When Hierarchies and Networks Collide

The Emerging Frontier for Organizations

Civilians fleeing Basra, Iraq, March 2003. Paolo Pellegrin/Magnum Photos

Earlier this month, the New York Times Magazine devoted an entire issue to a single story, Fractured Lands, that examined the Iraq war, Arab Spring, the rise of ISIS, and the current refugee crisis from the perspective of six witnesses. To me, the topic broaches a bigger theme about the tensions between hierarchies and networks.

In today’s era we often hear about the positive effects of technology, the spread of information, and the enabling power of social networks. Yet, rarely do we question the stance of those who resist this, the institutions and organizations that want to obstruct the flow of information and resist change.

What happens when a hierarchy meets its match in today’s networked world? Who wins, the hierarchy or the network?

If anything, the popular upheavals that we’ve seen since 2011 across Syria, Egypt, Yemen, and Libya have exposed the extent to which some organizations (i.e states) would go to take over and quash any opportunity for other networks to emerge and resist them.

Hierarchies vs. Networks

Hierarchies and networks are very different forms of organizing. The hierarchy usually consists of a vertical organization that is centralized with top-down command and control functions. Hierarchies include a wide range of today’s fledging organizations across multiple polities, including clans, tribes, states and any org charts that looks like this:

A hierarchy

Networks, on the other hand, are self-organizing structures. Networks are random and spontaneous and as such they are hard to monitor and inherently complex. Networks span our everyday life, from the distribution of our DNA, to the public markets through which we exchange goods and services and some of the more forward thinking organizations in which we work.

A network

Since networks are not planned or directed by a single authority, they have a great capacity to innovate and spread. At the same time, and largely because of their unpredictability and penchant to spread, they pose a threat to the established structure and order of a hierarchy. Should a hierarchy gain control of a network, and, in the process compromise its self-organizing properties by trying to direct and control it, then a network faces a critical challenge to its survival.

Consider this, throughout the 20th and early 21st century, a succession of network driven waves of innovation produced powerful and mainly positive externalities leading to decisive improvements in access to information, knowledge and innovation.

The telephone and its network allowed ordinary citizens to communicate with one another. The internet drastically improved the availability of information and the advent of laptops and smartphones spurred the growth of social media channels.

In the age of Apple, Amazon, Google, and Facebook, employees, consumers and citizens all expect basic functionalities and rights. Where the hierarchies fail most dramatically, new networks will emerge and increase the probability of successful disruption as we’ve seen with hotels (Airbnb), ride-hailing (Uber), video streaming (Netflix), and electric cars (Tesla).

These networks pose challenges to established hierarchies in three different ways. First, they drastically increase the volume of information and speed with which others have access to it. Second, they empower the individual to publicize things more broadly, beyond their social circle. Just think about how we would remember Beijing’s Tiananmen Square protests of 1989 if everyone participating had the equivalent of Snapchat and Twitter. Third, they expose the inefficiencies of hierarchical forms of organizing and their inability to fulfill pledges as a result of outdated policies, unnecessary processes and bureaucratic procedures.

The growth of networks continues to empower different communities to organize and express themselves. Established hierarchies around the world, democratic and undemocratic alike, are taking notice of the profound challenges posed by this fundamentally different way of organizing.

When Networks and Hierarchies Collide

The cheerful talk around how networks democratize access to ideas and information collides with hierarchies looking to control the inherent randomness and spontaneity of networks.

True, new networks allow organizing in new ways and the rapid spread of information via smartphones and social media, but these are often easy to tap, cut, and control in favor of the hierarchies. That’s because the ownership of the information structure and the data within the network is concentrated within those hierarchies. Those organizations that have the capacity to block content, shut down websites, and control what users can access hold sway over the effect of networks.

During the 2011 uprising, the Egyptian government famously shut down access to Facebook, Google, and Twitter to prevent social media from being used to foment unrest. More recently in July 2016, access to Facebook, Twitter, and YouTube was blocked in the midst of a military coup in Turkey. Even in the United Arab Emirates, ancient VoIP laws mean that services like Skype, Hangouts, and FaceTime are banned or throttled by telecom providers.

The plight of some of those states is a case in point of the triumph of hierarchies over the new networks. The victory of hierarchical organizations in the political realms shows that whatever the aspirations of a network of motivated revolutionaries or activists may be, their ideologies end up as sources of legitimating the current modus operandi to those that control the hierarchy.

Established hierarchies will not hesitate to take over or hijack an emerging network and subordinate the network to their priorities, as we’ve seen happen across the Middle East.

Any attempt to engage with organizational change as a network of self-organizing, emerging, and nimble actors isn’t necessarily emancipated from the tyranny of the hierarchy.

In an ideal world, a networked organization of individuals sharing all available data with maximum transparency has a certain appeal to those opposing the hierarchical order. However, we can’t dismiss the suspicion that despite all the hype of the Information Age, structural hierarchies that own and control a network can stifle free information flow, rapid learning, and adaptability in favor of efficiency and predictability.

The most striking thing about our world today is the enduring legacy of centuries old hierarchies juxtaposed with fantastic technology-enabled and rapidly growing networks. The tension between hierarchy and networks is fundamental in charting the course of the future of work. How can beneficial networks be nurtured in organizations? Where does a legacy hierarchical structure and a nascent network intersect and support each other? How can we determine if our organizations are choking the life out of potentially beneficial networks before they can really make a positive impact?

The power of networks is unmistakable and only those organizations that will adapt to live in this new reality will ensure a stake in the future economy. As British economist John Maynard Keynes once said “When the facts change, I change my mind, what do you do sir?”

What will you do? What will your organization do?

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