States of Matter
We are all familiar with the properties of water. It transforms magically at different temperatures — from a solid to a free-flowing liquid, to a vapor that appears to have no substance at all. Scientists are familiar with another state of matter that exists only at very extreme temperatures – plasmas – where atoms themselves break apart. The way matter behaves depends on the strength of the bonds between molecules and particles.
We can look at organizations in the same way. Depending on the power relationships in organizations, they too have different properties. We can call these hierarchy (top left), hybrid (top right), network (bottom right), and crowd (bottom left).
At one extreme hierarchy (top left) concentrates and centralizes power in a chain of command. At the other, crowd (bottom left) is anarchy, with no defined power structure. Between the two extremes, network (bottom right) distributes power without command leadership. Hybrid (top left) blends hierarchy and network, relying on authority and influence in a cross-linked organization where power is more diffused.
A pioneer of systems thinking in business, Ralph Stacey wrote extensively about power and organizational structures. In Managing the Unknowable: Strategic Boundaries between Order and Chaos in Organizations (1992), he described the behavior of hierarchies, hybrids and networks. I have added the summary diagrams.
Hierarchies are very stable organizations. “If power is highly concentrated and is always applied as force or authority,” Stacey says, “the result is a very stable organization in which little complex learning occurs because the boundary conditions are too tight. The organization can then deal only with whatever open-ended change the most powerful notice and are capable of handling. Strategy becomes the result of the intention of the top executive, and unless that executive is exceptionally talented, the organization will fail to develop sufficiently creative new strategic directions to survive.”
Hybrids are nimble. “If power is unequal but distributed and applied in forms that alternate according to the circumstances,” Stacey says, “we find a flexible, fluctuating boundary around the political process that enables complex learning. The political and learning activity that may produce creative choices is spontaneous and self-organizing. We cannot instruct anyone to have a creative idea in an open-ended situation. We cannot orchestrate factions and coalitions between people that will be guaranteed to support the right idea. All we can do is set up the boundaries within which behaviour favorable to the emergence of an innovative choice might occur.”
Widely distributed power without authority creates a more organic organization — with the ever-present danger of fragmentation. Continuous effort is required to sustain collaboration. “[V]ery little complex learning occurs, this time because the boundary conditions are too loose. Instead of new strategic direction for the organization as a whole, we find fragmented strategies arising from individual intentions that rarely converge because the group dynamics encourage only continual conflict or avoidance.”
I have added crowd to round out the comparison. Like the plasma state of matter, crowds have very weak social ties. In the extreme they are highly emergent and unpredictable.
Hierarchical organizations predominated in the 20th century and are still the most common structure. This is changing now, however, as we look for ways to increase creativity, adaptability, collaboration, and initiative.
This article is an excerpt from a book in progress on collaboration and transformative change. It was first posted on January 16, 2018, on LinkedIn.