Thursday, November 12, 2009

The Death of Middle Management

Networking is nothing new. It has helped human beings cooperate, collaborate and coordinate since time immemorial. And it has helped individuals rise above their own capabilities and extend their personal influence. However, social media is now significantly altering the nature of power within networks.

In the days before social media an individual's power within a hierarchical network was largely based on their position to moderate privileged information and give instructions. And although this has not gone away entirely, the power of social media to rapidly spread information is freeing up the information and eroding this power. In addition, the information sources are becoming more traceable and it is becoming harder for people to claim or limit the ideas of those further down the food chain – or indeed, information to be hidden from management – since the "conversations" are opening up in the online space for all to see. This is leading to what we are calling The Death of Middle Management.

The new power leverage comes from being recognized as generous thought leaders, who "gift" value to the network. In addition, we will also gain credibility and influence by our ability to rapidly gather and compile relevant information for the task at hand. And a large part of this ability comes form being able to obtain information directly from your networks. This is the reason why Zipipop's CEO Helene Auramo sometimes calls Twitter "People Google" – since you can have questions answered by real people in your network.

The new networked economy requires that we find existing or, even better, growing networks to which we can connect with: "As the number of nodes in a network increases arithmetically the value of the network increases exponentially. Adding a few more members can dramatically increase the value for all members." (Kevin Kelly, 1999). This effect can be seen in the success of Facebook, LinkedIn and Twitter; however, it also applies to business in general and to our personal ability to influence.

"In the network economy, success is self-reinforcing; it obeys the law of increasing returns. The great innovation of Silicon Valley is not the wowie-zowie hardware and software it has invented. Silicon Valley's greatest "product" is the social organization of its companies, and most important, the tangled web of former jobs, intimate colleagues, information leakage from one firm to the next, rapid company life cycles, and agile email culture. This social web, suffused into the warm hardware of jelly bean chips and copper neurons, creates a network economy."

The beauty is that network effects can raise the boat for everybody.


Tarja said...

There are some really good ideas. Especially the new form of social power is an interesting concept to study. I also like the idea of the site, looking forwards to seeing it live.

What I was wondering is the concept of The Death of the Middle Management. While there are lots of people with lots of ideas in the employee level: how long is the executive level really going to listen to the overflow of ideas? Executives will not have the means to listen to all of the ideas, especially when most of the ideas are not usually practical or implementable.

This is a question of quality, and someone has to take the role of the gateway. I'm worried that executives will close their doors and when no one is picking up the good ideas for them, even the good ideas go to vaste. If the middle management is left out of the communication flow the organization is in real danger.

Someone has to manage the flow. If not the middle management, then who?

Richard said...

Very good points and to be fair the middle managers as we know them are not going to disappear over night. However, I predict that gradually their roles will either start to become more focused, such as project management, or they will become specialized and cross-organizational – such as the new role for overseeing collaboration activities and social media management in the form of the Community Manager.

In addition, there is more and more evidence showing how rule-based collaborative systems can be incredibly self-organizing. Wikipedia is the most well know version but relies on a massive user-base – so it would be difficult to replicate within a normal organization. However, Stack Overflow is a very impressive example of a self-managing system that works on a smaller scale.

If you can provide the right social incentives, particularly a sense of audience and feedback, it can often be more motivating than traditional sticks and carrots.

And I have started some research into how social media principles can finally be used to unlock some aspects of Flow that were not really possible before. And the first concept we are working on involves a collaborative task management system – which, if designed properly, will only need a minimal amount of managing.