Why Your Company Would Never Have Built eBay, Part 2By Daniel Debow on December 9, 2010 in Thought Leadership
The Lattice VS. The Ladder
The idea that transparency builds trust has spawned an entirely new form of communication in the workplace. It is a mode that is bottom-up rather than top-down; democratic, rather than authoritarian, and self-policing rather than punitive.
Where once there was a corporate ladder, which defined status, compensation, access to information, and success as a linear climb to the top, today we have a corporate lattice — a model that let’s people to share ideas, innovate, and spread knowledge throughout an organization, regardless of where they fall on the corporate ladder.
In a recent Wall Street Journal article, Alan Murray suggests we’ve reached the end of traditional management structures. “In recent years,” he writes, “most of the greatest management stories have been not triumphs of the corporation, but triumphs over the corporation… The best corporate managers have become, in a sense, enemies of the corporation.”
The reason for this shift, Murray writes, is that bureaucracies are by their very definition resistant to change. “They were designed and tasked, not with reinforcing market forces, but with supplanting and even resisting the market.”
Under Jack Welch, GE grew to be one of the most profitable and valuable companies in the world by constantly revamping and re-imagining their corporate culture.
Netflix, meanwhile, has grown into a $1.6 billion company in a little over a decade. Both CEO Reed Hastings and talent chief Patty McCord have emphasized an openness to new ideas and a willingness to change. “Great workplace is Stunning Colleagues,” Hastings wrote in a recent presentation. “Not day care, espresso, sushi lunches, nice offices, or big compensation.”
Yet even as businesses begin to recognize the value of transparency, they continue to manage their people much as they did 50 years ago. In a rapidly changing universe, most corporate structures remain unchanged. As a result, feedback and communication between management and employees remains artificial and constricted, rather than open and organic.
The rapid innovation companies need to survive can only come by building a culture of change into their very DNA, in the process transforming their businesses into free flowing social networks.
Photo of ladder by Biscarotte. Licensed under CC.