The World Bank estimates the size of the global workforce at about 3.5 billion people, and by no means would I expect, much less advocate, that those who are employed today will transition into a management-free structure in the near or even medium term. The vast majority of work involving human labour is still best carried out in a traditional organisational structure.
In a world of VUCA (volatility, uncertainty, complexity and ambiguity), it is the tech unicorns that will be the early adopters of a post-hierarchical model. In fact, some have already embraced it. Today’s competitive landscape is defined by one word: disruption. The ideas of incremental progress, continuous improvement, and process optimizations just don’t cut the mustard anymore; those practices are necessary, but insufficient. It is now impossible to build enduring success without “intrapreneurship” - creating new ideas from within an organisation.
The organisational dilemmas faced by ambitious disruptors are best exemplified by Netflix. Their human resources guru, Patty McCord, identified a problem that appears obvious in retrospect: as businesses grow, so does their complexity. But that comes at a cost of shrinking talent density: the proportion of high-performers within an organistion.
The slide deck she developed with the CEO of Netflix, Reed Hastings, went viral, and Sheryl Sandberg referred to it as possibly the most important document to come out of Silicon Valley. That said, Patty McCord did not earn her accolades by identifying problems. What captivated everyone’s imagination were the unorthodox solutions that she offered: “Over the years we learned that if we asked people to rely on logic and common sense instead of on formal policies, most of the time we would get better results, and at lower cost.”
The commentary on Netflix’s corporate culture often focuses on its concrete HR policies, such as self-allotted vacations, and the absence of travel expense reports. But these are just derivatives of a larger vision: high business complexity need not be managed with standard processes and ever-growing rulebook. Patty McCord advocated the exact opposite: limit the tyranny of procedures, bring on board high-performers, and let them self-manage in an environment of maximum flexibility.
Today, we define management as the process of dealing with or controlling things or people. And if this is not a red flag to a CEO running anything other than a widget factory, I don’t know what is. Controlling things no longer appears plausible, and controlling people is downright counterproductive. Steve Jobs hit the nail on the head when he said: “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.”