GUEST POST from Greg Satell

About a decade ago, the management guru Gary Hamel wrote a highly cited article in Harvard Business Review entitled ‘First, Let’s Fire All the Managers’. He analyzed the success of Morningstar, a leading manufacturer of tomato products that operates with a flat management structure and called for other corporations to follow its lead.

“A hierarchy of managers exacts a hefty tax on any organization,” he wrote. “This levy comes in several forms. First, managers add overhead and, as an organization grows, the costs of management rise in both absolute and relative terms.” The article created a lot of buzz and helped bolster other flat models, such as Holacracy.

Yet the “flat organization” idea hasn’t caught on. “Since 1983, the size of the bureaucratic class — the number of managers and administrators in the US workforce — has more than doubled, while employment in other categories has grown by only 40%,” Hamil recently wrote. The truth is that we need managers and trying to eliminate them is a waste of time.

Planning A Spontaneous Revolution

In the early 2000s, a series of color revolutions spread across Eastern Europe sweeping away the authoritarian remnants of post-communist governments in Serbia, the Georgian Republic and Ukraine. These would prove to other revolutionary waves such as the Arab Spring. Old-style hierarchies suddenly seemed out of date.

I experienced some of these events first-hand. I was living in Ukraine during the Orange Revolution and managing the leading news organization in the country. I also spent some time in the Georgian Republic and got to see many of the reforms take place. When Hamel’s article came out, I had already begun the research that would lead to my book Cascades and I found his ideas about flat organizations not only persuasive, but inspiring.

I shouldn’t have. Even at the time, it had become clear that the revolutions weren’t as successful and many of us had hoped. In Ukraine, Viktor Yanukovych had already come to power and it would take another revolution to dislodge him. In other countries, such as Egypt, new authoritarians would soon take the place of those who had been overthrown.

Yet even more importantly, I would later get to know one of the chief architects of the color revolutions, my friend Srdja Popović, and would learn that the revolutions weren’t leaderless at all. In fact, much of what I had experienced as spontaneous and organic was actually very much planned, engineered and organized.

As I continued to research supposedly “leaderless” organizations this would be a recurring theme. Either their success was either not genuine or ephemeral, or that there was a less obvious, informal hierarchy at work.

The Truth About The Orpheus Orchestra

One of the most cited examples of successful leaderless organizations is the Orpheus Chamber Orchestra in New York, which has been operating without a conductor since 1972. They not only regularly play at top venues like Carnegie Hall and Lincoln Center, but have won multiple Grammy awards.

An orchestra concert is a highly coordinated event, with many different musicians needing to coordinate their efforts to play music according to a specific vision. If everyone applies their own interpretation, what should be a symphony would end up as a cacophony. So how does Orpheus manage to not only survive, but thrive?

The truth is that Orpheus is not really a purely leaderless organization. It would be more accurate to say that the members trade off leadership, with one member leading one particular collection and then a different member leading another. So while it is true that the Orchestra as a whole is leaderless, each concert is leaderful.

That’s quite a big difference. If you would believe that an entire orchestra could conduct itself, you might go and try to run your organization with no direction at all, which would be a disaster. However, if you would follow the direction of the Orpheus Chamber Orchestra, you would appoint a particular team member to run each project, which would be so utterly conventional that it wouldn’t even seem worth mentioning.

The Open Source Pecking Order

Another favorite that advocates of “leaderless” organizations like to point to are open-source software communities. Yet once again, when you take a closer look, these communities are not some free-for-all, with everybody chiming in and making changes at will. In fact, in successful communities take governance very seriously.

Some projects, like Android and WordPress, are tightly controlled by the companies that originated them, Google and Automattic, respectively. They manage the community fairly tightly, accepting patches, revisions and improvements as they see fit and providing a vision for where they think the technology should go.

Open source foundations, like Linux and Apache provide more intricate governance structures. They don’t have much in the way of formal leadership, but in practice each project has informal leaders who drive the direction of the technology. In fact, competition for clout within those communities can be very stiff.

There’s a reason why some of the world’s most valuable companies pay people well to contribute to open-source software communities and it’s not altruism. They want to shape how crucial technologies will develop to benefit their business. To do that, talented people need to spend time building the trust and reputation that will enable them to lead.

Let’s Not Fire All The Managers

For a while now, management gurus such as Gary Hamel have been advocating for flatter organizations, yet there is little evidence that eliminating leaders is a viable model. In fact, when Wharton Professor Ronnie Lee took a close look at game software developers, he actually found that the number of levels of bureaucracy increased significantly, not decreased, over the last 50 years.

There are several reasons that this is true. The first is that, while having a flatter structure leads to more innovation and creativity, you need good leadership and governance to execute well. As an industry matures and becomes more complex, more levels of hierarchy are needed to manage it effectively.

Another important factor to consider is that even without a formal hierarchy, leaders will tend to emerge. Which is why when you take a closer look at often cited examples of “leaderless organizations,” there is much more hierarchy that it would at first seem. Just because there isn’t an organization chart doesn’t mean there isn’t a pecking order.

We need to stop thinking in terms of how many levels of bureaucracy there are and start working to network our organizations. We don’t need to eliminate managers — or anyone else for that matter — but to widen and deepen connections within and without our enterprise. We need to lead and to do it more effectively.

The role of leadership in organizations has changed. It is no longer merely to plan and direct work, but to inspire meaning and empower belief. As I wrote in Cascades, the key to transformational change is small groups, loosely connected by united by a shared purpose. The job of leaders today is to help those groups connect and forge a common purpose.

— Article courtesy of the Digital Tonto blog
— Image credit: Pexels

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