AUTOMATING HIERARCHY?

Modern information networking technology, if used correctly, can make a 50 person company look like 500. It also works in reverse, you can take a 500 person company and pare it down substantially (although usually not all the way down to the level of a company organized from scratch around automated processes).

I would go even further, in order to gain any meaningful return on the technology investment, you HAVE to radically reduce head count. This isn't merely due to straight forward calculations of profit and productivity (although reason enough by themselves), it's due to the fact that the organization will devolve into a pile of mush if you don't. Simply, with everyone hyper connected/productive the volume of mostly needless interactions will grow exponentially. Soon after the arrival of the technology, the entire organization's decision making capacity will be lost in discussions and white noise -- OODA loops will sputter, spark, and eventually fail. It will also prevent the reorganization necessary for decentralized decision making by super-empowered employees (parallel processing in uncertain environments).

This appears to be exactly what is going on in the US military. While the US military has been investing heavily information networking technology, it hasn't changed its basic organizational structure. Its organizations are still staffed to balloon (via conscription) to fight the large conventional wars of the last century. That means lots and lots of mid to senior level management with nothing to do but generate lots of white noise. To get a glimpse into what this means in practice, please go read Tyler Boudreau's article, "The Internet age comes to the battlefield."

Comments

[Valdis]

Yes, they always reach for their old friend hierarchy -- who does not function as well as he used to... in his day... in his prime...

I wrote about a similar bad choice of "more hierarchy" in this piece:

http://www.orgnet.com/orgchart.html

In fluid, chaotic conditions, that require adaptation -- not recipes -- we have found that organizations with "high awareness" [both inside and outside the organization] adapt and perform better than organizations that do not have this awareness. Awareness is a function of the human network structure present to process information, receive and process feedback, and support cycles of learning.

Hierarchies are efficient [good for some org processes, i.e. accounting and control] but they are not agile and adaptive. Hierarchies deal well with a predictable world, but get in the way during chaos and rapid change -- the unknown and the unpredictable.

Hierarchies are also the least resilient of all network types.

[EN]

Not to be the turd in the punch bowl here, but technology's soul purpose in the mind of senior civilian and military leaders is to have one man making the decisions. And if anyone who reads here thinks there's a chance in hell of reducing staffs you should also ask the next president to promise poopless ponies for everyone.

[deichmans]

Nice observation about the early impact on org structure of new technology. Glad to see Prof. Krebs sound off too -- he's forgotten more about network analytics than most of us will ever know! :-)