"We've always done it this way." I've heard this in a variety of forms many times in my career, usually as a precursor to an argument against organizational change or a business transformation objective.
However, it seems we shouldn't be worrying about hearing it in the workplace but where it stems from.
Jeffrey Pfeffer of Stanford, a professor of organizational behaviour, shared his thoughts in a news entry on their main website in 2014. Reading through the article was a disappointment, as academia seems part of the cause of the lack of innovation in organizational makeup by arguing for the good old days.
Pfeffer’s students are largely millennials — the youngest generation now in the workforce, born between about 1980 and 1992. He says that they, like much of the media, think the traditional power structure in business is changing and that companies are becoming more dynamic and less hierarchical.
They’re wrong.
The gap in logic here is that these students understand the landscape of business more than Pfeffer does now. Whether labelled as 'millennials' or not makes no difference, the attitudes of students, of workers, of the c-suite, are changing as they recognize that practices of the industrial age don't hold true anymore if businesses are to remain competitive.
While hierarchy has its place in seeking to maintain career structure the fact of the matter is that companies are embracing new ways of working. Internal enterprise networks have had a major impact on organizational effectiveness, but more importantly these types of networks provide major business advantages for the employees. Understanding the networked value of employees outside of a hierarchical structure is absolutely key in todays transparent business context.
What is the impact of a key networked resource leaving the organization ?
Right now it’s build on their place in a traditional hierarchy and how many people sit below and above them in the chain. Under a more open operating model that span of influence could be exponential yet completely hidden. Would you really let this person go if you understood how much the larger employee community relied on them ? I seriously doubt you would.
Organizational networking is recognized as a major influence on an employee’s ability to work well in an organization and be successful. In fact, the most successful people in the world possess the capability to influence and shape the opinions of others, which today places greater emphasis on the types of networking a person does. But a strict hierarchical structure doesn't allow for this.
Pfeffer writes that “relationships with bosses still matter for people’s job tenure and opportunities, as do networking skills.” He notes that research shows hierarchies also deliver practical and psychological value, in part by fulfilling deep-seated needs for order and security.
And yet, if you speak to more progressive businesses the attitudes are different. Speaking with Gabe Newell, CEO and Founder at Valve Software, I asked him a few years back on this very topic.
“The simple answer is that hierarchy is good for repeatability and measurability, whereas self-organizing networks are better at invention,” Gabe said, “There are a lot of side effects and consequences. The lack of titles (roles) is primarily an internal signaling tool.”
“The alternate answer is that organizations that think they are hierarchical actually don’t gain advantage by it (they actually have hidden networks), and that the hierarchical appearance is the result of rent-seeking.”
And this is where Pfeffer himself becomes no longer relevant and obsolete. He's always done it this way, always researched the same way. Academia becomes a self-fulfilling prophesy for organizational research, but students crave someone who wants to do things differently. Holacracy for example, is catching on as both an alternative to hierarchy and a supplement, as I wrote recently in Forbes.
And if academia doesn't change, we'll always do it this way. Because we're not educating anyone differently.
