Hierarchy has become the bogeyman of the "future of work" movement. Listen to some commentators, and it sounds as if the honest worker in the corporation is being oppressed by power-crazed managers, hoarding information like Gollum with a hangover. Presumably some of these managers were promoted from honest worker level, so does hierarchy bestow power, which immediately corrupts?
Not so fast. There are definitely bad hierarchies, but like all organizational forms, they can be done well or done poorly. Hierarchy still has a role, especially in larger, more established businesses, and some scenarios exist where a networked approach would be detrimental.
"Work like a network" is Microsoft’s message for the future of work. In part it sounds like Microsoft is talking about the people-centred flow of information:
Listen to the conversations that matter most to your business, both inside and outside your company, as soon as they happen.”
This fits well with the Office 365 tool suite, particularly Yammer and Delve.
But Microsoft’s message also talks about Adapt and Grow, making smarter decisions and innovating. This is much more of a fundamental shift in how companies operate than how information flows.
Many labels are used for this future work vision, including The Responsive Organization (sponsored by Microsoft), Social Business and sometimes just Networks. They all promote a shift away from hierarchy and the industrial age in favour of networks of peers.
Networks have serious appeal: they can be more flexible, innovative and for some a more engaging way to work through increased autonomy. As we move to an any time, any place digital workplace, it is clear that hands-on management has to change too.
However, what seems to be missing from the discussion is a recognition that networks have downsides too. We need to design organizations that best match their management structure to the task, rather than taking an absolute view. Many of the leading examples of the network movements, such as Zappos and Valve have been networked from initiation, and remain relatively small. Taking a current company and starting to work like a network may be a different matter entirely.
For example, there’s something of a paradox when you look at the adoption of Enterprise Social Networks (ESNs) such as Yammer. On the one hand, they appeal because they do away with power and hierarchy. On the other hand, they seem to need leadership support before they take off. Isn’t that asking turkeys to vote for Christmas? No wonder some leaders are wary of them. We’d do much better if our claims about ESNs were less about workplace revolution and more about improving working life for everyone.
Good Hierarchies are Better than Sparse Networks
Organizations structure themselves around their core processes. Done well, this means that people who need to cooperate closely or share knowledge are closer than those who don’t. This is starting with a designed approach and can be quicker than waiting for it to happen organically, so long as further organic growth isn’t supressed.
Hierarchies of Role Don’t Reflect Networks of Collaboration
Hierarchies coexist happily with other networks — you don’t have to remove the hierarchy to get many network benefits. Let's not forget that hierarchies are networks too. It’s easy to draw a strict hierarchy and make it look more lean than a well-connected network (see below). But this is a trick: if you take an org chart and add in all the lines that indicate “communicates with,” it would look like a network. In the illustration, B and C are the same network rearranged.
Networks have their dark side. Old school ties, cliques, inner circles can be worse than hierarchy. Why? Because the way they operate and the criteria for membership are less transparent than a formal hierarchy. In a good hierarchy, power is allocated to someone on the basis of demonstrated competence (it’s called "promotion"). Good companies have refined this process for years to make it equitable and meritocratic. In networks, power can instead accrue around popularity and that can be gained independently of competence (it’s called "self promotion").
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