Bear with me for a minute as we go back in time, to 19th century factory work during and after the industrial revolution.
Back then, machines were cranking out widgets in a uniform way, and what needed to be optimised for was the number of widgets being produced per unit of time.
The productivity gurus of the time found out that the best way to do so was to specialise work. i.e. break the work down into constituent parts, give each part to a worker, and get them to do that specific work as quickly as possible in a way that was as repeatable as possible.
This worked great for productivity. Except for one thing. The work was boring, exhausting and the repetitive, mindless nature of the work soul-crushing.
Lots of people finding themselves in factory work had previously been small business owners and artisans minding their own shops and affairs; they went from being self-sustained and governed to being seen as extensions of machinery which had to be ever more fine tuned for more output, all at the behest of factory owners.
Needless to say, workers started complaining.
So the capitalistic class devised another class of workers to keep the shop floor workers in check : managers.
That class came with all manners of measurement, planning, and more importantly, control of workers.
This is the central argument here. The pyramidal structure that resulted from factory work, with its layer of middle management, wasn’t set up to optimise for human potential. It was set up to optimise for productivity as it was defined back then, i.e. production of widgets per unit of time, but more importantly, for the control of workers.
Fast forward to today, and a company org chart looks very much like that factory type work of the industrial era even though modern work has evolved.
We very much still have order givers on the one hand and order takers on the other, separated by a layer (or multiple layers of) managers to make sure that the orders get transmitted and carried out.
This might have been the optimal way of a running a factory (even though that can be strongly disputed : there are current factories running entirely on self-management that are more profitable than their more conventional competitors), but the work landscape of today needs to run on a different operating system than what went before it, simply because we’ve changed paradigms. Knowledge work is different from factory work. Factory workers themselves found their work conditions difficult to put up with; we’ve basically recreated the same conditions and are asking ourselves why work isn’t working out very well.
A hierarchical system relies on few, sometimes only one, key decision maker(s) who’s supposed to be the source of truth at all times. And this in a world where decision making is becoming more multivariate and complex.
Decision-making itself is a vast topic that’s absolutely worth diving into because one might argue that this is the crux of business; isn’t a business the sum total of its decisions? This would be for another post.
Key decisions in hierarchical systems rely less on real time data, gut feel and operational instinct, but rather on filtered information (hearsay, reports, polished presentations) that have gone through layers of politics. You’re making decisions based on information that might not even be sound in the first place.
This creates an information asymetry.
Pyramidal-shaped structures can be efficient for founders and CEOs at pushing information (and orders) down to people by means of relays (management).
But the real challenge is to bubble relevant information up. Pyramidal structures aren’t very good at that because that information is by nature decentralised, diffuse and the signals are weak.
To add to that, you have gatekeepers at all levels sifting information through their own biased filters as that information bubbles up, if it does at all.
In a fast moving market, what you really need are as many sensors on the ground as possible, picking up on important signals ahead of time, as weak as those might be. As effective as a pyramidal structure can be top down, it simply isn’t bottom up.
Also, that information is travelling up and down chains of command often through the same filtered and biased channels, causing signal distortions in a thousand small ways ultimately resulting in decisions that are so disconnected from reality that teams are often dumbfounded by them.
You’re creating a fracture between you and the teams as they cannot get behind those decisions enough to carry them out in a way that’s effective, because they don’t understand them.
This breeds disillusionment and disengagement as previously motivated people turn into automatons, throw in the towel and just wait to be told what to do, all the while eyeing the clock.
This is the slippery slope of turning owners of scope into yes-men and yes-women who are half-assing their jobs.
Disengagement isn’t an overnight thing. It’s a phenomenon that slowly creeps in over time because of the way work is structured.
Salaried work in pre-industrial times was generally considered a halfway point to becoming a self-contained adult : it was to help shape would-be adults and prepare them for one day managing their own affairs. This was before factory work ushered in a world that made lifelong salaried work the norm.
We’re now stuck in perpetual adolescence mode; we’re not adulting, we’re not uncapping our own full capacity for work. There is a glass ceiling for everyone, that of the father figure, aka the boss, looking over our shoulder ready to prance at the slightest misconduct.
Think of it this way : you aren’t surrounded by emancipated people who are constantly pushing the envelope on what they can do. Your teams are full of employees operating at a fraction of their potential waiting to be told what to do and motivated by external carrot and stick incentives.
I should’ve paid more attention to the Business Incentives class in school than I did, because this might have been the single most important class of my business school years.
Incentives drive everything. If you understand them, and can find the proper incentives that align BOTH business well-being AND employee well-being, then you’re off to the races.
You might think that things like promotions and individual sales or performance bonuses might be the perfect alignment between business and employee wellbeing. They’re not, and here’s why.
Competition is inherently bad.
A hierarchical structure, by its very definition, breeds competition. There is ONE person at the top, fewer managers than there are employees, and so, to get to the top, you have to outshine your peers.
This is good isn’t it? You’re essentially creating winners, as the tech bros like to call themselves.
What you’re actually creating is an individual game where the point is to climb a ladder; and the only way for you to climb that ladder is for others not to. This is the very definition of a zero-sum game. For you to win, your peers must lose.
Sure, the climbing of the ladder might be a result of you creating real value for the business, but that has been found to be less true the higher up the ladder you climb. The more seasoned you become, the less company performance tends to be correlated with individual advancement, and the more it really becomes a political game : who you know, who will support your rise, that manager who likes you enough to sponsor you.
So in the end, the one who climbs the corporate ladder might be the best, but the best at what? The best at contributing to overall company performance? Or the best at playing the political game?
Hierarchies inherently pit people, teams and departments against one another as they fight for promotions, ressources and budget. The tools of choice are pretty graphs that only go up to the right, nice reports that are self-serving rather than company-serving, and a whole arsenal of political and manipulative tactics perfected by management and leadership gurus out to sell books.
And for the rest of the employees? They’re either an active participant in this game of corporate ladders and snakes, or they’re the pawns. They’re either actively sucking up to their managers to get that next promotion or that next raise, or that whole environment is just wearing them down little by little, until one day they show up to work and realise they’ve turned into a quiet quitter.
This might be how you win as an individual, if you’re motivated enough to play the game. But if your entire workplace is just a series of incentives pitting people against one another, then your company will ultimately lose.
Hierarchies have done their time. What we’re calling for now is a different operating system, one that better fits current times and challenges.
Do you agree?
