Management fads come and go. Core Competency, Value Chains, Reinvention and others have all had their day in the sun. Each had its merits and demerits, became overhyped and left us disillusioned until we found new promise in the next management craze.
Through it all, executives of every generation and industry have to manage and motivate their people, which is easier said than done. After all, control is an illusion. Good managers know that lunatics run the asylum and that their job is to help them run it right.
As the organisation grows, it becomes a whole lot tougher. There’s less personal interaction, more formality and it becomes hard to maintain passion and purpose. Fortunately, increasing scale doesn’t have to result in a loss of momentum, but it does require less reliance on organisation charts and a new focus on informal relationships.
The Dunbar Dilemma
In 1992, anthropologist Robin Dunbar published his groundbreaking paper on optimal group sizes. For humans, he estimated the maximum group size that can maintain stable relationships to be about 150, now known as the Dunbar Number.
I’ve noticed the same phenomenon in managing organisations. Go past a certain point and natural connections start to break down. Much like Dunbar predicts, in my experience that number does seem to be somewhere in the range of 150-200 employees.
That’s when the “really cool place” with a “family atmosphere” starts to take on a decidedly more corporate feel. Some of the changes are positive; things become more structured and less off-the-cuff. Nevertheless the loss of connectivity is palpable and work begins to feel more institutional and less passionate.
The biggest danger at this point is that the breakdown is hard for senior management to see. They have usually worked together for years, feel a special camaraderie and find it difficult to understand how others don’t feel the same way. In fact, they are offended that newer arrivals don’t share their sense of commitment and purpose.
The Reorganization Trap
Before long, senior management comes to the realisation that something must be done. Unfortunately, what usually comes next is a massive reorganization designed to “break down silos” and improve communication.
Both are red herrings. Silos are as inevitable as they are useful. They group people according to function, geography and expertise. Communication, for its part, has little to do with how an enterprise is organised, but how people within it communicate and interact.
Valdis Krebs, who researches organizational networks, notes that reorganizations fail to take into account informal relationships. These are often invisible to company leadership, they are not recorded in any company handbook, but are embedded in everyday practice. When these ties are broken, chaos can ensue.
If we are to build more effective, adaptive organisations, we need to focus on how social networks really grow, not through merely adding people, but through building internal linkages organically.
In the Arab Spring, it quickly became clear that the immense power of the state and even the cunning guile of the Muslim Brotherhood were no match for the viral power of the protestors. In Ukraine’s Orange Revolution, I found much the same. The power rested not with the politicians or even the billionaire Oligarchs, but in the tent cities.
While those movements grew in extreme environments, there are a number of ways we can improve connectivity in more prosaic organisations:
Internal Training Programs: Developing a general training program for incoming employees does more than just build skills, it creates common bonds among people who will be doing vastly different jobs. These bonds will remain even after they’ve taken permanent positions in far-flung areas of the enterprise.
Moreover, having mid and senior employees lead the training encourages mentoring relationships that are independent of the organizational structure, building connectivity across not just functional divisions, but generational ones as well.
Best Practice Programs: In similar vein, best practice programs can provide benefits far beyond their informational value. Setting up a monthly meeting for people to present work they are proud of also gives them the chance to meet, discuss issues of merit and build collaborative relationships.
Cross-Pollination: Many successful corporations, such as General Electric and Procter and Gamble strongly encourage employees to develop their careers in a variety of geographical and functional areas. GE’s Jeffrey Immelt, for example, held roles in the plastics, appliance and healthcare businesses before becoming CEO.
In truth, it only takes about six months for a talented person to learn the basics of a new role and two years to attain some level of mastery. There’s no reason for employees to spend an entire career working their way up a linear path. Business no longer fits into nice little boxes anymore, people shouldn’t be expected to either.
Promote For Network: One thing that Valdis Krebs has noted in his work with corporations is that there has been a subtle shift toward taking relationships, both internal and external, into account when considering promotions. Those who have fostered ties across the organisation are favoured for advancement, rather than merely those who work on the biggest accounts.
Physical Architecture: Innovative organisations ranging from Bell Labs to Pixar to IDEO set up work spaces to encourage random collisions. When designing the new Apple campus, Steve jobs went to great effort and expense to build a structure that could not only house all 13,000 employees, but is also centered around a courtyard where people are bound to collide.
When Alfred Sloan created the modern corporation at General Motors in the early 20th century, what he really did was create a new type of organisation. It had centralized management, far flung divisions and was exponentially more efficient at moving around men and material than anything that had come before.
Yet today, we operate in a semantic economy, where the object of enterprise is not to organise work as much as it is to focus passion and purpose. Moving ideas is more important than moving things. Therefore, we need to manage and monitor informal relationships as earnestly as we used to pay homage to organisation charts.
Firms like Krebs’ Orgnet focus specifically on social network analysis for organisations and there is an increasing awareness in HR circles about the importance of hidden linkages. However, monitoring can only get you so far. Informal networks need to be nurtured and encouraged.
The new management imperative is not only to motivate employees, but also to foster the ties that bind them.
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