But who are our top leaders? The question had never really occurred to the speaker, who had simply assumed that our top leaders are the most highly paid - the people at the top of the triangle. Easy. But the kind of organisations that we most aspire to - who are nimble and innovative - do not have this kind of structure. It is not merely that they are smaller and flatter but more importantly that their leaders are emergent, so that a leader is someone who is worth following - as judged by their peers.
At Google the person who leads a major innovation is not necessarily a senior product manager; whilst at the BBC the person who introduces a great new program idea is almost certainly a senior commissioner. I believe that in a conventional, hierarchical organisation we know how to identify our leaders, but that in a world which changes more quickly we have to develop new mechanisms for identifying and supporting leaders. As organisations become more 'permeable' to their customers it makes sense to involve customers - not just peers - more closely in shaping that organisation's activities.
The same speaker was talking about a more flexible approach to our workforce to match increasingly fluidity on our requirements: specifically we are already depending more heavily on freelance and contract staff. And yet look at the pattern established for senior staff - each year they earn more, moving higher up the tree and accumulating additional responsibilities - despite the fact that their skills may no longer be relevant to a specific project or operating environment. I don't deny that they possess valuable experience, but probably best suited to a coaching role. And as we become more mercenary in our attitude towards human resources we should hardly be surprised if we see this reflected in our staff 'recognise and exploit my abilities or I will find someone else who can'.
The topic of performance-related pay was also raised, but in relation to leaders this is little more than lip-service: we don't know how to pay someone as a leader one year - when they are leading - and as a team-member the next, when this is what they are doing. Psychologically this seems strange, I admit - but I think it is because our model of leadership is based around our model of parenting: we are generally not the parent one month and the child the next. But this is precisely what is happening in a wide range of areas: we find that our children know more about some things than we do, and if we are to keep up we have to learn how to learn from them.
To put it another way, large organisations will suffer from an influx of younger generations who simply cannot believe that they are required to follow leaders who don't know what they are doing. And today this cannot simply be dismissed as arrogance; how organisations develop and sell products, how they relate to their customers, how they make money - all these things are changing. In some organisations very rapidly (thinking of Nokia here) and in others more slowly - but changing in every case.
The two diagrams below illustrate the picture quite clearly:
In times when cultural change (driven by technology) moves slowly, it makes sense to learn. Organisations work well when experienced staff are promoted, resulting in a hierarchical structure.
In times when cultural change is fast (post 1950s) then it makes sense to refer rather than learn. Organisations work well when good ideas or approaches are quickly shared and implemented resulting in a dynamic self-organising network.
In summary, there is an understandable reaction on the part of large organisations to erect defence mechanisms in order to protect the more conventional core - much like a castle sacrificing its outer walls in order to better defend the keep. However, adopting new, more flexible approaches to the workforce is a doomed strategy if the same thinking is not applied to business direction.
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