Almost every business older than ten years runs on a hierarchical structure. This structure has equipped businesses for ages, making sure they are accountable, profitable and running smoothly.
This hierarchical structure is under attack when looking at social business. To refresh your memory, social business is the process of taking all that is good in social media technology and using it to better your business. Social media technology can help organisations improve collaboration, increase employee engagement, break down silo’s and create a friendlier environment for generation y.
Why social business challenges a hierarchy structure is that it removes it completely. There is no hierarchy in social media. A person is a person with a profile, an idea is as good as it is (not where it comes from) and respect is earned from what you put in not what title you hold.
John Kotter recently presented an idea on HBR that suggests business may need to take on a network structure in the future. I believe that this network structure would be a great asset to the business looking to social business practices. The set of this article is an excerpt from John’s article:
But 20th-century, capital “H” Hierarchy (a sort of hardware) and the managerial processes that run on it (a sort of software) do not handle transformation well. And in a world with an ever-increasing rate of change, it is impossible to thrive without timely transformations. The data, case studies, and personal anecdotes to this effect abound.
The challenge is that, at both a philosophical and a practical level, the Hierarchy (with its management processes) opposes change. It strives to eliminate anomaly, standardize processes, solve short-term problems, and achieve stopwatch efficiency within its current mode of operating.
In a sense, the crowning accomplishment of the Hierarchy and its management processes is the enterprise on autopilot, everyone ideally situated as a cog whirring on a steady, unthinking and predictable machine. Thus, the Hierarchy ignores new opportunities that require transformation because these don’t align with its core purpose of maintenance and optimization. A market opportunity for tablet computers, for example, is more of a distraction than an opportunity to the hierarchy of a giant PC manufacturer focusing on this quarter’s earnings targets.
That is not to say that small- and medium-sized change are impossible in the Hierarchy. In fact, many critics point to change management processes, Kaizen initiatives, and the like as evidence that the Hierarchy can do change. But I am referring to something far bigger: large-scale organizational change, such as a company redesigning its entire business model, or accomplishing its most important strategic objectives of the decade, or changing its portfolio of product offerings. And there is no evidence to suggest that the Hierarchy allows for such changes, let alone that it effectively facilitates them.
All of this has led me to believe that the successful organization of the future will have two organizational structures: a Hierarchy, and a more teaming, egalitarian, and adaptive Network. Both are designed and purposive. While the Hierarchy is as important as it has always been for optimizing work, the Network is where big change happens. It allows a company to more easily spot big opportunities and then change itself to grab them.