Hierarchies, because of their structure, always disproportionately reward those at the top levels of the hierarchy and disproportionately take from those at the bottom levels. It turns out that this does not result in producing good incentives for either those at the top (who will get rewarded because of their position alone) or those at the bottom (who will loose regardless of their effort).
My hypothesis is that those organization that can operate as communities will not only be more productive, achieving higher revenue with lower costs, but that they will also produce more of what Umair Haque calls thick value - that which accounts for externalities like pollution, employee burnout, etc.
- Slow moving, rigid organizations do not adapt to increasingly fast moving markets.
- Siloed information within organizations creates huge redundancy issues and makes efficiency difficult.
- It is quite challenging to hire individuals that can operate in large inefficient organizations and drive innovation or think differently and therefore organizations lack the 'best and the brightest' talent.
- Certain kinds of talent, particularly in the area of collaboration, are poorly identified and rewarded.
- The pace of technological advancement is exponential yet human evolution is glacial. Technology, information, and infrastructure are no longer the limiting factor to innovation, people are.
- Middle management is incented to protect their turf and hoard information leading to archaic corporate politics and huge inefficiency for the organization.
- Upper management is getting a disproportionate and often outsized percentage of the profits.
- The hiring and layoff cycles have created immense distrust of employers.
- Employees are increasingly stressed due to unease about their job stability, the deluge of information, and increasing responsibility to fund their own health insurance and retirement.
- Families with two working parents are strained for time. Families with one working parent are increasingly uneasy about the risk of one paycheck. Single adults are increasingly stressed because they are viewed as the employees most ready to work long hours.
- More and more individuals want to be in control of their own work life since the perceived risk of working for a large organization is not significantly lower (and may be greater) than the risk working for themselves.
Everyone is looking for faster and faster execution but faster is not sustainable for people. The only long term competitive differentiation will be relationships - with employees, partners, and customers.
So what might a community-based organization look like?
Employment becomes a cross between a long-term commitment and free-agency: The organization provides employee overhead (benefits) in exchange for a commitment to work a minimum number of hours on organizational projects.
Pay Is Transparent: Pay is published for every position on a project. Base benefits are the same for everyone.
Profits Are Shared: People should have some above and beyond ownership stake in the organization.
Management tasks are either focused on professional development or projects: Managers - who are really just other employees - no longer 'own' a functional piece of the business but either manage a group of employees to help them choose projects and navigate their career or they manage projects.
Employees and Project Owners Negotiate Work Commitments: Employees are free to self-commit to projects for which they are interested and have time. Project managers define project roles, time needed, and associated pay and are responsible for recruiting team members and managing the project to completion. Employees can work as little (as long as the reach the minimum required for employment) or as much as they feel they are able to at that time. Project managers can solicit specific employees or change the pay to get employee commitment. This has the side affect of paying more, not less, for tedious or unappealing jobs.
Any Employee Can Be a Leader: Leaders are identified when they are followed, not we they are selected.
Employees Manage Their Schedules. If an employee has a family member with an illness and needs to work the minimum required, they choose their project commitments accordingly. If on the other hand, they have time and want more hours to maximize their income, they can choose a heavy schedule.
Employees define themselves by skill sets, attributes, and experience based on a published taxonomy so that project managers can find and solicit team members. They are free to take on any task and any project in which they are interested, if they can convince the project owner they can do it.
360 Degree Reviews. Everyone on a project gets to review the performance of everyone else, with some templates and guidelines to do so based on organizational values and goals.
Executive Tasks Are Earned. Based on the successful completion of projects that represent bigger and bigger pieces of business, executives earn the right to budget or more loosely defined (risky/innovative) projects. Some executives will continue to select projects with bigger budgets and some executives will likely continue to choose more innovative projects, depending on their interests.
A Senior Executive Team Is Still Necessary. The C-Suite will still set the overall strategic direction and priorities for the organization - with plenty of input. The C-Suite will also oversee the initiation of projects, the arbitration of issues between teams, and they will ensure gaps are being addressed. Their primary responsibility is to ensure a smooth environment in which others can optimally operate, not to delegate tasks.
All Projects Are Vetted, Prioritized, Budgeted and Scheduled. Any employee or customer can initiate a project but there are various committees, depending on the size and purpose of the project, that vets and schedules them. These committees are filled with project managers that rotate on and off of them, based on the interest of the project manager themselves in participating.
Customers Can Be Project Team Members. If a customer is particularly invested in a particular project and have the appropriate skills, they are incorporated into projects.
As individuals learn to operate in this way, they will have much more control over how, when, and on what they work making them more engaged, productive and happier. Companies, in turn, will be much more creative, innovative and productive.
The real effect of a community run company is that it will better address the holistic needs of its ecosystem by taking advantage of and producing value in monetary AND non-monetary ways - creating personal and social wealth beyond what we see in most of today's companies.
* Rob Cross' Social Network Analysis Case Studies
* Watch Terri Kelly of W.L. Gore talk about their culture, like this video here.
* Jon Husband's Blog Wirearchy
* Some of the free resources at The Community Roundtable
2) Create a plan that accommodates the unique culture and context of your organizations and identifies both qualitative and quantitative measures that include quality of life and the measurement of a variety of value types. Adjust the ideas in the hack to accommodate your situation.
3) Find a sponsor and budget to approve the experiment - it will be disruptive in the short term which will require time and resources.
4) Find a group of at least 30 people who are interested, both on the management and individual level in working in this way.
5) Work with the identified team to educate them about the new approach and adjust the plan with their input. Identify infrastructure and other needs required to support the structure.
6) Identify the scope of work that will be completed by this team so they they can break it into projects and teams.
7) Try it out. Adjust as you go. Keep everyone on the team included in changes and decision-making.
8) Give the experiment at least 2 years.
Allen Happe & the United Church of Christ
New Operating Models: uTest, SpiceWorks, Giff Gaff, & The Sky Factory
Stowe Boyd's concept of organizations working like Hollywood Studios
Many, many colleagues and peers working in the social media and online community world.