(Via Brad Feld). Tom Evslin writes about The Flattening of Almost Everything in organisations. Tom writes, "We used to need hierarchies because we had only primitive communication and information processing capability. Computers,electronic communication, and particularly the Internet have made it possible to flatten almost everything. Flat organizations, are necessary to deal with accelerating change.Large organization used to need to be hierarchical in order to accomplish the dissemination of orders and the collection of information. The more people there were at the base of any organization, the more levels of hierarchy were needed". In today's age even conventional communication like school sending to parensts can be done through school’s web site or an RSS feed or a mass email or a mass text message on their cell phones (or the kids’ cell phones) or something like that.
The Key issue as Tom sees is that hierarchy had plenty of drawbacks. Excessively hierarchical authority usually evolves with hierarchical command flow. Each layer in the hierarchy distorts directions and information going down and filters information and questions going up.A defective node can unleash catastrophe or make the communication ineffective.Horizontal communication outside of a local group is nearly impossible in an hierarchical organization because that communication needs to flow up and down the chain of command. Technology ensures that we do not need to be dependent on hierarchies for information anymore. Information flow generally follows the hierarchy and could be impeding. Tom argues, The frequency of disruptive technical change is increasing. Markets and competition are also changing rapidly. Flat organizations with non-hierarchical information flow are better able to survive or even thrive on change. Direct communication between individuals is both quicker and more accurate than nodal information flow.There is inevitable confusion of purpose between protecting the hierarchy and protecting the organization. Tom concludes by saying, to say that change is a constant is a gross understatement. Change is a fractal that only the flattest possible organizations with the best information flow can deal with. In a related posting, Tom writes on Complex Ecosystems and the End of the Dinosaurs saying the the dinosaurs disappeared as they were too successful for too long. Disruptive mechanisms like technology tests the strength of any ecosystem and the reality is the more complex and perfectly adapted the ecosystem was to the former environment, the more difficult it will be for it to adapt to the new environment. It isn’t just individual businesses that were threatened by steam power, by the railroads, by the automobile, the semiconductor, software, the Internet, whatever – it’s entire business ecosystems!
It happened to the hand-loom ecosystem, to the horse ecosystem, to the monolithic computer ecosystem, and to the old telecommunications ecosystem. It wasn’t just phone companies which defaulted on massive amounts of debt, laid off hundreds of thousands of workers, and erased zillions in stock market value; the same thing happened to the manufacturers who supplied the service companies. The unions which supplied the workers are shadow of their former powerful selves.Any successful business MUST adapt to the ecosystem which exists or is forming – at the time. The pace of technological change – unlike the frequency of comet crashes – is increasing exponentially. Disruptive technologies like once in every couple of centuries earlier- but nowthey happen every couple of years. And the only thing which is predictable is the certainty that there WILL be a technology that disrupts whatever you earn your living at. You can predict that something will happen but you can’t predict what. Tom concludes brilliantly by saying that the only guidance that can be given is the gamblers adage "you gotta know when to hold ‘em and know when to fold ‘em." It also turns out that some generalized skills like curiosity, perseverance, and the ability to work hard are useful in moving from one ecosystem to its successor.
Brilliant Tom -disruprive technologies,processes and globalisation unleash a new wave of competition that had been unimagined in the past - every decade the fortune 100 list see churns - newer line of business, fresh business models, better marketcaps for more innovative and dynamic companies, easier flow of capital and global capital availability, changing demographics,rising asia all are interlocked to bring in a new sense of heightened competition - as Tom Peters says often -"Its not your father's world anymore" and the idea behind Jack Welch's famous statement -"The rate of change inside an organisation should always be greater than the rate of change in the ecosystem that it thrives on to remain successful" is becoming more and more relevant and true.