In this post on enterprise applications and social media, Hugh MacLeod brings up the issue of hierarchies:
Big businesses will always have trouble with anything that subverts hierarchies, for hierarchy is the glue that holds large organizations together. Small businesses have an easier time with blogs and whatnot, for there are fewer layers to keep happy. Secondly, small companies are for the most part private companies. Large companies generally have public shareholders. Different rules apply.
But big businesses have always needed their hierarchies subverted or at the very least complemented with additional relationships to get certain kinds of work done. Hierarchies make control feasible, and consequently allow for efficient and effective work in situations that are similar to situations that the enterprise has confronted in the past. But in times of uncertainty and change, big businesses need their employees to use ad hoc relationships across formal organizational lines and even outside of the organization’s boundaries.
In his book Six Degrees: The Science of a Connected Age, network theorist Duncan J. Watts suggests that enterprises facing ambiguity and uncertainty need to have tools that promote bypass communications links that get around hierarchical bottlenecks:
a good strategy for building organizations that are capable of solving complex problems is to train individuals to react to ambiguity by searching through their social networks, rather than forcing them to build and contribute to centrally designed problem-solving tools and databases.
On this view, Enterprise 2.0 applications should provide for the following:
- Support the formation and deepening of ad hoc links across the organizational hierarchy. This might be achieved through a Facebook-like social networking platform that allows people to connect with each other according to identities other than their workgroup affiliations, for example allowing basketball lovers or knitters or Princess Bride fans to find each other and interact on a social level. The social relationships then can be leveraged when business problems arise where information or ideas or innovation might not reside within the particular workgroup where the problem originated.
- Allow for social problem-solving across these informal, ad hoc relationships, perhaps supported by decentralized knowledge sharing and aggregation applications including wikis, blogs, and informal broadcast communications similar to Twitter.
When I was at Oracle (which experience gave me both firsthand knowledge of how big companies work and an understanding of the difficulties of enterprise application development), I saw that the most effective employees were not those who only worked using the formal organizational hierarchy but were those who both respected the hierarchy and were able to tap into a rich set of informal relationships that crossed hierarchical lines.
The hierarchy doesn’t need to be entirely subverted, but needs to be complemented with social problem-solving across informal networks. This is where Enterprise 2.0 comes in.
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The hierarchical nature of corporations (and their average size) are both results of the inherent efficiency of transactions relative to other costs (see Coase’s ‘Nature of the Firm’).
As productivity increases, larger and larger organizations are possible because the marginal inefficiency of an added employee is lower.
However, the corporation is still essentially feudal, and so we see the same kinds of forces at work that swept away monarchies and replaced them with nation-states (many of them essentially dictatorships).
The rise of franchises for example can be traced to radically lowered transportation and broadcast communication costs compared to bottom-up and lateral communication (for coordination). Now the pendulum is swinging the other way.
But it remains to be seen whether we’ll eventually get any democratically elected CEOs.
When I worked at IBM Global Services (IGS) (prior to the purchase of PWC Consulting), we consultants were expected to network with others via internal IM, e-mail and communities of practice. Global Services’ motivation was primarily to keep us billable because we’re an expensive lot if we don’t pay for our keep.
The big problem with this networking approach is that if you are new to the organization, you’re an unknown; people don’t know you and you don’t know them. Few want to take a chance with an unknown on an account worth millions of dollars. You have to market yourself across not only the consulting organization but also the sales organization. It’s a daunting task to say the least and it takes time, which is one thing most companies are loathe to provide.
How does technology address this? The simple answer is it doesn’t. It can enable and facilitate communication and network interaction - if implemented and rolled out properly - but it doesn’t make it happen.
A company must create and establish a culture - and everything that necessarily includes and implies - that supports nodes, meaning people AND their knowledge, assimilating into networks. IGS tried to accomplish this in a couple of ways. First, it implemented (very poorly) a mentor program. Unfortunately, like so many companies, it was so much lip service because mentors in the consulting profession had the same pressure - actually more - to generate revenue PLUS there was no reward, and thus no incentive, for mentoring. That was Big Company Mistake #1.
Big Company Mistake #2: IGS used collaborative tools like Lotus Notes and mainframe databases for knowledge management and e-mails and IM for communication. There’s nothing to wrong with e-mail and IM but updating central knowledge repositories placed a huge burden on consultants (those on engagements) who were already working 50+ hour weeks.
Big Company Mistake #3: Although Global Services was supposed to be collaborative, in truth is was extremely competitive and discouraged collaboration. If a consultant asked for feedback on a presentation or approach from a manager, it was viewed as a sign of insecurity and/or incompetence. Additionally, consultants would modify their team’s presentations if it meant putting them in good graces with principals (without a principal’s support, a consultant doesn’t work), despite possibly diluting or changing the team’s message to the client.
This may have been a bit rambling, but I do have a point - that if a company’s culture does not truly support networking and collaboration, no amount or type of technology thrown at the issue will make a positive difference.
How did I miss this one? A lot of big corporations are being faced with an immediate choice of supporting this kind of constructive subversion via the explosion of use of Facebook in two different ways. Firstly, there’s the sudden growth of Facebook within existing employees - the choice there is to tolerate it and count the benefits (more connected social networks, greater sense of commonality and so on) or to focus on the downside (timesink, waste of resourses, non-officially sanctioned communications) and choke it off.
Interesting to note that the big consultancies and media organisations like the BBC have gone for the former (the PWCs of this world would of course claim that such a choice is part of their corporate culture anyway).
The second way informal social networks are being forced upon them via social media is simply down to graduate recruitment - the intake of this year will be a little tougher to socialise if their accustomed means are abruptly disconnected (look at number of Deloitte or PWC intern Facebook groups for example).
More formally, I can’t help but chuck in the issue of gender and how this fits in and around all this…
>> the most effective employees were not those who only worked using the formal organizational hierarchy but were those who both respected the hierarchy and were able to tap into a rich set of informal relationships
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