Hierarchies and Networks

The effects of time and gravity on organizational structures

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I have been meeting with people as part of a group that gathers weekly to learn about how to grow personally and professionally in the area of leadership. It is essentially a book club for entrepreneurs, professionals and community leaders.

We are currently reading through a book by John P. Kotter called XLR8 (Accelerate), published by Harvard Business Review Press in 2014. The central theme involves two forms of interaction in organizational structures: hierarchies and networks. I will let Kotter help define these concepts:

Virtually all successful organizations on earth go through a very similar life cycle. They begin with a network-like structure, sort of like a solar system with a sun, planets, moons, and even satellites. Founders are at the center. Others are at various nodes working on different initiatives. Action is opportunity seeking and risk taking, all guided by a vision that people buy into. Energized individuals move quickly and with agility.

Over time, a successful organization evolves through a series of stages into an enterprise that is structured as a hierarchy and is driven by well-known managerial processes: planning, budgeting, job defining, staffing, measuring, problem solving. With a well-structured hierarchy and with managerial processes that are driven with skill, this more mature organization can produce incredibly reliable and efficient results on a weekly, quarterly, and annual basis (pages 5–6).

Notice the words “successful organization.” The book acts as a cautionary tale, using a case study that appears to be based on an actual global corporation where things went off the rails.

A Critique

In our group, I offered a critique of the book, but I received blank stares, silence, and in one case a defensive comment. As I have noted previously, the ideas that trigger a defensive reaction typically reveal a point of unresolved conflict. To better understand my critique, let me illustrate the problem using a mental model that involves time, gravity, and the physics of sand as a metaphor for human organizational structures.

Let’s think of the ways that humans organize themselves. We have several models to choose from in recorded history. Families, clans, tribes, cities, nations, races, religions, empires, monarchies, republics, corporations, military alliances, non-governmental organizations.

Each of these forms of human organization are a way of creating a system of values (for example, law and order) as a way to minimize conflict within the group. A higher value is assigned to specific individuals who are given the right to assert power and dominance over the other people because of superior strength, ability, status, or economic advantage.

Typically, the organizational structure takes the form of a triangle, with the supreme leader at the top, and individuals who report directly to those above them asserting power and dominance over the subgroups below them in the hierarchy.

The pyramid is the pattern of social dominance established by the ancient Egyptian empire. In a river delta, the landscape is typically flat. A pyramid is essentially a man-made mountain. The angle of the slope of the pyramid closely matches the angle formed by sand when dropped from a single point. The sands of time in an hour glass suggest the manner in which, over time, the grains of sand at the top are superseded by the grains of sand that come afterward. Given a square base, the sand will naturally form a pyramid shape, as the grains of sand fall off the edge of the shape of the foundation. When engineering a structure to defy time and gravity, the pyramid is one of the most enduring structures.

Built into the structure of the pyramid is the concept of birth and death. The older grains of sand become the foundation upon which the new grains of sand rest. Most grains of sand fall to the bottom to widen the base, or when the shape of the foundation has been covered, the rest fall off the edges of the foundation. Only a select few remain at the top. In the organizational pyramid, power, dominance, strength, ability, status and economic advantage are assumed by those at the top of the structure.

The modern equivalents of these ancient hierarchies are the corporation, in the private sector, or the state, in the public sector. Institutional religious organizations have a similar hierarchical structure.

Again, imagine grains of sand falling onto a square base. A flat organizational structure is typical of smaller and younger organizations. Leadership tends to be toward the center of the shape. Grains of sand fill in the gaps in the base, until the entire surface is covered. Then, the grains of sand stack on top of each other. Over time, the organizational structure assumes a pyramid shape as the organization grows and matures.

This mental model describes what Kotter refers to as the typical life cycle of an organization from network to hierarchy.

If a firm continues to prosper, its operational needs correspondingly increase and the management-driven hierarchy grows and grows. More processes are added. For a while, the network itself might also grow, as more and more hires play a role in the various initiatives that are seeking opportunities and helping the organization remain agile.

But at some point in the company’s continuing success, the hierarchy grows so large that it begins to dwarf the network. Sometimes a group of the original employees leave because they do not like what they perceive to be a “bureaucracy.” All of this leads to growing tensions between the agile, fast, opportunity-seeking network and the reliable, efficient, stability-creating hierarchy. Since the hierarchy side of the organization tends to control resources, and because at a certain point it becomes much larger than the network side, it begins to quietly yet systematically kill off the network side of an organization. This is not a malicious act. It just happens, naturally (page 68).

The solution that Kotter poses reminds me of another narrative, but I’ll get to that later. Let’s just say that the big idea is that the hierarchy and the network need each other to survive in a rapidly changing world. The hierarchy is necessary to maintain stability, but the network is necessary to adapt to changing technologies and environments as a way to capitalize on untapped potential and yet undiscovered opportunities. The answer is a dual system, seamlessly integrating the hierarchy and the network.

A strategy accelerator network, to be effective, must work seamlessly and organically with the management-driven hierarchy, so that the whole organization is getting today’s job done with efficiency and reliability, constantly and incrementally improving itself, and handling today’s increasing strategic challenges with speed and agility (page 81).

However, what I see in the vision that Kotter advocates is a bias. The first clue is the decision-making team that starts the process:

Davidson convened the sales division’s ten-person executive committee for a day-long meeting. He told his team that it was becoming clearer in his own mind what was required….(page 82).

Pardon me, but I can’t help but think that this is exactly the problem with the hierarchy. It is, first of all myopic and self-serving, only involving the people at the top of the hierarchy in the decision-making process.

Now, what are the conclusions that this top-down decision-making team comes to?

He also told them that the consultants had clearly demonstrated that expenses were already high; thus hiring new people to accelerate any strategic moves was an unrealistic approach. So they needed to get much more out of their current people. Simply pushing harder was not going to be the solution, as many of their people were already working long hours (page 82).

At the core of this philosophy is something that seems like a cynical move to take advantage of the human need for belonging, meaning and purpose, which is particularly acute within the network.

Every great leader throughout history has demonstrated that it is possible to find many change agents, and from every corner of society — but only if people are given a choice and feel they truly have permission to step forward and act. The desire to work with others for an important and exciting shared purpose, and the realistic possibility of doing so, are key. They always have been. And people who feel they have the privilege of being involved in an important activity have also shown, throughout history, that they will volunteer to do so in addition to their normal activities. You don’t have to hire a new crew at great expense. Existing people provide the energy (pages 23–24).

Now, what was the important and exciting purpose?

We are convinced that we have an opportunity to increase our sales growth significantly in two years, and to become the best sales organization in the industry (page 83).

Boring!

Can I say that the hierarchy is depressingly resolute in their lack of imagination? We value what we measure. Unfortunately, the hierarchy is measuring only those things that benefit the hierarchy.

I’m pretty sure, I’ve heard this narrative before. But let’s see where this goes.

Interestingly, much of the work, they found, was less about finding or generating brand-new good ideas than about knocking down the barriers to making those ideas a reality. It became clear that creative solutions allowing faster movement to capitalize on opportunities had been hidden all over the place — sometimes buried in the hierarchy and invisible to Davidson’s executive committee, sometimes inside heads which had been taught not to speak up, or within people who assumed it was not their place to offer thoughts that went way beyond the scope of their “jobs.” Everyone involved in the growing network became more question driven, but in a constructive sense. What are the best ideas? Why hasn’t this good idea been recognized and executed? What are the barriers? How can we overcome them? What systems or people or cultural assumptions are blocking action? Who will do what by when? How did that turn out? What should we try next? (Page 97).

Not only was the hierarchy the problem by suppressing questions and raising barriers to interaction and discussion, creating an environment that had a very remote chance of innovating new ideas, let alone spreading and implementing them. The hierarchy was actively hostile to the effort, working against the network, even though the network was working at 150% capacity.

…the most powerful person reporting to Davidson hated the whole idea… As a result, he did nothing to help the network side, pulled his people off initiatives to do their “real jobs,” and never gave any of his people credit for providing a 150% effort… (pages 97–98).

It has been said that there is nothing new under the sun. History merely repeats itself.

The Pyramid Scheme

That same day Pharaoh gave this order to the slave drivers and overseers in charge of the people: “You are no longer to supply the people with straw for making bricks; let them go and gather their own straw. But require them to make the same number of bricks as before; don’t reduce the quota. They are lazy; that is why they are crying out, ‘Let us go and sacrifice to our God.’ Make the work harder for the people so that they keep working and pay no attention to lies.”

Then the slave drivers and the overseers went out and said to the people, “This is what Pharaoh says: ‘I will not give you any more straw. Go and get your own straw wherever you can find it, but your work will not be reduced at all.’” So the people scattered all over Egypt to gather stubble to use for straw. The slave drivers kept pressing them, saying, “Complete the work required of you for each day, just as when you had straw.” And Pharaoh’s slave drivers beat the Israelite overseers they had appointed, demanding, “Why haven’t you met your quota of bricks yesterday or today, as before?”

Then the Israelite overseers went and appealed to Pharaoh: “Why have you treated your servants this way? Your servants are given no straw, yet we are told, ‘Make bricks!’ Your servants are being beaten, but the fault is with your own people.”

‭‭Exodus‬ ‭5:6–16‬ ‭NIV‬‬

The Critique

I seem to have offended the hierarchy by suggesting that, while he does offer some good ideas — although they are repackaged old ideas — Kotter’s book is merely the “propaganda” of the hierarchy for its own self-serving interests, that being to remain at the top of the hierarchy. Perhaps the word “propaganda” is a trigger word as much as “racist.” Yet those who have an “authoritarian” bent, tend to be those who are interested in being “the greatest” and “first” in the hierarchy. And, as I mentioned before, we have had a large list of possible hierarchies to choose from throughout human history:

  • families
  • clans
  • tribes
  • cities
  • nations
  • races
  • religions
  • empires
  • monarchies
  • republics
  • corporations
  • military alliances
  • non-governmental organizations

It is these hierarchies that have been responsible for much of the moral, economic, and ecological morass that we find ourselves in. For which of the following was a misguided, self-deluded, self-absorbed hierarchy not responsible?

  • family feuds
  • clan and tribal warfare
  • city fortifications and seiges
  • nationalist protectionism
  • racial segregation
  • crusades, inquisitions, witch hunts, culture wars
  • colonialism
  • civil war
  • corporate greed, competition, hostile take-overs, monopolies, environmental degradation, destabilization and destruction
  • oppression, world wars, genocide
  • bureaucracy, intransigence

If the great vision of the great leader of our time is the great value of being great, first, and supreme, then we have clearly a very poor memory or very little interest in learning from even our most recent history.

Let’s be frank, these are the great delusions of an old, white “Christian” man-child to lead the rise of an authoritarian, white supremacist, fascist regime. That, I would say, is not leadership. That is managing the decline and self-destruction of a once great empire.

A Lack of Imagination

Sadly, the current trend in world politics represents how very little imagination we have for the potential and opportunity that the future offers for those willing to question, think, innovate, create, and transform. That potential and opportunity, the hope for the dual system, lies in the ability of the hierarchy to lower itself to the level of the network, for the greatest to become servant of all.

I heard that there was someone who came to share that novel idea. He came with a revolutionary, transformative idea that the pyramid could be inverted. He said that the greatest were the least. He said that the greatest ethic was hospitality, service, and love for the least. It seems the greatest ideas tend to come from the humble.

Whatever happened to him? Ah, yes, I remember. The hierarchy crucified him. And history merely repeats itself. By voting for greatness instead of hospitality, the hierarchy just crucified him again.

Still, his greatest triumph was to create the network. That central nervous system is just starting to wake up. The technology of the Internet has created the conditions for the birth of something new. I think we are in for a surprise.

Same Idea, Different Focus

Rather than focusing on either the network, as innovative startup, or the hierarchy, as stable corporation, can we not look at the whole?

A human-centred design approach might be more appropriate, as it focuses on an agile process of problem solving through design and iteration based on actual human needs. IDEO offers us this framework for free.

Vision and Purpose

In the end, it’s not about the divisions between the hierarchies and the networks. Leadership is vision. It is the vision to see an important, exciting purpose that is wide enough to include everyone.

His purpose was to create in himself one new humanity out of the two, thus making peace…

‭‭Ephesians‬ ‭2:15‬ ‭NIV

One. New. Humanity.

It’s an old idea. But I think he’s on to something.

Designer, writer, educator, social architect, founder, Builders Collective, Leading with Design. https://stephenbau.com

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