The future of organizational design

To those who I think a great deal of, I ask what keeps them up at night. For the last few years what has kept me up late at night is how we work. The lessons, tactics, and mindset I learned in college as an industrial engineer seemed stale in 2007 — and increasingly so now. How is it that techniques developed in the 20th century are still driving business decisions today? To what extent are they? What new methods, systems, or paradigms are present today? Is this shift happening now do to incredible complexity and new omnipresent technologies?

In our organizational behavior course, I read an article titled "A Future More Powerful than Hierarchy" by Frederic Laloux in which he establishes the basic tenants of his work, Reinventing organizations. In it he makes the case for self-management. The term itself is not explicitly defined here, but it is an extension of what we've seen with agile methods, and it means an organization without bosses. He goes onto say that "self-managing organizations aren't simply pyramids where you've taken out the hierarchy", that it is something entirely different.

Laloux writes of large organizations that "operate entirely without power hierarchies." He makes this distinction of "power hierarchies" I think to separate the idea of a hierarchy of ownership. In my MBA class, many who found themselves uncomfortable with the concept of self-management — or holacracy as was the topic at hand — were actively dismissing this notion that they would want to belong to such an organization, unsure as to how such an operation would exist. A workplace without hierarchy was unimaginable, albeit much of what is written about holacracy states that hierarchy does not just vanish, but instead it behaves differently.

When folks here a lack of hierarchy, they also conflate this with a lack of control. The piece makes a point to argue the new structures and mechanisms have "more contorl built in than traditional hierarchies". (Why do we want more controls? This might be explained in how individuals take up roles and make decisions within the confines of those roles.)

All of this is an enjoyable thought experiment, one where Laloux seems to have many answers and rebuttles. The aspect of what he writes that I find most intriguing is about systems more powerful than hierarchy (emphasis mine):

We are surrounded by truly complex systems that operate with clear structures and coordinating mechanisms, but no bosses. Take the global economy. Billions of consumers, millions of companies making trillions of choices every day. This is a complex system of stag- gering proportions. There are structures and coordi- nating mechanisms, but there is no boss, no pyramid trying to steer it all. Thank goodness! Only North Korea and Cuba still try to steer their economies with a central planning bureau, and we know how that is working out. (Note the irony, though: we scoff at the idea that you could run an economy through central planning, and yet, we still unquestionably accept that that is the best way to run an organization.)

Is this not a compelling inconsistency?