Showdown: The Hierarchy vs the Network

Hierarchy vs Network

History is strewn with examples of technologies and processes that have become obsolete as a consequence of progress. A few that come to mind are fax machines, the yellow pages directory (delivered whether you wanted it or not!) and of course, the good old family photo album, all of which are now thankfully hard to come across. In this post I’d like to boldly suggest that the corporate hierarchy, yes, that multi-layered pyramid-like chart has some serious competition heading its way – the network.

Last week while I negotiated my way through rush hour traffic I was lucky enough to catch an interview with Steven Johnson author of Future Perfect: The Case for Progress in a Networked Age  where he makes the case for a new worldview on the current political model. Johnson uses the Internet as a metaphor to describe emerging forms of institutional and behavioral organizations and highlights the enormous power of peer networks to adapt and thrive in our interconnected world.

This has been happening successfully in the business world for quite some time in the form of decentralized, crowdsourcing and crowdfunding companies like Kickstarter, Wikipedia and Airbnb to mention a few. Recently these companies were mere start-ups yet in dramatic fashion, have today eclipsed established companies that still operate with a centralized top-down organizational structures. One jaw dropping statistic claims that this year Airbnb will surpass Hilton Hotels in the number of rented rooms. It took Hilton 92 years to get to where it is, while Airbnb has been in business only 4 years.

But my question is different. Can we take this model of decentralized organization and apply it to coworking relationships? Can people take ownership of projects, work towards objectives and coordinate themselves without a clearly defined leader?

New research coming from Carnegie-Mellon University strongly supports this argument. In the study subjects were tested for general intelligence and personality-related characteristics and then randomly assigned to small groups. Each group realized a series of tasks that included puzzle-solving, brainstorming, and making collective moral judgments. Based on these results, the researchers were able to identify a consistent level of “collective intelligence” for each group. Groups that performed well on putting together a puzzle also performed well on other more complex tasks.

What surprised the researchers was that a group’s successful performance was not directly related to the average intelligence of its members, but rather to the way its members interacted with each other and, in particular, to the even distribution of individual contributions to the group dynamic. According to Anita Woolley, assistant professor at Carnegie Mellon’s Temper School of Business, what determined the success of the group was the consideration of multiple perspectives and the even distribution of the conversation. Essentially greater collective intelligence was found where there was better and more equal participation among all of the group members.

Now before any of you molotov-throwing anarchists start chanting victory, I suggest we calm down and consider a counter argument coming from mother nature herself, namely that all systems have a directive force. The closest example to us is the human body where the different regulatory systems work as if without conscious intervention, however the brain still dictates the cognitive functions of space and time.

So if you ask me, hierarchy or network? I’d bet on a boring and conservative stalemate since the value of peer networks in the workplace is not in replacing the existing hierarchy, but rather complementing and augmenting them. We should promote these networking mechanisms through frequent roundtable discussions and employee workshops as a way to fulfill needs and solve problems – and even more so when rigid and slow-moving hierarchies simply cannot cope with the demands of our world. By this management can promote greater equality, participation and motivation without losing direction towards set goals.