Temporary, Negotiated Hierarchies

By Harold Jarche orginally published in Harold Jarche

Hierarchies in Perpetual Beta

A Post-Job Economy

The job was the way we redistributed wealth, making capitalists pay for the means of production and in return creating a middle class that could pay for mass produced goods. That period is almost over, as witnessed by 54 million self-employed Americans. The job is a social construct that has outlived its usefulness. Freelancing may be a replacement but often lacks a safety net, and many of the self-employed become pawns of the platform monopolists. We are entering a post-job economy. Our careers will be shorter as our lives get longer. Companies and institutions are no longer the stable source of employment they once were, as even the Fortune 500 companies now have an average lifespan of 20 years, as opposed to 60 years in 1960.

Consider that almost all of our institutions and many of our laws are based on the notion of the job as the normal mode of working life. Schools prepare us for jobs. Politicians campaign on job creation. Labour laws are based on the employer-employee relationship. What happens when having a job is not the norm? In the USA today, half of all jobs are at a high risk of automation. These will soon disappear and are not being replaced at the same rate.

The decrease in salaried employment is a key factor that will change the nature of work teams. As long as people have jobs, we will have hierarchical teams. The job is premised on the assumption that people can fit into existing teams like cogs in a machine and that team members can be easily replaced.

We already have other ways of organizing work. Orchestras are not teams, and neither are jazz ensembles. There may be teamwork on a theatre production but the cast is not a team. It is more like a social network. Hierarchical teams are what we get when we use the blunt stick of economic consequences as the prime motivator. In a creative economy, the unity of hierarchical teams can be counter-productive, as it shuts off opportunities for serendipity and innovation. In complex, networked economies, workers need more autonomy.

Autonomy at Work

In the triple operating system (Awareness > Alternatives > Action) work gets done by self-governing work teams with a degree of autonomy operating in temporary, negotiated hierarchies. Self-organizing teams are more flexible than hierarchical ones, but they require active and engaged members. One cannot cede power to the boss, because everyone is responsible for the boss they choose. Like democracy, self-organized teams require constant effort to work. Hierarchies work well when information flows mostly in one direction: down. They are good for command and control. Hierarchies can get things done efficiently. But hierarchies are useless to create, innovate, or change. Hierarchies in perpetual beta are optimal for creativity and to deal with complexity.

What is autonomy in the workplace? Employees are given different degrees of autonomy in terms of the decisions they are allowed to make within the confines of organizational power. Discretion for action is usually accorded by virtue of one’s place in the hierarchy. Usually the higher one goes, the more autonomy one has.

One way to look at autonomy is the type of action people are allowed to take without permission. There are five levels of increasing autonomy in the workplace.

1. Where you work
2. + How you get things done
3. + What you work on
4. + Who you will work with
5. + Why you do the work in the first place

Each one builds on the other, so that people should be able to decide for themselves where to work before they can be autonomous in how they work. The constraints of space and place must be released in order to find the best ways to get work done, such as the selection of the appropriate tools. Once people can decide where and how they work, they can make informed decisions on what they will work on, as nurses at Buurtzorg do. Given this autonomy, workers can then decide who they work with, as employees at Semco do. Finally, when business strategy is informed by the emergent activities of all employees with their customers and environment, the why of work truly reflects the organization and is not imposed on the people doing the work. This is full autonomy which is necessary for the network era, because you cannot manage a network.

Principles of Network Management

As networks become the dominant organizational form, the way we think about management has to change, as well as the way those in positions of authority try to influence others. In a network society, we influence through reputation, based on our previous actions. This is why working out loud and learning out loud are so important. Others need to see what we are contributing to the network. Those who contribute to their networks will be seen as valuable and hence will have a better reputation and may be able to influence others. Management in networks is fuzzy.

Here is how I define networked management:

It is only through innovative and contextual methods, the self-selection of the most appropriate tools and work conditions, and willing cooperation that more creative work can be fostered. The duty of being transparent in our work and sharing our knowledge rests with all workers, especially management.

1. innovative & contextual methods = in the network era work and jobs cannot be standardized, which means first getting rid of job descriptions and individual performance appraisals and shifting to simpler ways to organize for complexity.

2. self-selection of tools = moving away from standardized enterprise tools toward an open platform in which workers, many of which are part-time or contracted, can use their own tools in order to be knowledge artisans.

3. willing cooperation = lessening the emphasis on teamwork and collaboration and encouraging wider cooperation.

4. duty of being transparent = shifting from ‘need to know’ to ‘need to share’ especially for those with leadership responsibilities, who must understand that in the network era, management is a role, not a career. Transparency is probably the biggest challenge for organizations today, and it can start with salary transparency.

5. sharing our knowledge = changing the environment so that sharing one’s knowledge does not put that person in a weaker organizational position. An effective knowledge worker is an engaged individual with the freedom to act. Rewarding the organization (network) is better than rewarding the individual, but only if people feel empowered and can be actively engaged in decision-making. Intrinsic, not extrinsic, motivation is necessary for complex and creative work.

A Framework for Network Management

In the network era, organizations need to build their own unique model, based on some general principles, within their specific complex context, which only they can understand. There are no cookie cutters to organize for complexity.

Improve insights — Traditional management often focuses on reducing errors, but it is insight that drives innovation. Managers must loosen the filters through which information and knowledge pass in the organization and increase the organizational willpower to act on these insights. Encouraging small experiments to probe the complexity requires an attitude of perpetual beta.

Provide Learning Experiences — As Charles Jennings notes, managers are vital for workers’ performance improvement, but only if they provide opportunities for experiential learning with constructive feedback, new projects, and new skills.

Focus on the Why of Work — Current compensation systems ignore the data on human motivation. Extrinsic rewards only work for simple physical tasks and increased monetary rewards can actually be detrimental to performance, especially with creative work. The keys to motivation at work are for each person to have a sense of Autonomy, Competence, and Relatedness, based on self-determination theory.   Relatedness “is the universal want to interact, be connected to, and experience caring for others”. This is what it means to be a social enterprise, and why social learning is so important to help knowledge flow.

Help the Network Make Better Decisions — Managers should see themselves as servant leaders. Managers must actively listen, continuously question the changing work context, help to see patterns and make sense of them, and then suggest new practices and build consensus with networked workers.

Be Knowledge Managers — Managers need to practice and encourage personal knowledge mastery (PKM) throughout the network.

Be an Example — Social networks shine a spotlight on dysfunctional managers. Cooperative behaviours require an example and that example must come from those in management positions. While there may be a role for good managers in networks, there likely will not be much of a future for bosses.

Distribute Authority — Coupled with a willingness to experiment, distributed authority is needed to ensure the organization stays connected to its outside environment. People at the outer edges of the organization often can see the environment more clearly than those at the centre.

The future of work is in temporary, negotiated hierarchies connected through human and digital networks.

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