There is a new organization competing with the traditional organization. It is the organization of the customer.

Customers are more organized and more empowered than they have ever been. In traditional organizations, we have had management that represents the owners, and unions that represent the employees. But we have never had an organization to represent customers. The Web is that organization. It is a loose, though highly effective organizational structure for customers to communicate and collaborate with each other, and where appropriate, make decisions that they then act on as a whole.

Organizational effectiveness depends on authority and trust. Within traditional organizations, both of those are in decline.

  • 86 percent of employees say they must trust their boss in order to do their job effectively. However, 26 percent of employees say that their trust in their bosses declined between 2014 and 2015, according to a study by Interaction Associates
  • Half of employees don’t feel respected by their bosses, the Harvard Business review reported in 2014
  • Year in, year out, Gallup has found that globally 70 percent of employees feel disengaged from their jobs
  • The yearly Edelman Trust Barometer surveys have “documented how, collectively, our trust in our fellow citizens, consumers and internet users is beginning to outstrip our trust in business leaders, politicians, charities and news outlets,” the Financial Times stated (paywall)

Trust is shifting away from traditional organizations, the establishment, the elite. It is moving to "people like me" — my peers, my friends, my family.

Traditional organizations that think they can dictate to customers with clever marketing and advertising are living an illusion. Such organizations matured in an era when they controlled the means of communication and when they had populations that looked up to them. That age is gone.

The customer is the new organization. On Facebook customers are marketing their perfect lives. On LinkedIn, they are marketing their perfect careers. On Google they are advertising, saying, hey I want to buy this, or I want to do that. People become a political party on Twitter. They become retailers on eBay.

Organizations like to do market research on their customers, but today it is customers who are doing the research on organizations. And what they are discovering often feeds their distrust in the establishment, the elite, the traditional power structure.

The Internet gives people more abilities and more power. From this flows more confidence. People trust themselves more.

As this huge societal shift occurs, many of those within traditional power structures remain delusional and smug. They talk about employee experience while delivering digital workplaces more akin to torture chambers. They talk about customer experience as they continue to rip off and exploit their most loyal customers. They talk about digital transformation as if all they need to do is buy some new technology.

The biggest transformation we see today is the transformation in power structures. Traditional, hierarchical management will fade as collaborative, team-based, collective intelligence decision-making rises.