Network and Hierarchy: The Dual Operating System of Sustainable Organizations

As a man­ag­er today, it is nec­es­sary to have more abil­i­ties than just to climb the career lad­der as far as pos­si­ble. The hier­ar­chy is with­out ques­tion an appro­pri­ate form of orga­ni­za­tion to effi­cient­ly man­age today’s and well-known busi­ness. How­ev­er, when it comes to respond ade­quate­ly to the ever-increas­ing pres­sure of change in an ever-short­er peri­od of time, the hier­ar­chy and clas­sic change pro­grams reach their lim­its. John P. Kot­ter there­fore argues that change should be under­stood as the new nor­mal and he there­fore sug­gests the net­work as a sec­ond oper­at­ing sys­tem for orga­ni­za­tions. This net­work is cross-hier­ar­chi­cal and orga­nized as loose­ly cou­pled ini­tia­tives of intrin­si­cal­ly moti­vat­ed vol­un­teers. Build­ing it up, main­tain­ing it and mak­ing con­tri­bu­tions to it is a very impor­tant task of lead­er­ship in order to cre­ate sus­tain­able orga­ni­za­tions in times of change. That is pre­cise­ly why the fourth the­sis in the Man­i­festo for Human(e) Lead­er­ship is called “Con­tri­bu­tions to net­works over posi­tion in hierarchies”.

The hier­ar­chy has its jus­ti­fi­ca­tion and its advan­tages when it comes to orga­niz­ing the known busi­ness mod­el accord­ing to defined process­es and roles as effi­cient­ly as pos­si­ble. How­ev­er, this is not enough to ensure long-term and sus­tain­able suc­cess. In addi­tion to this hier­ar­chy, which is designed for sta­bil­i­ty and effi­cien­cy for today’s busi­ness, orga­ni­za­tions also require a com­po­nent which is respon­si­ble for change, improve­ment and tomor­row’s busi­ness. This role tra­di­tion­al­ly falls to strat­e­gy depart­ments, change pro­grams, task forces and the like. The change is thus a (tem­po­rary) part of the hier­ar­chy and con­trolled with the famil­iar meth­ods of man­age­ment. For major changes with a known goal, such as the intro­duc­tion of a new enter­prise resource plan­ning sys­tem, a new com­pen­sa­tion mod­el and such, this works quite well using the famil­iar change man­age­ment techniques.

The basic assump­tion, how­ev­er, is that change is rather the excep­tion and strat­e­gy and strate­gic deci­sions are the respon­si­bil­i­ty of a few strate­gists and top man­age­ment. But what if the world becomes so volatile and the mar­kets so fast that change becomes the rule? Then these hier­ar­chi­cal process­es start­ing with iden­ti­fi­ca­tion and eval­u­a­tion of oppor­tu­ni­ties to set­ting up a strate­gic change projects fail because of their cum­ber­some nature caused by the hier­ar­chi­cal deci­sion-mak­ing process­es. In order to be suc­cess­ful in such a world, change — in addi­tion to the hier­ar­chy for effi­cient orga­ni­za­tion of today’s busi­ness — must become the sec­ond nature of the orga­ni­za­tion, the sec­ond oper­at­ing sys­tem, as John P. Kot­ter describes in his book “Accel­er­ate”.

We can­not ignore the dai­ly demands of run­ning a com­pa­ny, which tra­di­tion­al hier­ar­chies and man­age­r­i­al process­es can still do very well. What they do not do well is iden­ti­fy the most impor­tant haz­ards and oppor­tu­ni­ties ear­ly enough, for­mu­late cre­ative strate­gic ini­tia­tives nim­bly enough, and imple­ment them fast enough.
John P. Kot­ter. Accel­er­ate! in HBR Novem­ber 2011

The idea behind this net­work as a sec­ond and equal oper­at­ing sys­tem is to recruit an army of vol­un­teers across the hier­ar­chy. The task of this net­work is to work con­stant­ly on the change and advance­ment in small loose­ly linked ini­tia­tives. This net­work of intrin­si­cal­ly moti­vat­ed peo­ple is guid­ed by a strong com­mon pur­pose and a com­mon sense of urgency. This strate­gic align­ment gives ori­en­ta­tion for these vol­un­teers con­stant­ly dri­ving change.

Lead­er­ship is not a rank or a posi­tion, it is a choice – a choice to look after the per­son to the left of us and the per­son to the right of us.
Simon Sinek

The man­agers of the hier­ar­chy as first oper­at­ing sys­tem play an impor­tant role in this game. In addi­tion to their main job as day-to-day man­agers, they must ensure that the net­work as sec­ond oper­at­ing sys­tem thrives and that con­tri­bu­tions to it are seen as equiv­a­lent and impor­tant. This calls for lead­er­ship with pur­pose and trust. First of all, ori­en­ta­tion is need­ed through a com­mon pur­pose and a com­mon vision to which peo­ple can say yes whole­heart­ed­ly and to which they would like to make a vol­un­tary con­tri­bu­tion. Then it requires per­mis­sion and the free­dom to become active in this net­work. And oth­er­wise it sim­ply takes faith in the cre­ativ­i­ty of this army of vol­un­teers. With­out hier­ar­chi­cal pow­er, only trust can hold this net­work togeth­er and make col­lab­o­ra­tion pro­duc­tive and effec­tive. And trust results from gen­er­ous con­tri­bu­tions to the net­work. There­fore, the fourth the­sis in the Man­i­festo for Human(e) Lead­er­ship says “Con­tri­bu­tions to net­works over posi­tion in hierarchies.”