The Network Always Subverts the Hierarchy

Human relationships are flexible and driven by shared information, influence, trust and other personal dynamics. These dynamic relationships will subvert any formal fixed hierarchical relationships.

We see the fixed relationships of the hierarchy. We obsess about their nominal power. What we don’t see is how the network wins slowly through human relationships. Networks of information, influence and trust shape how the hierarchy behaves:

  • Want a positive decision from the CEO? You know who to lobby to influence his or her opinion.
  • Want to know why some customers can get what they want? Look for their networks and connections into your organisation and into competitors.
  • Why do all employee emails leak within minutes? Look for the gossips and informal relationships outside the organisation.
  • Want to know why some are promoted over others? Look for the networks of previous experiences, trusted relationships and reputation helping careers along.

As soon as a new hierarchy is created or control processes are tightened, human nature starts subverting its effect in the name of relationships of information, trust and influence. The rational slowly yields to the relational. The network wins in the end because it leverages the human social process of decision making. 

Fighting the influence of networks makes life less human. Embrace them as a part of any hierarchy.

Micromanagement & Autonomy

One consequence of better communication is little discussed. Better communication has enabled the school of management that micromanages employees. We would do better to use our communication technologies to enable our employees to realise their potential.

Management in the Dark

We are starting to forget what the world was like before pervasive communication. Read about the beginnings of our modern organisations in the 19th century and you are always surprised to consider the barriers communication presented. 

The flipside of the barriers to communication also meant that managers had autonomy. Before the railroad and the telegraph, you didn’t need to be very far away at all to be required to manage your branch, factory or location with complete autonomy. All the decisions required to run a business like hiring, sourcing, pricing, distribution, financing and distributing profits, were managed by local managers. There were no alternatives. There was simply no way to seek guidance in time for most of the decisions required to succeed in the market. The need to trust a manager in these circumstances meant that many corporations relied on family members, trusted associates or had real limits to their scale.

Global Micromanagement

Enhanced communication technology has enabled organisations to manage their business on a global scale. The two-way flow of information has enabled trust to develop in the use of cadres of independent managers. It has also allowed those with less trust in their managers to micromanage on a scale that has never before been possible.

Look at the marketing materials for big data and HR analytics offerings. Many of these solutions are promoted as ways to know more about your business and the actions of your employees than ever before. The ‘golden goose’ school of management then dictates that you tightly manage your employees leveraging the rivers of data, the ability to adjust process controls and to communicate in real time. These communications are increasingly mechanistic and some even claiming value in automating them. Increased efficiency of your employees is the goal. However, that efficiency represents a massive trade-off in effectiveness of employees and the organisation.

Better Understanding, Alignment and Trust

Once again organisations are facing the need to drive autonomy of employees. Because of the pace of our economies driven by modern communication technology, we have arrived again at a point where autonomy is required. In the past, communication was too slow to meet a competitive local market. Now communication in the competitive global market is too fast. Employees can’t anymore wait for advice from head-office or be constrained by a policy that no longer refects circumstances.

We need to recognise that the alternate opportunity of better communication is better understanding, better trust and better alignment. With better connection, we can enable people to achieve exponentially better performance because we have the foundations of trust. If we chose a human approach over a mechanistic one, we can leverage the many human talents of our people. That diversity has far greater value than relying on only the decisions of an all-powerful all-seeing management team.

Global communication technologies have made learning the competitive advantage in the modern organisations. Now that they also allow a massive scale increase in understanding and trust, why wouldn’t we want to involve all our people in leveraging their insights, talents and knowledge?

The future of work is not better micromanagement. The future of work is how we better realising human potential. That will take trust and human connection.

Building Bridges

The bridge, then, is a symbol both of choice and connection. We determine in which direction we wish to travel. We also work to connect people to people and people to knowledge…Our role is to make the right choices so that we build bridges towards holding spaces where positive connections can be made in the future that will benefit society. – Richard Martin

Bridges go from one side to the other. They connect. Bridges don’t make value judgements about the shore.

In our passion for change it can be easy to dismiss the value of other ways of working. In so doing, we make it harder to bring change about. Before we can encourage people to new ways of working, we need to connect with where they are today.

Change Agents aren’t masters of elegant theory. They connect people to new practice. They help people take up the how. Change Agents are as much marketers, salespeople and evangelists as they are theorists. Effective change connects the new and old domains.

Build a bridge to a different opinion. Walk awhile on both shores. Your influence will be greater for it

Arbitrary Power

‘A tyrannick and arbitrary power …is contrary to the Will and Happiness of any rational being’. – Benjamin Franklin

Arbitrary power has a huge effect on the human psyche. We have devoted much of our efforts at civilisation to restrain its negative effects. So why does your organisation still have arbitrary power?

The Civilisation of the Arbitrary

The cost of arbitrary power on human performance is real. We have spent centuries trying to restrain it.

We began sacrificing to fickle gods in efforts to control the weather, prosperity or safety in a harsh and uncertain world. We build institutions to protect us from the arbitrary powers of other tribes and eventually our own. We invented insurance to mitigate the uncontrollable. Our culture is rife with constraints on untrammelled power: etiquette, rule of law, political systems, etc.

The Last Domain

We’ve come a long way to constrain the arbitrary power in our businesses. All sorts of legal and social changes have made the modern organisation in many ways different to that of the early capitalists. However our organisation remain the social sphere with the strongest residual legacy of arbitrary power.

The costs of fickle managers are real. Engagement is poor. Trust is low. The psychological costs of a highly uncertain workplace are rising. We even impose our corporate power on customers and the community in arbitrary ways. All this results in wasted human potential at work and wider social impacts

If we have spent so much effort to constrain power and to make it fit within human relationships, why don’t we extend that throughout our workplace? Next time you have a choice ask yourself is there a way to make this process more engaging, transparent and predictable? You may not change the results of the process but you will be making work more human and improving the long term outcomes.

The Emperor’s New Clothes

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“By breaking the rules of the game, he has disrupted the game as such. He has exposed it as a mere game. He has shattered the world of appearances, the fundamental pillar of the system. He has upset the power structure by tearing apart what holds it together. He has demonstrated that living a lie is living a lie. He has broken through the exalted facade of the system and exposed the real, base foundations of power. He has said that the emperor is naked. And because the emperor is in fact naked, something extremely dangerous has happened: by his action, the greengrocer has addressed the world. He has enabled everyone to peer behind the curtain. He has shown everyone that it is possible to live within the truth. Living within the lie can constitute the system only if it is universal. The principle must embrace and permeate everything. There are no terms whatsoever on which it can co- exist with living within the truth, and therefore everyone who steps out of line denies it in principle and threatens it in its entirety.” – Vaclav Havel, The Power of the Powerless

What exactly is the power in your company’s hierarchy?

A Culture of Consent

Debates over structure, governance and power dominate management. We want to get the right balance between command and autonomy as if this is a formula that can be designed externally and imposed. The realities of power in organisations are simpler than we perceive.  

An organisation is not a state. Despite their orders, minions, wealth and luxurious surrounds, senior managers are not rulers. There is no army, no police force and no jail. Shareholders are not voters to provide legitimacy to coercion. Security guards have limits on their ability to apply force and is rarely constructive. Coercive power is in organisations is rather like the Emperor’s New Clothes. Senior managers know this well because daily they experience the limits of their ability to order.

Organisations have one form of power – exclusion through exile or ostracism. Senior management have security guards to escort you from the building.  Management can encourage others to turn on you. They can deprive you of this source of income and relationships in a community of peers, but have no other power. Look closely, they probably can’t even deprive you of resources, as these are usually under the day-to-day management of your peers. You already work around that issue daily as you make your organisation’s budgeting work.

All the power of the hierarchical leaders of organisations is given to them by the culture within the organisation. It is social influence, not power backed by force. Like the greengrocer in Vaclav Havel’s example above, you either live within that culture (and sustain its power) or you don’t (and become a dissident or rebel).

If the Emperor of Management has no clothes..

  • Change is closer than you think. Start to create new influence or question the sources and approaches of power and you are already leading change, potentially far more quickly than you realise.
  • Management are not a blocker outside the system preventing change. They are a part of the same system and equally aware of its issues. Encourage them to adapt management practice through conversations about influence, culture and the practices of power.
  • Network with like minded peers discuss and debate what needs to change. How should influence be structured in your organisation?
  • Culture is not a project just for the HR team. The consequences of the real cultural norms are far wider and far more important than a poster of values. Culture will shape what the organisation perceives and how it is able to respond.
  • Living in reality and being more human is harder than you think. First, you must separate reality from the views that you have chosen to believe. Second, you must continue to engage with the reality of the situation without the warm support of culture.
  • The future models of power in your organisation are a discussion for the community. Adopting elaborate models of autonomy and decision making without this discussion is swapping one naked emperor for another. If you adopting a new model, what is it about this model that makes it closer to the reality of influence in your organisation?
  • The ability to survive and restart reduces the threat of management power. That means a sense of personal purpose, savings of six to twelve months of living expenses, marketable capabilities and good external networks. Removing the danger from exile and strengthening purpose against ostracism frees the rebel to lead change.

“For the real question is whether the brighter future is really always so distant. What if it has been here for a long time already and only our own blindness and weakness and has prevented us from seeing it around and within us and prevented us from developing it?” – Vaclav Havel

Management Overgrown: Time for Regrowth

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Bureaucracy has become the definition of the kind of management organisations are seeking to avoid. However, bureaucracy started as a significant step forward in management systems. As we design the future management practices we need to ensure we do not see the same overgrowth.

Fixing Management History: Bureaucracy

Bureaucracy was created to fix problems with the previous systems of management. Bureaucracy has its strengths relative to the inconsistent, corrupt and ineffective regimes that preceded it. However, any strength overdone creates a new weakness.

Here are some of the positive changes that came with bureaucracy. Without continued innovation, these practices took on a logic of their own and became overused:

  • Incompetence, influence and nepotism were addressed by a hiring and promotion on managerial competence and expertise. Overdone this expertise focus led to an unwillingness to learn, internal focus and new forms of abuse of power.
  • Inconsistency and unpredictable management decisions were addressed by leveraging policy and hierarchical review. Overdone this led to stasis and disempowered managers who couldn’t address exceptions
  • Ineffectiveness was addressed by the clarity of division of labour bringing clear accountabilities and measurement of work. Overdone this led to breakdowns in coordination, ability to deliver and waste.

Emergent Management Practice

The reason bureaucracy resulted in these issues is that its design allowed little room for checks on its use. The focus on predictability meant bureaucracy was not generative. It had little or any capacity for new management approaches to emerge. The only approach to issues was the application of more bureaucracy.

As we design the future of work, we must take care that the changes we make address the right issues and do not become equally overgrown:

  • Solve the right problems in management today: Is hierarchy really the problem? It is human nature to obsess about power and the role of hierarchy in life. Hierarchal power is only one part of how decisions get made. Many of the approaches that ‘rid organisations of hierarchy’ can’t achieve that. There is a good argument that the issues above with bureaucracy are more about learning, use of knowledge, speed and decision making than they are about power.
  • Simplicity over complexity: Simple practices are more likely to remain transparent. When it is easier for people to understand the practice as a whole and keep its goals in mind, it is harder for people to take individual aspects of the management practice as their own end. Bureaucracy has been bedevilled by people taking means as ends. I suspect one reason Holacracy has found most implementations are ‘Holacracy lite’ is due to the complexity of its original proprietary formulation.
  • Generative practice: Management practices that challenge users to look for improvements in the practice have inbuilt protection against overgrowth. I focus on the generative capability of Big Learning because the two core elements of learning and enabling work and learning keep a focus & accountability on all in the management system on how to improve the work and its outcomes.

The only way to prevent the overgrowth of new management practice is to be constantly pruning and reshaping our work in the efforts to learn and improve.

The Problem is Everywhere

The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality. – Friedrich A Hayek “The Use of Knowledge in Society”

Yesterday I met with an organisation that wanted some of my help as they sought to solve a problem. The organisation was developing a new knowledge sharing system to enable is staff to be better informed about products and processes. There was one slight issue with this problem. The organisation already had multiple systems to enable its staff to be better informed about products and processes: intranets, social networks, training, help & support tools, automation, etc.

Problems Everywhere

As we asked why these other systems didn’t work it became clearer that the project team’s issue was that it was solving a problem for others, rather than with others. The explanations for needing a new system did’t stack up and suggested there was more that needed to be learned from the users:

  • ‘Most of the learning is peer to peer. We need to give them better options’: Why do they prefer to learn from peers who might be inaccurate or unavailable? Why will they change this if you offer a new system? 
  • ‘They won’t use a collaboration system because they say they don’t have the time’ : if time is a question of priority, why isn’t it a priority? To what extent is the culture, leadership and performance management of the team driving this lack of priority? If they won’t collaborate why will they have the time to use something else? What is there time actually spent on? What do they do instead?
  • ‘Those system don’t give them the answers they need so we are building a new one’: If the last system didn’t understand what was required, how do you? What does relevance look like to each user? What does relevance look like to their customers?
  • ‘They want help with process X, but we are building something innovative for all processes’: Why do they want help with that process? What’s innovative about ignoring the demand?

The Answer is Everywhere

The answers to these questions are dispersed in a wide range of people beyond the project team. They draw in questions of culture, of practice, or rational and irrational behaviour by real human beings doing real work under the daily pressures of customers and a large organisation. There’s a lot of learning to do.

We have the tools to solve this dispersion and gather insights into what needs to be done in the practices of Big Learning:

  • we can actively collaborate with the users and other participants in the system to get under the pat answers and explore the deeper reasons and problems
  • we can use the practices of design thinking to better understand and shape employee behaviour & the systems involved in action
  • we can analyse data to understand in greater detail what is going on
  • we can experiment and iterate to ensure that proposed changes work the way that we expect
  • we can enable and empower the users to create changes to their work
  • we can accelerate the interactions and the cycles of learning to move faster to better solutions

These aren’t parallel techniques to be applied independently. The practices of Big Learning work best as an integrated system that draws together the insights from all of these approaches to help organisations learn and work. Big Learning enables organisation to work with and through its employees to deliver change. Change does not have to be done to them.

The reason organisations need to develop systems to facilitate Big Learning is elegantly described by Hayek in the conclusion to his essay “The Use of Knowledge in Society”.  Hayek was critiquing the schools of economists who thought that centrally planned interventions designed by experts would be effective. The context may differ but organisations still use forms of central planning by experts to create change. These changes fall short for a fundamental reason – experts can’t know enough alone:

The practical problem, however, arises precisely because these facts are never so given to a single mind, and because, in consequence, it is necessary that in the solution of the problem knowledge should be used that is dispersed among many people

The practices of Big Learning help bring people together to share insights, learn and work as one.

I am and I do

Birthdays come around once a year. They are a repeating milestone. This year I have a small gift for myself – an absence of expectations. Instead I am focusing on what I am and what I do.

There is much discussion these days on the unrealistic expectations we place on ourselves. Every day’s to do list is a reminder to me that I fall easily for creating these expectations. Much of my life’s experience has taught me that most of the time we are neither quite as bad or as good as we think.

So this birthday, I am changing my expectations. I am.

On previous birthdays I have reflected on what I wanted to be. I set myself all kinds of milestones. I challenged myself to do more. Some I achieved but far too many became part of the overhang of what might have been. That overhang was mine alone, an unreal fiction and entirely unconstructive. Nothing more gets done because I once thought that I would have done more by now.

The last two years of working for myself has been a wonderful lesson in the importance of being & doing. I wondered what I might become when I began this process. I didn’t become anything. I am and I do. However, along the way I discovered:

  • I am helping people & organisations with collaboration, leadership, learning and the future of work, because it interests me and I work at improving my capabilities & connections every day
  • I am a baker because I bake whenever I can and I learn new techniques and approaches
  • I am a writer because I write whenever I have something important to say and I seek to get better with feedback.
  • I am enjoying a different life, because every day I am making new and better choices
  • I have a sense of purpose, because the purpose is in the work
  • I am happy. I just am. If I wasn’t, I would do something about it.

When other people want to hire your expertise, it is a solid reminder you are growing more every day.  When people admire your baking, or your writing or some other activity, it is a reminder that those skills are growing too. If nobody else notices, then you still know you are growing. When you ask yourself what made you happy today and there is always an answer, you are happy.

What you are now doesn’t matter. It just is. 

What you want to be doesn’t matter now. What matters is what you do today. 

Live and work your way forward day by day. I am.