonomy, relationships and fairness.

These concepts which come from the network in our brain also reflect our need to function and place ourselves in networks in society.  Mechanistic management processes leave these network functions in our brains out to their detriment.  They are leaving out the meaning that makes for human potential. 

Our Organisations are Networks

Thinking of our organisations as atomised individuals acting in linear processes simplifies our management challenges.  However, our leadership challenge remains to engage the network to realise its human potential.

No matter what the process the official process is in your organisation, you know that networks are the way to influence decisions and get stuff done.  Hierarchies are just a part of the network in the organisation and people are more likely to use the human network than the process hierarchy.

Why else would meetings about meetings even happen? They are never required by the process; they meet the needs of the human network, needs such as increasing certainty, reducing threats to status or increasing relationships with others. If you want to get rid of these wasteful occurrences in corporate life, the answer is not tighter compliance with the process. The answer is better engaging the human meaning in the network in the organisation. Working out loud in a social network is a great alternative to meetings about meetings. People can build their comfort by learning about and engaging a leader working out loud informally before the decision point.

Our Network Relationships Create Value and Meaning

The networks that leaders must manage to create value go well beyond the organisation. The only real value in our organisation is created in external networks.  We only create meaning and value when we interact with customers, partners, suppliers and the community.  Everything else is internal accounting.

As organisations now increasingly can see, these relationships are no longer linear. A salesforce can no longer view as a sales funnel as a series of linear outward pushes to convert a customer. In a social & networked world, it is more evident than ever that the network of influences is what pulls a customer into a sale.  The customer’s every interaction with the organisation, its competitors and influencers is a part of that decision.  The value and the meaning created with customers comes from the network, not your linear sales process.

Community engagement is an even richer network conversation that depends deeply on human engagement, real conversation and the purpose and values that your organisation lives.  Whatever your process for a community sponsorship, it creates no value without the human network effects. 

Choose Human Potential. Look to the Network

Simplifying people to a fungible input measure like number of full time employees (FTE) and treating FTE as inputs in a linear process may be of value for the measurement and control of management. However, the challenge of leadership is to enable our organisations to realise human potential in a network. Whether with employees, customers or the community, the real value and meaning of an organisation happens in the network.


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