Networks versus Hierarchies

On the future of enterprises

The feedback on the technological IF Forum on June, 27th, 2014 at the Unterhaching Sportpark was wonderful. Many thanks to all who where there. I already look forward to watching the video recordings of all the presentations.

Here are the lecture notes for the presentation I held after the event.

The IF Forum was about:

“Self-organisation as a formative model for enterprises in the 21st century”

sudburyOn one of his first days as our new (!) colleague in the board gave me the Sudbury-Book – a gesture I found both courageous and really great.

The book is about liberal schools. It is a very radical plea for liberal education. Compared to “Sudbury”, the good old “Summerhill” model we all appreciated so very much during our youth is truly authoritarian.

Incidentally, I believe a little more “Sudbury” would be good advice, and not just for our schools. It would also help our enterprises. Mind you, I am not just talking so-called “brain workers”.


Once upon a time, we had an “industrial revolution”. Many workers were needed in the factories. However, there were no skilled workers on the human market. To make up for it, there was a huge surplus of unskilled persons, some of whom had grown up on farms. Farms, in particular, were places where – due to new technology – masses of employees were made redundant. They had all worked in a rural environment. They were simple people, not used to time-oriented discipline and without any experience with technological work.

The first conveyor-belt production of Ford’s T Model is a nice example of this industrialization 2.0, which followed after the extended use of the steam engine as a power machine (industrialization 1.0). Suddenly, time and the clock became relevant factors. The “caste of engineers” took over production control and ruled over the unskilled labour. “Modern Times” as in Charlie Chaplin had begun.

In the 21st century, we have a totally different image of humans and the world – at least in our society:
”War is over!“
”Future is female!“
”We want freedom and peace!“
“because we no longer believe in a life after death!“
And the science of management, too, underwent change. For example, Hans Ulrich of the Hochschule St. Gallen founded the “Management Model” in the early 1980ies and wrote an article titled:

”Eight theses on the change in management“.

They are:

To accept the unpredictability of the future as a normal state of affairs;

To extend your personal borderline of thinking;

To let yourself be governed by “both”, instead of “either-or”;
To think multi-dimensionally;
To understand self-organization and self-control as formative models;
To consider management as a meaningful function;
To focus on what is really important; 

To make use of group dynamics.
To me, this looks clear and rational.

Basically, with this list, Hans Ulrich said everything that needed to be said in the early 1980ies. But it seems that some “managers” have not heard any of it to this day.

25 years after the essay by Hans Ulrich, I met Simon Grand, who is also from St. Gallen. I cooperated with him during several workshops. And I learned from him that, when all is said and done, the one thing that makes a manager a good manager is that he knows a little more often than others which decision is good and which is bad for his enterprise. And this is how the good manager makes the right decision a little more often than your average person! According to other research done by the Hochschule St. Gallen, the ratio of wrong decisions is gigantically huge.

A short time ago, I tried to come to terms with the meaning of the words collateral damage (Kollateralnutzen). In Wikipedia, you will find it defined as fringe damage or accompanying damage, which is accepted even if not predictable. I would have defined it as secondary damage.

So far, Wikipedia does not give you any explanation for “collateral benefit”. I am sure this will soon be remedied. In google, you can find the term collateral benefit at the top of (today’s) list as fun opposite of »collateral damage«.

Isn’t it sad: whenever something “evil” happens, you have collateral damage, but there is no “collateral benefit” accompanying “good” things happening. At least not in Wikipedia. Incidentally, I am quite sure that all these things have been written about in philosophy. Except – in our omniscient internet, which certainly has a huge influence and educational value for us, the “collateral benefit” as fringe, accompanying or secondary benefit is not yet known. The philosophers really should do a better job.

I will just claim that a “good” manager will create mostly collateral benefit for (not just) his enterprise. His behaviour is “constructive”. Just like a “bad” manager will create collateral damage – which means he is “destructive”.
And you can see that the classic management doctrine reaches its limits in the times of “Generation Y”.

🙂 Surprise, surprise: all of a sudden you realize that good decisions cannot be made just by rationally deducing from collected facts. Instead, intuition of experience is quite important. And you notice that it can even be proved scientifically.

Consequently, what we get is a set of questions which do not just apply for creative intellectual jobs:

Is Taylorism still constructive?

Maybe regionalization should again be put before globalization?

Have we finally understood that the future cannot be predicted?

How do we cope with this truth?

Do we accept that

  • planning things gets harder and harder, that we have to prudently learn as we try to find our way through these complex worlds and that human beings are more important than efficiency? – #agile in the sense of the “Agile Manifesto”,
  • there will (or has to) come a time of participating and sharing – #open,
  • we will have to go back to doing things the simple way and to always do better – #lean?

Will we manage to contribute with our own talents and competence as each individual situation requires?

Are we courageous enough for civil courage and constructive disobedience?

Maybe we should go back to giving intuition again a relevant role when it comes to making decisions?

Is efficiency still the prior goal? Or is it more about resiliency, the ability to adapt?

Should we not – first and foremost – try to adopt a constructive mind-set. After all, it is immensely important for what we decide and what we do.

Do we really still need persons to tell us what to do?

Why is nobody confident that we will learn together and then do the right thing? In the sense of the Common Interest.

We will not solve tomorrow’s problems by using yesterday’s solutions and we must limit the power of all kinds of hierarchical systems. This is the only chance we have to live (and survive) in freedom through shared and collaborative behaviour based on ratio and to shape the future in the interest of man and our creation.

(Translated by EG)

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