by Rod Collins
In the first five parts of this series, we have made the case that a nineteenth century management model is unsustainable in a twenty-first century world. The recent technological revolution has suddenly thrust us into a new world with a completely different set of rules. This new world is a hyper-connected global village where, for the first time in human history, we have the means to self-organize the work of large numbers of people without the need for central organizations. And what’s most amazing is that, as inconceivable as it may seem, we are learning that the new forms of self-organized networks that have recently emerged are often smarter and faster than their traditional bureaucratic counterparts.
Before the digital revolution, Wikipedia, Linux, and other forms of crowdsourcing were simply not possible. Twenty years ago, few of us could have imagined that you could build a successful computer operating system or an online encyclopedia using only volunteers working without a plan, without assigned tasks, and even without pay. Yet today, the open source Linux operating system is a $35 billion enterprise with a 12 percent market share, and Wikipedia has completely displaced a two-century old business model in a single decade. We do live in a new world with new rules.
As managers come to the realization that the future of management will work very differently from its past, they need to be clear about what’s changing and what remains the same. The primary work of management is the performance of two timeless accountabilities: strategy and execution. That’s not changing. What is changing is how these two responsibilities are carried out. For well over a century, we lived in a relatively stable world where change was incremental and maintaining equilibrium was a prime value of organizational work. Accordingly, the foundation for strategy was centralized planning and the focus of execution was control. When management’s basic tasks are to plan and control, top-down hierarchies work. They may not necessarily work best, but they do work well enough.
All that changed with the digital revolution. In today’s fast-forward world, change is far more disruptive, and resilient adaptation has become the prime value of organizational work. When business survival depends upon the organization’s capacity to rapidly adapt, the foundation for strategy shifts from fixed plans to continual iteration and the basis of execution shifts from top-down control to highly collaborative co-creation. The reason that networks are outperforming and displacing hierarchies in in our new hyper-connected world is because they are better designed for iteration and co-creation.
Each of the innovative models that we have presented in this blog series values iterating and co-creating over planning and control. In Gore’s lattice organization, because there are no bosses, no one can bark orders or demand compliance. Gore’s bossless model requires people to learn how to iterate and co-create if they want to produce results. The fundamental dynamics of the Agile movement call for cross-functional teams to work in short sprints and frequently bring everyone together to agree on what’s working, what’s not working, and how they can improve for the next sprint. At the core of Radical Management is the notion that the purpose of a business is to continually delight customers, and that purpose is met best when self-organized teams create extraordinary value by working in client-driven iterations. And Wiki Management’s fundamental proposition is that the most effective organizations in a rapidly changing world build collaborative networks that leverage the collective intelligence of the many rather than top-down hierarchies that amplify the voices of the few. Collaborative networks are inherently iterative and are great enablers of co-creative activity.
Despite the remarkable performance of innovative business leaders who have built their organizations around the dynamics of iterate and co-create, traditional managers fiercely resist the future of management because they find it very difficult to break the habits of planning and control. Their professional identities have been built upon the notion that power and the compensation that comes with it belong to those who are in charge. If they are not planning and controlling, they fear they will lose both their power and their compensation. Unfortunately, the insecurities of managers more focused on preserving their organizational standing than on adapting to rapidly changing markets could very well be the single greatest threat to the survival of many of today’s best-known businesses. And what’s most interesting is when well-known businesses fall, most of us hardly notice. Few of us are missing Borders when Amazon makes getting books so easy or Blockbusters when we have the conveniences of Netflix.
However, attempts of traditional managers to thwart the future of management are futile. In a post-digital world, we are rapidly learning that power is more a function of being connected than being in charge. That’s why one viral YouTube video by a mistreated customer can cause highly paid executives to quickly regroup and defer to the wishes of the crowd. Today’s best-run organizations—Amazon, Google, Gore, Morning Star, Valve, Whole Foods, and Zappos—understand this new realty. They understand that managing great change means changing how we mange and that the most effective organizations are networks where highly-connected workers continually iterate and co-create on behalf of their customers rather than hierarchies where a few at the top manipulate the levers of planning and control to preserve their vested interests. These early pioneers are harbingers of the future of twenty-first century management—a future that’s inevitable for the simple reason that the technology revolution strongly favors iterative collaborative networks over tightly planned and controlled hierarchies.
Rod Collins (@collinsrod) is Director of Innovation at Optimity Advisors and author of Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World (AMACOM Books, 2014).