a #fluid-organization is powered by networks; #hierarchy = ice; #socbiz #e20 #enterprise20

Today I was inspired by a good friend of mine who works as communication coach and trainer. We were elaborating on the inability of large and decentralized organizations to really resonate on reality and detail when it comes business planning and steering. The larger a company gets and the ‘higher up’ a manager sits within a hierarchy the more likely it gets that Excel (or a similar tool) turns into his/her touchpoint to reality. Abstraction is considered necessary for managerial decisions that aren’t influenced by subjectivity or prolonged by dealing with too much detail. But from expereince we all know that numbers look different if someone’s – unfiltered – perspective is added to it as a commentary.

A couple of years ago I was bold enough to announce at a conference ‘Hierarchy is dead – long live the networked organization’. Oh well, this statement might have been slightly over the top and I have altered it since then to ‘Hierarchy can no longer be the dominating dimension of steering a company – value has to be created by networks of experts and expertise’. Then a week ago I have attended a conference where a picture similar to this one was put on screen:

20120422-151442.jpg

I have modifed the picture to the extend that I have decided to include the nodes of the formal part of the organization into the network on the right side. Thereby I want to express two things in particular:

1 – Formality determines an individual’s location – network nodes determine an individual’s value
Some people feel comfortable in the role of a ‘free radical’ – buzzing through an organization without really caring of hierarchical position or title. The majority (I dare to say 95%) of employees however, require some certainty of where they stand and which part of the engine they represent. This certainty is required to make sure that role and responsibility are clear and expectations can be set/measured accordingly. As long as companies haven’t decided on measuring collaborative and joint performance/success as the key indicators this particular circumstance will not change.

What a formal role doesn’t incorporate is the potential value of an individual for an entire organization. Making a certain expertise or experience only accessible to a limited part of a company could even be considered ‘negligent’. Now the connections come into play… The more connections one individual has the more effective can that individual’s value be for the greater good. A connection must not necessarily stand for a people-relationship. It could even represent the virtual affiliation with a group, a subject or a project challenge. Enabling companies and employees to access this potential from both sides – creating and utilizing the connections – can unleash the hidden value that lies within information and knowledge work.

Just as a side note: I am 100% aware that taking up this discussion with union councils is far from easy…

2 – The fluid organization
Water is able to adjust to all situations and to unleash power that can overcome almost anything that is put in its way. When water turns into ice two interesting things happen: it loses all of its agility and ability to adjust and it increases in volume.

For me hierarchy stands for the aggregate state of ‘ice’. The more established (frozen) it is the more agility gets lost for an organization to adjust to challenges or changes in the environment. Gerhard Wohland, Matthias Wiemeyer elaborate in their book ‘Denkwerkzeuge der Höchstleister: Wie dynamikrobuste Unternehmen Marktdruck erzeugen.‘ on how high performing companies are able to withstand competition but can turn into victims of significantly changing environments (an awesome read by the way). Furthermore – and I can see all readers nodding – hierarchies tend to be ‘bigger’ than the sum of all individuals…

Keeping it fluid however, doesn’t mean that an individual doesn’t have a fixed location anymore. Each water molecule consists of the required atoms. Their location – as far as it’s possible in modern physics – can be determined. Still molecules and larger groups of molecules still are agile enough to form according to situational requirements.

Referring to the illustration above: left is ice, right is water – the fluid organization, in which atoms and molecules have their position but are connected and agile enough for form powerful instances according to potential and challenge.

Organizational and leadership challenge of enterprise 2.0
Combining the fluid organization with the actual state of hierarchies that resonate on decentralization and globalization will be one of the major challenges for consultancies dealing with organizational management and social (networked) business.

This should be taken into account when initiatives are put into place to establish the new way of working. As long as a company is not open enough to ‘blend’ (literally throwing it in a blender…) their established structures the potential success will be limited. Networking stands for overcoming personal limitations and organizational barriers – professional as well as geographical. But it has to start with a solid connection to business operations and individual people’s goals.

2 thoughts on “a #fluid-organization is powered by networks; #hierarchy = ice; #socbiz #e20 #enterprise20

  1. I really liked this post. I’ve been looking for information on a more networked organizational structure. Your post leaves me with a question though…how would a person keep track of the constantly shifting network organizational structure? In a company like mine, it would need to be updated weekly since most projects run less than a month in most cases.

    1. Thanks for your comment. I think the major challenge in that context is that (depending of the extend that the network overrules the formal structure) we are shifting paradigms. Over decades we have been trained to think in boxes (literally). In the future it will be less important who you know but rather how quickly you are able to get access and a connection to the right people. I am not saying that personal relationships are becoming of less meaning. Looking at humans being pretty social beings that wouldn’t make sense anyway. I am saying that the network/fluid layer will be an important complement to the personal layer.

      In particular organizations that reorganize themselves depending on customer project work the concept of ‘fluid’ could be fundamentally beneficial. Customers requires quick and effective solutions. To respond to that it becomes even more essential to gather the right people at the right time…especially in situations where agility is needed. Old ways of forming and leading teams are less able to adapt to that requirement – not to mention the factors of decentralization, networking and globalization.

      Does this shed a bit more light into your question?

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