When I started work in the mid 1990s enlightened companies had moved from hierarchical command and control structures to a more empowered model for the enterprise, and more and more companies were headed in that direction. Then, in 2003 Lou Gerstner, former CEO of the famously hierarchical IBM, published Who says elephant’s can’t dance?, the story of how he revitalised the company by delegating power to employees, and we all knew the revolution was complete.
But now the wheel has turned again.
The hierarchical model broke down under two forces:
- The pace of change increased and nimble companies that didn’t have to go back to the centre for instructions started winning
- Something about late stage capitalism meant more and more employees wanted autonomy rather than to follow orders – particularly the more capable ones
These trends have continued apace and we’re reaching the point where the empowered enterprise model of setting a vision, building consensus, and managing by objectives is breaking down. The pace of change is such that even 1-2 year articulations of the company vision needs to change frequently and best people now want to be co-creators at every level of the company. We are now moving from the empowering employees to putting them in control.
Wolff Oins just published a report into management attitudes which captures this shift brilliantly:
- The Premise of the organisation shifts from Motivation and delegation to focus and liberation
- The underlying belief shifts from workers are willing and best motivated by a vision and rewarded with a career to workers are individualists who want to be their own leaders
- The management style shifts from painting vision, building consensus and managing by objectives to suggesting purpose, designing culture and encouraging experimentation
- The company shape shifts from network to ecosystem
- The company spirit shifts from rational brain to organism
For me the notion of ‘company’ as ‘organism’ captures the modern firm brilliantly. Organisms can be directed, but they have a life of their own and are comprised of an ecosystem of cells, each of which has its own agenda. Organisms can do marvellous things, but they are messy and hard to control. That’s a much more accurate view of today’s companies, and especially today’s startups, than an orderly rational brain or a network.