The large, vertically integrated, hierarchical organization is one that has persisted throughout the latter half of the twentieth century. In these organizations, employees generally get paid to do what they are expected to do. They don’t get paid to innovate or to find new ways of doing things. Where individual idea recognition and information gathering is not valued, top-down corporations give members an incentive to hide information and dissemble in order to keep the bar for performance low. With the decreased importance placed on information flow from a number of diverse sources within the organization, the information brokers closer to the top of the organizational structure become the sole decision makers. (...)
So why have many traditional business organizations been slow to embrace collaborative decision making instead of relying on command-control systems? Hierarchical systems find their roots in modernist models of creating systems of certainty and security through highly delineated boundaries of function, structure, order and logic. By tightly controlling workers’ duties and influence, leaders emerged as the perceived knowledge holders. Perceived knowledge was the source of actual power. Quite simply, many leaders are reluctant to let go of their monopoly on power and/or mistakenly believe that relinquishing information control will harm the corporation.
However, the same social context that created knowledge silos within upper level management is rapidly transforming with advances in technology. Information is more accessible to more people than ever before through the internet and social media. For a leader to believe that he solely has the information and knowledge to act within the best interests of the company is flawed.
Above text was published on the Forbes blog on the same day as The Wall Street Journal Europe published a good article last week on the use of social media by business. Part of the article was based on research that I have been conducting over the past months at Executive Learning Partnership. The main point of the article is that even though businesses are starting to experience benefits from using social media/enterprise2.0 tools and technologies, they have yet to grasp that there are big implications and challenges in terms of "2.0" mindset and working practices that are rippling across the workplace that is often still organized in a "1.0" manner - even though this is a mismatch with today's complex world:
Social media has revolutionized people's private lives, but until now few have truly embraced the benefits it can bring to business. A new poll from Netherlands based consultancy, Executive Learning Partnership, has found that while regular users strongly believe that social media has improved their relationships with customers, far fewer of those polled actually use it for business purposes.
Many organizations feel that they are not yet ready to make this leap. They want to carefully consider the organizational impact as well as the benefits of the technology.
"The consequence of adopting these tools is that people will start working in new ways," says Berend Jan Hilberts, associate partner at ELP. "Companies need to prepare for that rather than be surprised by it. For one thing, it alters expectations about how companies share information. Some companies guard and cascade information; social media works best when information is shared virally. When the culture doesn't match the tools it can create friction."
There are, of course, some industries and some parts of companies that are not well suited to this way of working. ELP advises companies to take a step-by-step approach to adopting these tools. "As well as the technological challenges, organizations need to address their organizational structure, leadership style and cultural values," says Mr. Hilberts. "There is no point adopting 2.0 technology if your business still has 1.0 working practices."
Three-quarters of respondents claimed that they had encountered some barriers to further adoption but – on the whole – these were not technology related.
Rather, most had said that it was a company's culture, leadership or structure that was holding their organization back from adopting social media in a business context. And thus missing out on the benefits experienced by those who have started to deploy it.
Rien van Lent, the chief executive of ELP, says the biggest challenge most companies face is the deepening complexity of their operating environment. "The homogenous target audiences that companies were dealing with – or thought they were dealing with – have disappeared," he says. "There is far more fragmentation and companies are operating in multi-contextual environments."
Mr. van Lent believes that the old rules of cause and effect within a business arena are breaking down. Companies are finding that they can't manage this with the old tools. Social media provides some new tools and – more importantly – allows a switch in mindset from the old command-and-control hierarchies to one where multiple stakeholders can collaborate, co-create and co-command. The ELP survey found a significant correlation between the use of social media and more collaborative working practices.
It sounds so logical: people who like social media are used to sharing, collaborating, trusting, being transparent with information. This must mean that their mindsets, values and behaviors would be skewed towards this type of behavior in the workplace. That is what we hypothesized, and that is what we actually found in our survey.
We compiled a list of 10 attributes around leadership behaviors and cultural values, and had our respondents indicate whether they liked a "1.0" or more "command-and-control" version of that attribute or the "2.0" or "connect-and-collaborate" version. The attributes were grouped in 5 clusters around:
- information and knowledge management
We also had them indicate how serious they were into social media (no use, light, medium or heavy user). Then we cross tabulated. And or hypothesis was actually confirmed! For example, on one of the attributes in the Communication cluster: "broadcasting vs. dialogue" (as the most effective way of communicating a message across the organization) of the respondents not using social media at all, 61% showed a preference for the "old-fashioned" broadcast style, whereas heavy users of social media preferred by 78% the dialogue style.
Likewise, in the Information and Knowlegde Management category, on the "undisclosed vs. transparent" attribute we had non-social media users prefer undisclosed by 63%, whereas the heavy users overwhelmingly prefered transparency by a whopping 78%. This number was nicely illustrated in a recent post on the The Economist's Ideas Economy blog by Cristobal Conde and also points to one of the most important benefits: companies get smarter by involving a larger part of their workforce in decision making.
How flattening your company multiplies intelligenceThere was a time when business leaders were the only ones who had access to all the information, and they alone were expected to make better decisions than the thousands of people who made up their organisation and reported in to them.Now, an important culture shift has taken place as information technology revolutionized the way people communicate, gain knowledge and work. In turn, it’s created a new ‘idea ecosystem’ that has unlocked a massive reserve of human potential and, just as important, growth, for corporations.But what does that all mean?Access to information is significant, but a free flow of information becomes an incredible asset. The organisational hierarchy is flattened, allowing ideas to percolate and people to thrive. A collaborative environment shifts an organization toward meritocracy, as opposed to a command-and-control structure. In essence, it is a multiplier effect for intelligence.Yet creating a collaborative culture is also a challenge that requires the right mindset and tools to flourish. Why should people collaborate? How do leaders establish a collaborative spirit in dispersed, competitive environments? In truth, the how is much simpler: by using tools that enable rapid communication, like email, Yammer, Twitter and other social media platforms that allow people to talk to each other quickly and trade ideas that they can develop into decisions.
The key point in all this should not be lost though: companies that want to amplify their 'corporate brain' are smart enough to wire-up and amplify their brain capacity by connecting and empowering more people across their workforce, regardless of their function, department or rank in the corporate hierarchy.
Would love to hear your perspectives!