Why Hierarchal Management Survives – Institutional Filter Failure

We like to believe hierarchical management survives because those in power won’t surrender it. More likely it survives because we have not yet developed better management practices for handling excess of information. Our hierarchies make us intentionally dumb to avoid the challenges of networked information flows. We rely on hierarchy to remain unresponsive.

The Power but No Glory

Ask most frustrated change agents about why management is not changing faster to new ways of working and conversation eventually turns to the lack of incentive for managers to surrender their power.  After all when the rewards, power and prestige of senior management is so great, why would any organisational leader jeopardise these benefits by moving to new models of management.  In this view a senior management cartel stands in the path of change.

Ask senior managers about the needed changes in organisations and they will list the same issues as the change agents – too many meetings, too many emails, not agile and responsive enough, bad decision making, not enough innovation, and poor execution. Senior managers recognise that power is not what it once was. Fiat power is declining, engagement is low and threats must give way to influence.

However, when you ask about moving to new network and self-organising ways of working, the first response is usually not about a loss of power. The first response is some form of “I barely manage my emails. How would I cope if everyone could contact me directly?”  This complaint may take the form of social channels as a new method of two way communication, the need to respond to new issues from customer or community networks, new performance measures, managing autonomous experimentation or the being exposed to incomplete work in progress through working out loud.

Institutional Filter Failure

Consider for a minute the shared list of the sins of a hierarchical organisation: meetings, email, narrow internal views, partial data, bad decision making and limited ability to act.  These aspects of the system are not symptoms of the hierarchy.  They are its reason for being.  They are the system.

In an age of an increasing overload of information, management more than ever needs filters. Clay Shirky famously said: 

‘There’s no such thing as information overload – only filter failure’

Our management systems are full of these ways to reduce and control the spread of information to make management life more manageable. They aren’t flaws, filtering is the system. The system is working perfectly as we designed it.  We have these process to make our organisations less responsive. We want to exclude lots of information to make managers’ lives easier.

Managers resist giving up these flaws of the hierarchy because we have not yet offered them alternative filters in which they can have confidence.

Responsive Organisations Use Information

Responsive Organisations don’t exclude information. They work it. Instead of trying to pass it around through series of filters, these organisations seek to enable people to make use of the information they have, to share it on a pull basis and to create new and valuable information to assist their work.

Think for a minute of the key elements of responsive organisations:

  • External orientation: Opening up the organisation to its environment and orienting it this way pushes the traditional hierarchical approach of information management to breaking point. When the ‘facts are outside’ to quote Steve Blank, management must embrace different ways of managing information.
  • Transparent Network structures: Network models of working are pull structures unlike hierarchies traditional push models of communication. In a network people have the ability to find the information that they need.  We don’t need to push it around we just need to make it findable through approaches like working out loud. This transparency contributes to trust and shared context, critical elements to reduce the decision making overhead.
  • Autonomy to employees: If employees have autonomy they don’t need to share their context and rationale with their boss to get a decision.  They just make the one that they think best.
  • Experimentation: Experimentation further shifts the burden of information and decision making. When the right answer is the one that survives a test, we don’t need meetings up the chain to get an OK.
  • Purpose: As most managers know communicating strategic intent down a hierarchy is hard work. Either the strategy doesn’t survive translation or the application in a different frontline context is a challenge, particularly balanced with the rules and regulations that must come with it.  Purpose is easier to get. Purpose comes from within an employee and can be a richer and stronger guide to their action.  Purpose reinforces autonomy.

Responsive Organisations adopt new approaches to filter and use information. Instead of relying on the decision making of a few overwhelmed managers in the hub of the network. Responsive Organisations enable every node to filter and to act on the information. That approach accelerates both learning and action.

Don’t Know, Learn

Hierarchical management is obsessed with what is known. (This is both the appeal and the failure of ‘big data’) Managing what is known is the objective of the system. Instead of knowledge the system becomes an information filtering system and critical insights are lost. However, you don’t need to know as much if you can learn.

Knowledge is not worth much as a stock. It value comes from use in a flow. Insightful analysts like Dion Hinchcliffe and John Hagel are already describing a new information platform view of the next phase of our connected lives

Responsive Organisations will be those that develop the approaches and practices to best use information in new ways to achieve the purposes of the organisation and realise the potential of its people. That’s called learning.

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