Changes are the only constant of today’s world. Interconnected world that we live in is build on speed, information and quest for development. In such a world where authority is not built on some external force or information deprivation, old concepts of hierarchy, authority of power, vertical organization, one-way communication, are becoming un-attractive and un-competitive. Not only that world is becoming flat, but society with its virtual reach and economy with its global presence are also expanding into horizontal direction more then vertical.
Niall Ferguson in his book The Square and The Tower is talking about this change and he explains from historic perspective how Networks are replacing Hierarchy as power centers in modern history.
Social networks and modern communication tools bring new dimension to social environment and interactions where we know everybody, but we are bound to nobody.
And in business world you see CEO’s of large corporation talking about bringing startup thinking inside their organization. Microsoft CEO talking about need for strong cooperation with partners, embracing agile approach to new product launch with a lot of live testing and incorporated changes based on live feedback. IBM CEO talking about changing development approach to design thinking after years of pushing internal culture to move faster and faster. Both of them talking about data ownership (that owner should control them) and technology transparency both approaches that those two companies try to avoid in times of their supremacy.
All those changes lead to rise of new management practices that try to address this gap between efficiency of hierarchical top-down organization and development and reach potential of flatter, network-based organization. Most of them are not new, they are just using change in momentum to get more recognition. Even before companies tried with matrix structure to integrate functional and positional approach in company. They also integrated project-based processes in order to address important elements inside existing organization, but as speed of changes is evolving so does need for new, more aggressive practices
One of them is Design Thinking approach to development. It is not new approach, its origins can be traced to 1969, but in 21stcentury this approach is getting used by more and more companies, mostly because environment become ready for it. In general, we can describe it as solution-based approach to address customer needs. Stanford based Institute of Design is describing process as 5-stage process. Stages being empathize, design, ideate, prototype, test. Stages are not always done consequential but can also run in parallel and based on received feedback can be repeated several times. It seems that in the world of cloud and microtransaction this will be leading approach of development where companies will need to step out from their shelves and embrace wide community of their customers and partners.
Interesting approach that is trying to address new dynamics in today’s economy is also Holacracy. Concept very close to organization of one of blockchain brightest star company named ConsenSys. Its cofounder Joseph Lubin is actually seeing it as even to rigid, but he believes that implementing many of its philosophy into company processes and structures will help his company to keep edge in one of the fastest and agile industries at this moment.
Holacracy define itself (based on their webpage) as: “ Holacracy® is a new way of structuring and running your organization that replaces the conventional management hierarchy. Instead of operating top-down, power is distributed throughout the organization, giving individuals and teams more freedom to self-manage, while staying aligned to the organization’s purpose. It involves: a new and evolving organizational structure, innovative meeting practices designed for rapid execution, a shift in mindset toward greater autonomy and taking action.” It is also not new approach, its beginnings can be dated back to 2001, but through its development it also gains reach.
There are other management practices and development approaches out there that want to tackle new reality. Fight between startup agility and corporate structure is fight on both ends. Venture capital trying to shape startup community more towards corporate structure and corporate management trying to get some of startup sparks into their rigid process driven organization.
If we only focus on corporation quest and put that management initiative into broader perspective, the main question they should ask is, how we can move from Tower to Square if I use Ferguson analogy. If we want to build different company cultures and improve group dynamics, we need to build new management skills outside traditional business competencies. If we are to flatten business structure, if we are to build company effectiveness on goal-oriented approach instead of using power of micromanagement, if we are to trust people to cooperate inside goal-oriented teams with clear role and responsibility for each individual in those teams, we as a leader need to expand our understanding in people management area from building emotional intelligence to upgrading it with social intelligence. Daniel Goleman also discovered that an upgrade is needed in human development as he expands his research field to social intelligence.
Simple truth is that people act differently when they are alone then when they are in group. Let’s be honest people believe that tree is producing sound in the forest only if others saw it. Kant’s categorical imperative is more abstract concept then reality in today’s world. Understanding employee capacity not as individuals but as group member – their social conscious and social abilities and understanding group dynamics are skills need for modern management in order for them# to feel comfortable in environment where they should transfer some of executive power to working groups and build their leadership on steering those groups towards strategy execution. Sometimes this require totally new approach towards company organization, goal setting (F.A.S.T instead of S.M.A.R.T), process reorganization…and sometimes it means only different management approach.
And with speed of changes in business reality, where you actually need to run in order not to stand still, being ready for new approaches is not requirement only for those who are in trouble and for whom changes are necessary in order not to become Darwin’s lost species, but also for champions of today, so that you don’t came in situation when you need to launch idea of buying manufacturer of electronic car when your phone sales drop in order to protect value of your shares.
