Centralization vs. Decentralization
Historically almost all teams were managed hierarchically. Models like The Great Chain of Being presumed hierarchy was the foundational nature of society, with power always flowing unidirectionally: Child -> wife -> husband -> serf -> lord -> . . . -> king -> God. The presumption of unidirectional power projection became more nuanced with the compartmentalized Ford model during the industrial revolution, which received an additional infusion of innovation with Fredrick Taylor’s scientific management theory. However, a genuine change to the presumption of hierarchy being the presumptive default model for organizational structures did not emerge until 70 years ago with Erik Trist.
Before Erik Trist, “longwall” mining was the norm in coal mines. Longwall mining involves each team performing sequential tasks, with each individual specializing in one thing (one team had to finish before the next could start). Erik Trist noticed some teams of miners in South Yorkshire were using a radically different model in which multi-skilled autonomous groups were organizing organically with minimal supervision and interchanging roles. These teams were vastly more productive than the old model, often able to work 24 hours a day without waiting for other shifts to finish.
Despite findings like these, changes away from strict hierarchical approaches have been glacial. It would be some time before self-managed teams began to gain popularity in the 1970s and through the 1990s. Famous case studies taught in business schools were the primary drivers of this acceptance, with the top among them highlighting self-managed teams in a Volvo plant in Sweden, FedEx, C&S Grocers, and General Mills.
These techniques further evolved and spread with the advent of the internet, giving birth to the concept of “the networked firm.” Autonomous team management evolved further with systematized project management techniques like agile and scrum project management methodologies and open-source online projects.
This in turn has led to all sorts of newfangled approaches like:
- Teal organizations, which attempt to create an environment in which employees can manifest their full personas, rather than just their work personas, and self-manage without a central control in such a way the company naturally evolves over time.
- Podularity, a model based on agile project management in which tasks are broken into small increments.
- Holacracy, a series of flat organizational structures stacked hierarchically.
We’ll briefly explore a few of these, with the caveat that we would not recommend attempting to carbon copy any of these structures but instead regard them as points of inspiration as to how the mold of “default” governance structures can be broken.