≷Be more Human¬Governance ℿ
The way you see people is the way you treat them, and the way you treat them is what they become.
Johann Wolfgang von Goethe
Over the last 5 years while living in Berlin, I co-founded Agora, Apoio and Coliga. In the process of building these companies we were able to experiment with multiple organizational structures. From a coworking-space to a cleaning service to a software company, these are all very different organizations, and yet they are connected by a shared purpose to explore different ways of working in order to create the circumstances for a more self-organized world.
We have made many mistakes in this process and I have come to realise that many of the limitations of our working processes were not due a lack of structure, but rather to the state of mind of the people operating it. I feel like I am still far from being at a place where I have found the perfect system of governance or presence required to operate it, but the long process of learning that took me where I am is an invaluable resource to build upon.
This piece explores the power of perspective as we make decisions on how to build our societies, and shares some practical insights and approaches towards governance, suggesting strategies that will help you build more participatory, open, transparent and accountable organizational systems.
Turnstiles and tickets
There is a parable related to incentives and fear that I would like illustrate in order to set the stage for my thoughts on governance. Once we catch the metro in a majority of the capitals of the world, we have to go through a turnstile. This object helps to make sure that everyone is controlled before coming into the transportation system, and for me it symbolizes a certain lens and set of assumptions that we carry about human beings.
Rather than having turnstiles governing their public transportation, some countries like Germany and Switzerland have opted for another system where there are no turnstiles. In these countries, it is your responsibility to purchase your ticket before entering the train, and at any time a controller could come and ask to see your ticket.
What is the fundamental difference between these two systems, and what does it have to do with governance?
The system with turnstiles symbolises a perspective on humanity that assumes from the beginning that they will do the wrong thing when nobody is watching. This assumption leads to the creation of a system that makes “cheating” close to impossible. In my opinion, these types of systems incentivise repression and non-critical behaviour, since they do not even give people the chance to decide to cheat in the first place. By contrast, the system without the turnstiles represents a much more positive outlook on humankind — it assumes from the beginning that we would be doing the right thing and creates a control mechanism to ensure this assumption.
In a sense, the system with turnstiles treats citizens like they’re stupid, and the other treats them as if they are intelligent. If you read enough academic reports or philosophical texts on governance, you might walk away thinking that the masses are stupid. To some extent, many recent political developments around world might make hard for us to argue otherwise. This begs the question: what are we doing as a society that makes the masses “stupid”? For me the answer is simple: if we treat people as if they are stupid, they will become stupid since in alignment with our presupposed assumption.
According to Niccolo Machiavelli “It is better to be feared than loved, if you cannot be both.” One could easily argue that this sentence represents the mainstream governing modus operandi, which is a very male oriented one dominated by fear and executed by the idea of command and control. While this approach might have served us in different times, it leaves us ill equipped to deal with the dynamism, diversity and complexity of the world that we live in. In order to adapt to the realities of the present age, we need new structures of governance that embody more matriarchal characteristics and make room for care, listening and empathy.
In 2014 Jeremy Heimans and Henry Timms published an article in the Harvard Business review called Understanding the New Power, which argues that an interesting and complex transformation is taking place in the world of governance. According to Timms and Heimans, two distinct forces are emerging: Old Power and New Power.
Old Power — It downloads and captures
According to their definition, Old Power works like a currency: it’s a scarce commodity and is generally held by only a few. Once it is obtained, it should be saved, and only a few can have substantial amounts to store and spend. This form of power is closed, inaccessible, and leader-driven, and it aims to maintain power only in a few hands.
New Power — It uploads, and it distributes
By contrast, Timms and Heimans define New Power like a current: it flows between many. New power is open, participatory, and peer-driven, and like water or electricity, it is most forceful when it surges. The aim with new power is not to hoard it but to channel it in order to to distribute power to the many for the sake of the many.
Around the same time that this article was published, former McKinsey & Company consultant Frederic Laloux released the book Reinventing Organizations, which includes numerous case studies that illuminate the failings of the predominant “command and control”, old-power models of governance. In this book Laloux provides compelling examples of emerging organizational models that are defined by self-managing teams, and presents 12 organizations who use new ways to manage work and their employees. These so called evolutionary-teal organizations are both agile and adaptive, and are well known for delivering sustainable value that serves people and the planet, and are achieving impressive results across a wide range of industries. Examples of teal organizations include companies like Patagonia, Buurtzorg, FAVI, Morning Star, AES and Zappos.
To demonstrate how these organizations differ from others, Laloux portrays them in terms of five levels of consciousness that have emerged over time through the evolutionary history of organizational structures: Red, Amber, Orange, Green, Teal.
In a world filled with complexity and dynamic systems, traditional organizational models (Red, Amber and Orange) face more and more challenges as they struggle to adapt to their environment. Still using formal titles, fixed hierarchies, and organization charts, many of these organizations strictly separate planning and execution, where the thinking happens at the top, and the doing at the bottom. This dynamic is not helping these organizations to evolve at the pace required in order to stay relevant in an age of constant change.
Many of these organizations are thought of as machines, where a leader up in the hierarchy turns a cog that directs the workers below. They constantly talk about inputs and outputs, “pulling levers” and “moving the needle”, and think that change can be effectively planned and mapped out in blueprints, then carefully implemented according to a plan.
However detailed and complex these organizational machines many become, they are eventually challenged by external structural and cultural constraints due their hierarchical command and control model. They demonstrate a lack of coordination across business units and silos and struggle to foster agility and responsiveness, since the organizational structure is too rigid and workers do not have the power to make decisions and address opportunities that demand immediate action.
In addition, these structures stifle innovation, as insights from on-the-ground workers are left uncollected, and critical decisions are too far removed from the day-to-day work. This does little to create a culture of empowerment or responsibility, since employees do not feel an obligation to do something about the issues they sense that falls outside the scope of their role and leads to claims like, “it’s not my problem”. Old Power organizations are also marked by restricted advancement opportunities, since their rigid organizational charts put an artificial ceiling on the growth of talented individuals. Conversely, some decision-makers may be undeservedly locked into influential positions for reasons related only to tenure or status. This disempowering context also fails to effectively integrate human emotion, embrace diversity, or resolve personal conflict, which makes them susceptible to internal strife and division.
If traditional models no longer serve us, what new paradigms of governance are emerging to fill the void? In addition to the teal organizations like the ones Laloux outlines, there are many other examples of organizations and methodologies with characteristics that directly respond to the challenges of Old Power organizations.
“Employee involvement must be real, even when it makes management uneasy. Anyway, what is the future of an acquisition if the people who have to operate it don’t believe it’s workable?”
Ricardo Samler
The Brazilian entrepreneur Ricardo Semler is one the pioneers of this emerging governance paradigm. His company, Semco Partners, is built upon principles of self-governance. Under his leadership, Semco’s revenue has grown from 4 million US dollars in 1982 to 212 million US dollars in 2003, and since then, his innovative business management policies have attracted widespread interest around the world. In 1989, Ricardo published an article entitled Managing Without Managers in the Harvard Business Review and recently gave a TED talk on how to run an organisation with almost no rule.
Leveraging insights from these developments in the business world, leaders across sectors are responding to change by adapting principles of self organization to their work in communities. Over the last several years we have seen the appearance of numerous distributed communities which have emerged through the power of collaboration and the support of digital technologies. Some of the most well known examples are communities like Ouishare, Sensorica and Enspiral, which each have also distilled their approaches into new tools, best practices and frameworks that serve the those interested in new governing paradigms.
Through this process, several methodologies have also emerged to help people apply more self-organized and participatory practices in their own organizational contexts. For instance, the Art of Hosting, an open source community of facilitators, has aggregated several practices for participatory leadership where one can harness collective wisdom to enhance the capacity of groups to self-organise and harvest the insights from collective consciousness. (see list of practices here)
One of the most potent methodologies practiced in the Art of Hosting community is the U-process, a change management methodology used to change unproductive patterns of behavior. The U-process was created in 1968 by Fritz Glasl and Dirk Lemson of the NPI (Netherlands Pedagogical Institute) and further developed by MIT professor C. Otto Scharmer as Theory U in the early 2000s to incorporate theories of presencing and Capitalism 3.0.
Beyond these methods and tools, Sociocracy is a system of governance built upon similar principles. It embeds consensus decision-making processes into organizational structures based on cybernetic principles. Sociocracy has been advocated as a management system that distributes leadership and power throughout an organization. Modern Sociocracy was developed by Gerard Endenburg as a method for use in governing an electrical engineering company, and is applicable to any organization.
Another company operating system that has been popular among startups is Holacracy, which is both a social technology and system of organizational governance. In this system, authority and decision-making are distributed throughout a holarchy of self-organizing teams, rather than being held by a management hierarchy. Through our efforts at Agora and Coliga we have adapted the principles of Holacracy to our organizational structure. With this structure, our roles change regularly and our workflows become more transparent as we work together towards collective goals. While we’re in the early stages of experimenting with this system, we are already seeing how our meetings are becoming more efficient and our work responsibilities more flexible as we learn how to distribute leadership different roles within our company.
In light of these developments, it is becoming apparent that we are living in an embryonic phase of new governing structures. In this moment, we have the opportunity to challenge the normative ideologies that reign our understanding of power and hierarchy by experimenting with new models and approaches. At a fundamental level, this experimentation seeks to dislodge fear as the main motivational force in society. By creating more participatory governance structures, we can distribute responsibility among people and create a foundation for overcoming this paradigm of fear by the power of trust.
The challenge we face today is to create safe containers for nurturing these participatory experiments while simultaneously finding ways for them to interface and affect change within our current social and economic systems. At present, many of these experimental structures are operating within distributed networks of like-minded changemakers, and out of their initial efforts we are already starting to harvest new models which could potentially become alternatives for the broader society.
The challenge as we start to implement new models is not repeat patterns of the past by assuming that people will self organize and work things out over time. It reminds me of a comment from a friend, who recently asked in a joking tone: “Who is organizing all the self-organization?” To avoid creating systems where frustration emerges through the lack of clarity and coherence, it will be important for the pioneers of the new paradigm to come together and learn from the successes and failures of historical governance experiments and prevailing systems of governance alike.
At Coliga, we are keen to explore new models of governance and learn from others who are going down similar paths in order to create the conditions required for a more collaborative society. Stay tuned for our the next post written in collaboration with Philipp Skribanowitz, founder and CEO of Mimi. Through this piece, we will share practical insights on how we operate our companies using Holacracy with the support of Asana, an online group task management tool.
Written by: Pedro Jardim
Edited by: Ben Riddle
