Bureaucracy is plagued with inherent blind spots. Because bureaucracies leverage the individual intelligence of elite experts by giving them command-and-control authority, they often kill the human spirit of the many, which may explain why Gallup’s worker engagement surveys consistently find that only about a third of employees are actively engaged in their work. This troubling metric is a clear signal that most organizations are not healthy workplaces. This is problematic because unhealthy workplaces kill not only the human spirit, but also the capacity for innovation. This is further compounded by the reality that experts are rarely innovators. Instead, experts are highly knowledgeable about the way things have been done in the past and are often heavily invested in the status quo. This tendency often causes experts to be blind to future possibilities that may challenge conventional ways as happened when John Antioco, the CEO of Blockbuster’s in the late 1990’s, turned down the opportunity to buy Netflix, dismissing the budding interest in the internet as completely overblown.
The persistence of blind spots is an inherent organizational design flaw that can be fatal when businesses need to be highly competent at innovation. This flaw is a product of the fundamental design principle that shapes the top-down, hierarchical organizational model: Trust authority. Hierarchies ascribe authority to the elite few who perform two specific roles—bosses and experts—to bring order to the workflow of large numbers of people. Bosses are given command-and-control authority to ensure management directives are carried out, and experts are often the exclusive source of intelligence within organizations. In some instances, these are two different sets of people; in other instances, these roles can reside with the same person. Top-down hierarchies are designed to amplify the voices of these two trusted authoritative roles.
Unfortunately, one consequence of relying on the intelligence of the elite few to guide decision-making is that organizations limit their intelligence. In stable times, this flaw may be livable, but in rapidly changing times, as we learned with Blockbuster, this flaw can be fatal.
When the guiding design principle of organizations is to trust authority and when people are expected to do what they’re told, everyone is expected to get on board with the thinking of the elite few and comply with the plan. Thus, hierarchical management's prime focus is control, especially controlling people. This focus on control is often the catalyst for executive blind spots.
The irony is that, often, the best way for leaders to ensure their organizations remain under control is for them to give up the notion that they can personally control the work of others. They need to understand that, in a rapidly changing world, the work of management is not about expanding control; it’s about expanding consciousness. And when the focus of management is about expanding consciousness, the organization is built around a very different organization design principle: Nobody is smarter than everybody.
When the world is changing rapidly and business problems are becoming more complex, business leaders need to imagine futures that are very different from the past. To do this they need to become aware of their unconscious biases and discover what they don’t know that they don’t know. They can only do this if they learn how to practically leverage the collective intelligence of everyone in their organizations. A management model that is focused on expanding consciousness uses all the intelligence within their organizations to eliminate the blind spots that can cause business leaders to make bad decisions that can literally kill a company.
Business leaders who want to leverage the power of collective intelligence to build better companies embrace a very different management model: the self-managed peer-to-peer network. The enablement of effective self-organization, a natural attribute of peer-to-peer networks, eliminates the blinders that disorient traditional managers. The ability to adapt to rapid change is the hallmark of a well-controlled twenty-first-century organization. Conversely, when leaders insist on maintaining tight control over everything happening within their businesses, their unconscious biases often cause their companies to spin out of control.
For those who would like to learn more about the peer-to-peer network management model, next week, on February 20, my new book, Nobody Is Smarter Than Everybody: Why Self-Managed Teams Make Better Decisions and Deliver Extraordinary Results, will be released. The book describes companies that have used this innovative management model to grow from start-ups to market leaders and provides answers to those who despise the blindness of bureaucracies and know there has to be a better way.
This is spot on. We know many businesses now that the leader’s decentralized themselves and made the system transparent then ran the system using collective intelligence.
We wrote about it several times. We should talk.
https://open.substack.com/pub/joshketry/p/fix-any-business-using-human-swarm?r=7oa9d&utm_campaign=post&utm_medium=web