The top-down hierarchical structure of organizations is limited and outdated. Here are four tips for leaders to adjust their strategic planning process to support a networked model.
During my work from home life, kids have been teaching me how to win Battle Royale in Fortnite. For my 10-year old son, it’s all about taking the high ground to snipe at your opponents. My 12-year old daughter, on the other hand, builds networks and alliances. She is already conditioned by societal gender stereotyping to win not through force or the relentless focus on the high ground. She seldom loses, and is perhaps better prepared by that same stereotyping to win in a future world.
In most organizations, there is a basic assumption that the hierarchy of titles represents the hierarchy of information. Bosses know best because they’ve taken the high ground. Most management books, gurus, and models created to date have been based on the same premise of a vertical organization with a hierarchy of power. Recently, management theory has been about creating a more effective pyramid, by turning it upside down and calling it servant leadership. Nevertheless, it’s still a pyramid.
We are entering a period of profound transition. History tells us that this is always so after major global events, such as the COVID pandemic. The concept of having salaried workers and not serfs emerged due to the skills shortage created by the Black Death in Medieval Europe. In contemporary times, the traditional pyramid model and associated power memes, and indeed our entire organizational history of working, are being disrupted as we truly became a digital system overnight. Social media enables sharing of information with an entire network, not just a vertical hierarchy.
In this digital age, where the information is coming from everywhere, the vast majority of it is neglected due to volume. Employees at all levels can access and process the same intelligence with a real time, immediate, and direct perspective. They connect, converse, exchange and collaborate through networks, platforms and virtual workgroups. As Sun Tzu observed in The Art of War, “Three cobblers together are smarter than a genius strategy.” We are living in the age of democratized information.
If you want a glimpse into the power structure of the future, picture a cloud filled with endless individual nodes of lights, each empowered to shine through its connections and influence. In this “Galaxy” model, each node (employee) is a star in the system that needs to be ignited.
The network is the anchor point of future organizational design. The development of strategy has already changed from being something that is inherently top-down, but in some cases, this is not yet realized in the structure of the organization.
Here are four ways in which leaders can adjust their top-down strategic planning process in order to reflect a networked model:
Look for bright stars in unusual places. Let’s start with the periphery of the enterprise. Often undeterred by red tape and politics, driven by a lack of resources and thus the need to improvise, those places are hotbeds for entrepreneurial inclinations and innovative ideas. The most brilliant ideas are generated from unexpected places, seldom from the top.
Add diversity to the decision-making. The City Council of Barcelona used a collaborative approach and crowdsourced a sharing economy policy framework with a range of stakeholders, including municipal officials, residents and sectors. A city with a long-held tradition of democracy, invited all citizens to have their voices heard in policy formation. What can business leaders learn from this? It’s not difficult, just different.
Create the right environment. Increasingly, the manager that needs help does not go to their boss but instead asks a network. Please pause and think about that. What does that do to the ego of the average manager? Imagine the right conditions for different perspectives to be incorporated into strategy as it is being developed. It is important to practice the thing that you want to become. Only then are we able to fully use the collective shared wisdom to understand the emerging patterns.
Include everyone in the creation of strategy. If only a handful of key executives share a conviction about the way forward, implementation is often more difficult than it needs to be. Why should anyone now trust and accept the strategy if it came from the top? That is no longer how we do our best work. As an example, my 14-year old researches the evidence of any parental suggestions that he may not agree with. Yes, this is teenage rebellion, but it is data-driven and evidence-based. These are the kinds of challenges that many parents, managers and executives will encounter because the world will not operate in the same way as the one they grew up in. New rules, skills and habits will be needed in order to lead effectively.
When several hundred employees share the task of synthesizing a set of unconventional strategic options conclusions become almost inevitable. The participants start new insights and convictions virally. The leader’s task is less about ‘selling’ or ‘creating’ the strategy than ensuring collaborative execution that fully utilizes the shared passion that involvement has created and making sure that all the stars shine bright in their galaxy.
Chris Yates is currently General Manager of Learning & Development at Microsoft and is the co-author of Share: How Organizations Can Thrive in an Age of Networked Knowledge, Power and Relationships (CLICK HERE to get your copy). Previously he was the Chief Learning Officer and Head of People and Organizational Development for Caterpillar Inc. and has served in senior roles at HSBC and American Express.
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