Leadership In A Flat Organization

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Why are IT departments behaving like this?

J.P.: It’s because of risk management. You know as they say, nobody got fired for buying IBM or Microsoft. But the large corporations that said this are now facing change at an unprecedented speed. Today they may still say “you will not, thou shalt not”. But behind the scenes they are all busy working out how do to do it. IT said the same thing about BlackBerrys, and mobile phones, even about laptops. Yet all these things still happened. It is going to happen, it’s just a question of when.
And of course we are always going to be faced with critical issues like safety and security.
There’s a tension between privacy, confidentiality and secrecy on the one hand and collaboration, sharing and community on the other. There is also a generation conflict as the older generation are still saying “You’re crazy, thou shalt not share, information is power” while what the kids are saying is, “I’ll share what I do, I’ll share what I feel, I’ll share everything and something beautiful will happen.”

If you look at the organisational chart of smaller companies, it still says ’director’, ’head of’, with a couple more levels of hierarchy tagged on. What would a modern organisational chart look like?

J.P.: We tried to change this organisational structure a number of times but we didn’t have the information flows or the infrastructure to do it properly. What you need is the dynamic reallocation of resources which becomes possible with a matrix.
In the case I am personally learning more from video games. In today’s video games the first thing you see is a feature like a sandbox or training ground. It’s a simulation where you are not playing the game, you’re just learning. This kind of sandbox capability is going to come out everywhere at work. After you finish it, you are able to go in and have a basic understanding of what powers you have, what tools you have and you also have a dashboard with feedback from your environment. And then you go out to find other people you want to work with. That kind of structure will start reflecting itself in an organisation.

If you build these networks, in the way you just described, doesn’t it also mean that people become more responsible for what they are doing?

J.P.: Absolutely.

Would you say that this new kind of leadership also requires new ways of remuneration?

J.P.: Yes. I think you will find that historically one of the reasons why it has almost never been possible to introduce team bonuses is because the …


… incentive structures were not about sharing, but about hoarding power and information.


What I think we will end up with is payment in two forms. One kind of payment that has to do with your skills and what you contribute to the company – this is the horizontal resource element which you price according to the market. And above and beyond that is the reward for success which is team-based.

Do you see any good examples already out there?

J.P.: I go back to video games. Even when you’re playing rudimentary games, it becomes quite clear that if you complete a quest certain things will accrue to you and your team. There’s a pot of gold, extra weapons, perhaps an extra life and so on. This has always been the case in gaming. Now when you go through massively multiplayer games, you see groups of people acquiring prizes for completing quests or missions, and there is a way of sharing which tends to be equitable. It gets worked out with the game mechanics. If we look at this as a company, we are sure to find ways of finding solutions for rewarding team-based success.

When you open up these silos within enterprises you allow leaders by reputation to emerge. Isn’t there a conflict between them and the leaders pinned down in the organisational chart?

J.P.: I think we are going through a transition. As the hierarchy moves towards the network, there are going to be some tensions. But role-based leadership and outcome-based teams are going to operate in a parallel world to the classic career development hierarchy. If the reward mechanism is right then the people who are on-the-job leaders will not want to fight to become functional heads. The big challenge is that the historical model said we believe in a flat organisation and collaboration, but under the surface what really mattered was your head count and the size of your budget. We would say one thing, but we could not actually cope.
Take me as an example. Today, I am in a job where I am really enjoying myself, but in terms of the number of people I have reporting to me, it is the same as on my first day at work: zero. These are the final stages of leadership that I am learning about, leading through influence and guidance. You still are accountable for results, but you do not have any of the end-to-end control. This means that your reputation matters; the way you behave will determine whether people will listen to you or not. And it’s not a one-way street. If you do not understand authority, then you cannot use it. So I must first understand whose authority I am under and then say what my soft-hands leadership is. How do I guide and help and assist people who do not work for me?

Would you say that bigger companies find it much more difficult to adapt than smaller companies?

J.P.: I don’t know. Everyone cites the case of IBM and how the elephant learnt to dance. When you have scale you put things into place in order to protect that scale from instability which tends to get in the way when you are trying to adapt quickly. The small organisation finds it easier because it can operate better in an amorphous state. It does not need to have all the answers. Large organizations need to have a little more certainty about what they are doing, but when they do have this certainty they can execute at scale. So I do not know whether the tortoise or hare will win because I do not think of it as a race. They are two different kinds of animal with two different speeds …
It is similar to seeing how China has adapted to the industrialised world. Some people would have said it is not possible; it looks like command and control. But when you dig down deeper, you find that the culture did indeed allow sideways collaboration. John Sealy Brown and John Hagel have written some great studies on this. I think their last book is absolutely essential for understanding the organisation of the future.

About Leaders And Followers
(Gunter Dueck)
A Wake-up Call For Despots (Lee Bryant)
Traditional Management Stopped Working! (Stephen Denning/ Luis Suarez)
Doing It The Wiki Way (Frank Roebers)

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