A Social Culture

I have been thinking a lot about corporate leadership and culture lately and it is clear to me that current business leadership style and structure is not what will lead us into a brave new world.

First let me explain why we need a brave new world of organizational structure. Hierarchies of people were set up to facilitate the flow of information back when one-to-one communication was the only option.  It was the only way to scale a business. The problem now is that with the advent of email we entered an age where the speed and scope of information flow has increased dramatically and no longer needs middlemen to gather, filter, and channel it. But we have these 'leaders' who sit at what once were information hubs within the organization.  To keep their jobs - since they are no longer needed to help facilitate information flow - they often actively hoard information through their control of the resources and people that work for them.  It's actually kind of an ugly thing and they spend so much time hoarding and politicking that they forget to look up and realize that leadership, not power and control, are what is lacking. To keep it all in the family, the people that get hired and promoted into these positions are politically savvy, willing and able to be controlling, and part of the club. They are vastly more interested in whether they personally do well then whether to company does well collectively and they are threatened by too much initiative on the part of their employees. They act this way because that is what current organizational leadership rewards.

I think we are moving to an opt-in world where employees opt-in to projects, leaders opt-in and emerge into their roles.  Paul Hemp use Barak Obama as an example of an opt-in leader - he did not really rise up through a Democratic grooming process. True collaborative environment require leaders that not only opt-in but are given the mandate to lead because they can effectively inspire others to act. It is a very different leadership style - one I wrote about in my post "Lead from the Back". The organizational structure implied by that also means that the hiring of all employees needs to be primarily value- and motivation-based. What if instead of asking for a resume, HR asked for an essay on what motivated you and what your passions were?  It's how the best colleges and universities operate and you get very strong and consistent cultures in that setting. Plus, people wither if they are asked to do the same job for years on end - if companies hired on values and let people move to new projects and to new skills sets when they were ready the productivity and loyalty gains would be immense and you would have a employee based that was widely well-rounded and adaptable.

A change in leadership and culture of that magnatude requires radical rethinking of HR & operations - and new tools by which to manage that network of employees. It's a fun thought...but how do we get there? The big question for me is this - are investors ready? Without strong board and investor support the only companies that will be able to radically transform will be private companies with visionary leaders.

What's your vision of a social organization?

Comments

[MikeTrap]

I think this era is coming to an end on its own, at least at the top. There was a great piece in Fortune a while back about the end of the "celebrity CEO," and the birth of what they called "The Lifeguard."

The piece is here, I've discussed it without other CEOs and the enlightened ones seem to agree:

http://money.cnn.com/2008/11/13/news/companies/reingold_newleader.fortune/index.htm

[Richard Fahey]

I completely agree. Corporations and managers need to change and adapt to environments where information flows freely outside the traditional management structures. The days when information traveled through written memos are long gone, yet managers often still act as if their role is to co-ordinate information from the top down. In an E2.0/Social organization, the role of management should be to harness the potential and knowledge of employees through flatter collaboration and communication paradigms. Their role should be to encourage more collaboration and provide the environment in which employees can motivate themselves and reach their potentials.

[Francois Gossieaux]

I agree with you Rachel and wrote on a related topic last week on my blog (http://tinyurl.com/dglkrn).

With an increasing number of people bringing their own tools to the workplace, I think this will happen one way or the other - with or without the right leaders. Of course, those that can embrace this social messiness earlier will reap the biggest rewards. After awhile, the benefits of doing it will become level-setting instead of game-changing.

[Rachel Happe]

Hi Mike/Richard/Francois -

Thanks for adding to the conversation - it will be fascinating to me to see how this plays out over the next year. Who will embrace it? Who will not and what will happen to them?

I certainly don't have the answers exactly but I do feel strongly that it is a current source of friction in organizations and that it is going to change organizations...whether they like it or not.

[Kevin Griggs]

Organizational structures are changing. The trend for flatter hierarchies is being driven by the need to reduce the expense associated with middle management functions. A consequence of flatter organizations is that communication layers are diminished which results in fewer information "hops" between the end-consumer to the company leaders. As a result, we see a trend for more self-service services to customers.

In the past several years, technologies have been created to support information self service to a greater extent. Web services, for example, opened a channel in larger corporate environments which allowed consumers greater access to information.

As for the social/ cultural aspects of a flatter organizational structure, I agree that companies are moving to a value-based approach for selecting talent. However, I don't necessarily agree that companies are headed to an environment where people will "opt-in" or "opt-out" of projects of their own accord.

The reason why is based on Anthropology 101.

Humans always chose to spend their time on behaviors of interest or on something that provides perceived internal value (to themselves) versus something that is less stimulating. Simply, all people will opt to do the fun stuff.

The ugly reality of corporate life is that much of the work is mundane and - while this work may be important to top line revenue - may not provide the emotional and intellectual stimulus that people are naturally drawn to.

So what happens if organizations move to a full opt-in / opt out approach? Everyone would opt-in for the fun /most important projects and opt out of those that they perceive will not provide internal or external reward. Simply, no one wants to take out the garbage… and the larger the organization... the more garbage.

This is the reason that business schools teach that hierarchal /command and control structures are ideal for large enterprises but less so for smaller companies. All that said, organizations will be forced into becoming more collaborative if, for no other reason, than the reduction in the layers of management creates a burning platform.

Companies will not be drawn into creating a more social, collaborative organizational structure unless doing so provides the opportunity for higher profits.