A networked organization is as strong as its weakest node — Creating Organizational Resilience

philip horváth
LUMAN.IO
Published in
6 min readMay 18, 2023

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image credit: midjourney

“Welcome to our network organization!” A pause ensues. The words hang in the air. In the virtual room, through the matrix of faces (those with their cameras on, at least), you can observe the four typical stress responses: frozen shock, an impulse to flee, flashes of anger and indignation, and then resignation. This isn’t the first management trend to disrupt the already stressful day to day. Yet another transformation…

In an era where speed is everything, competition is global, supply chains are volatile, and technological development is skyrocketing, it’s logical to favor decentralized decision-making and agile cross-disciplinary teams to accelerate much needed innovation. These teams dismantle corporate silos and focus collectively on rapidly delivering value to the customer.

But in a world where employees are accustomed to receiving orders, being evaluated by traditional KPIs, and motivated with carrots and whips this sudden empowerment can feel foreign.

Responses vary, but overall, stress levels are high, and there is widespread uncertainty about navigating this new world.

What can leaders do to establish a network organization that accelerates innovation without overwhelming their teams?

To answer this, we need to understand adult development. Robert Kegan’s research suggests that most adults (65% according to his research) operate at a socialized level of development or below. This means the majority of adults still seek external validation. We’ve been conditioned this way: parents, teachers, bosses dictate what is “right” or “wrong”. Our task has been to execute prescribed processes, even as technology began creeping up to replace us doing repetitive tasks.

This tendency is evident in our work with organizations (and is a reason many innovation initiatives fail): Employees often expect guidance through the innovation process, fretting over whether they’re “doing it right”. The eureka moment comes when they realize there’s no single “right” way. It’s not about a perfect persona profile or business model canvas, but about genuinely understanding their customer’s pain and passionately wanting to solve it.

This shift requires a move from socialized to self-authoring individuals. It’s about fostering deep empathy, “opening the heart”, utilizing our relational intelligence and activating our inherent ability to connect consciously rather than relying on external guidance. It marks the beginning of self-direction and authenticity (from Greek auto hentes — self doing).

Such profound personal transformation requires a psychologically safe environment, where employees can express vulnerability during their growth journey. Time for experimentation and learning, clarity on expectations, and explicit ownership of outcomes are critical for this development.

This shift also means moving from time-based work measurement to outcome-focused evaluation, a concept already present in Peter Drucker’s Management by Objectives from the 50s, evolved in Japan, and recently popularized through OKRs and Kanban boards. With the move to hybrid work and virtual environments, how work gets done is becoming less relevant than whether it’s completed. Instead of prescribed processes and work hours, employees negotiate the outcomes they commit to and are then held accountable for delivering on them.

When organizations transition from system optimizers to network organizations, they shift from measuring process and financial KPIs towards creating multi-stakeholder value as a strategy to reduce innovation risk and build resilience.

Being resilient and proactively shaping the future instead of perpetually firefighting demands a new kind of strategy. It requires new ways of measuring success, understanding that financial performance is just one set of efficiency indicators, not necessarily efficacy.

Management isn’t the only area to adapt; it merely defines our goals, boundary conditions and success parameters. Creating the future demands a new cultural operating system, too. It starts with clear purpose and vision and focuses on equipping people with the skills needed to collaborate in uncertain environments, so that they can innovate new processes and systems.

This brings us back to the starting point: people. After all, organizations are made up of people.

As above, so below. — Hermetic Dictum

Empowered individuals foster open environments and adaptable organizations, but this requires individual authentic contribution.

After all, a networked organization is as strong as its weakest node.

A successful network demands each employee, each node, to act from a place of self-authorship in service to a shared organizational purpose and vision.

This is where leaders lead the way:

  1. Commitment. Real transformation begins with commitment. True change demands more than wishful thinking or conditional dedication. Having a purpose and vision larger than oneself is essential to push beyond current limitations. Find a problem you’re passionate about and commit to continually finding solutions.
  2. Self-time. Prioritize time for personal development. Amidst the whirlwind of work and home responsibilities, this crucial task often gets sidelined. Plan for your year, month, week, day. Reflect on how you want to use your time purposefully, envision your future self, and identify obstacles that need addressing.
  3. Self-reflection. Regularly allocate time to reflect on past events. At a minimum, review your week, but ideally, reflect daily. What happened? What worked? What didn’t? What did you learn? Socrates once said, “The unexamined life is not worth living.” Without regularly self-reflection, time simply goes on slipping into the future.
  4. Kindness. Be kind to yourself first and then to others. Leadership isn’t easy. If it were, everyone would excel at it. Learn to laugh at yourself and remember that we’re all continually learning. Nobody is an expert on a future that hasn’t happened yet. Begin to associate rewards with learning instead of knowing. “Learning is finding out what you already know. Doing is demonstrating that you know it. Teaching is reminding others that they know just as well as you. You are all learners, doers, teachers.” ― Richard Bach. Everyone is doing their best by default
  5. Trust the process. Personal growth is a never-ending journey. You will continue to expand your awareness, increase your responsibilities, and learn to take more and more ownership of your creations and relations. You might make mistakes, even big ones, but it’s better to have tried than never to have taken a chance. As Nelson Mandela said, “I never lose. I either win or learn.
  6. Share your journey. Be transparent and share your process openly. Demonstrating how you handle your challenges allows others to learn and inspires them to share their experiences. Trust is built through shared vulnerability and fulfilled agreements.
  7. Lead by example. We’re social creatures who primarily adjust to our surroundings. So, leaders must lead by example and embody a drive towards clarity, ownership, and psychological safety in every interaction, fostering a space for conversation and collective learning.
  8. Find your allies. You’re not alone in your organization. As we work with clients, we keep finding individuals ready to take on the future, who want to make every moment count and bring everyone along on the journey.

In our leadership training and team-building courses, we consistently find that people are willing, often even eager, to take on new responsibilities, to be more than a cog in the machine, and to be creators of the future. Often they simply need purpose and permission.

Imagine the transformation we could achieve as individuals, teams, and organizations if we embraced a new way of working: one that respects each individual’s contribution, one that is leaderful with everyone authentically focused on creating value for our collective future.

Organizations are people, and as Aldous Huxley put it, “there is only one corner of the universe you can be certain of improving, and that’s your own self.

The best time to start is now.

The future belongs to those who create it. What kind of future can you envision? For yourself, for your organization, for the planet?

Connect with me through LUMAN or http://philiphorvath.com and let’s create the future together.

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philip horváth
LUMAN.IO

culture catalyst ★ planetary strategist — creating cultural operating systems at planetary scale — tweeting on #future, #culture, #leadership @philiphorvath