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October 1, 2021

A Radical Enterprise: Pioneering the Future of High Performing Organizations

By Matt K. Parker

This post is an excerpt from A Radical Enterprise: Pioneering the Future of High Performing Organizations by Matt K. Parker.


It’s summer 2021. Vaccinations to the COVID-19 virus have already reached a majority of American adults. Summer camps have reopened; schools are preparing for full, in-person enrollment in the fall; and businesses and governments are heralding a “return to normal.” Yet a quick glance at the articles of any major American news outlet paints a troubling picture: 

A study by the Harvard Business School found that over 80% of workers don’t want to go back to the office full time, while a similar study from the global data intelligence company Morning Consult found that 40% of workers would rather quit than go back to the office full time.

Researchers at the global jobs site Monster.com found that “a whopping 95% of workers are considering changing jobs, and 92% are even willing to switch industries to find the right position”—a shift driven, at least in part, by “burnout and lack of growth opportunities.”

In April 2021, nearly four million Americans voluntarily quit their jobs—“the highest monthly number ever reported by the US Bureau of Labor Statistics” according to the Dallas News.

Yet, despite high unemployment, the US is experiencing critical labor shortages, according to the New York Times, with businesses from “the biggest metropolitan areas and from small towns” reporting a “catastrophic inability to hire.”

For the first time in history, a vast cross-section of workers are leaving the workforce en masse, leading the American economy to face an unprecedented crisis of voluntary unemployment that economists have dubbed “The Great Resignation.” 

For some industries, like hospitality, this phenomenon was predictable. As the New York Times reports, unemployment insurance and pandemic relief-benefits often rival the former income of many hospitality workers, like waiters and cooks. Why go back to a job marked by low wages, long hours, and high stress—not to mention dangerous working conditions due to COVID-19—when you can make just as much money staying home, staying safe, and spending more time with your family? Or, as many of these former hospitality workers have done, why not choose to pursue a career in construction, commercial trucking, or even retail, where education requirements are commensurate yet wages are higher? 

But what is perhaps less expected is that many highly paid knowledge workers—like programmers, designers, and product managers—are also quitting their jobs rather than go back to their offices. Although the popular image of the white collar knowledge worker includes high salaries, nine-to-five hours, and cushy benefits, the reality is that even before the pandemic knowledge workers were plagued by long hours and “always on” expectations from managers, leading to high levels of burnout and stress, which has only worsened during the pandemic, according to the Gallup.

At the same time, with their offices closed and their bosses physically removed, knowledge workers have experienced greater autonomy in their jobs and greater flexibility in their lives. Many have chosen to ditch a strict nine-to-five schedule, according to the Gallup report, preferring to shift their hours or spread their work tasks out throughout the day to achieve a better work/life balance (a factor that 83% of millennials rate as their number one consideration in their jobs). Others have taken their laptops into their backyards, to a park bench, or even a beach, allowing them to take advantage of the significant physical and mental health benefits of being outside that scientists have recently validated and quantified, according to a recent study.

Lastly, with less managerial oversight or interference, many knowledge workers have collaborated more freely with their peers (according to Harvard Business Review)—spending less time in large meetings and more time deciding among themselves what to do and how and when to do it.

So, as vaccinations roll out and as exasperated business owners clamor for a return to the office, knowledge workers have begun to ask themselves: “What do I stand to gain by going back—and what do I stand to lose?” 

Dominator Hierarchies

The answer to that question depends primarily on the nature of the organization that they work for. Unfortunately, the majority of them work within an organizational structure that precipitated “The Great Resignation”—a structure that business leaders often hint at through euphemisms like “command and control,” “bureaucracy,” and “Taylorism” but that sociologists baldly refer to as “dominator hierarchies.” 

Dr. Raine Elser—the world renowned social scientist that introduced the concept of dominator hierarchies in her bestselling book The Chalice and the Blade—writes that the dominator model 

organizes relationships at all levels according to a hierarchy of control, status, and privilege. It extends rights and freedoms to those on top and denies them to those on the bottom. Such rankings lead to thinking limited to two dimensions: superior or inferior; dominating or dominated….Both parties live in fear. Those on top fear loss of power and control while those on the bottom perpetually seek to gain it.

A significant corollary of a dominator hierarchy is coercion. As Dr. Elser writes, “behaviors, attitudes, and perceptions that do not conform to dominator norms are systematically discouraged…directly, through personal coercion, and indirectly, through intermittent social shows of force.”

Today, most businesses are characterized by a dominator hierarchy—by a rank ordering of people, with power and resources distributed unequally and concentrated at the top. The judgments of the dominators—the bosses, managers, “leaders,” etc.—are structurally privileged over and above the judgments of the dominated. This power of judgement is conferred upon dominators through subjective and ultimately arbitrary promotion processes. And it is wielded by coercion—by explicit and implicit threats. 

Explicit threats include “Do this or you’re fired,” while implicit threats include modern management techniques like performance evaluations, annual goal setting exercises, pay-for-performance schemes, and performance improvement plans. Thanks to these techniques, your boss can “ask” you to do things with a smile, leaving unstated and implicit the consequences for not doing as you were “asked” to do.

As a method of corporate organization, dominator hierarchies can be traced back to the Industrial Revolution, where attempts to rapidly increase the production of manufactured products led to a system of domination and coercion euphemistically referred to as scientific management, in which workers were reduced to replaceable cogs, or living machines, and made to be ordered about and controlled under strict specifications. 

Although this paradigm is unjustifiable from the standpoint of any humanistic value system, and although it is unnecessary and even disadvantageous with respect to the demands of mass production (as we will see later in this book when we encounter radically collaborative manufacturing methods that enhance both individual well-being and organizational performance), it is at least easy to see why factory owners were so quick to embrace dominator hierarchies. 

Manufacturers were in the business of producing specific quantities of fixed products with precise specifications via purpose-made machinery. With all variables known and relatively unchanging, the coordination of many roles could be fully planned and specified up front and then controlled and optimized like some vast biological machine. Although the results were dehumanizing, the rationale is at least explainable. 

However, this same scheme of sociality loses all semblance of rationality when applied to knowledge work. Unlike manufacturing, knowledge work explicitly and squarely falls within the domain of the unknown. Knowledge workers, like programmers, are solving problems and creating knowledge products for a user base that is fundamentally dynamic; whose needs, wants, and desires are forever shifting in unpredictable ways, and who exist in a rapidly evolving technology landscape that is radically reshaping the way human beings interrelate to each other on a broad social scale.

To take a paradigm of social organization that attempts to optimize output based on static quantities and controlled variables and apply it to a domain that is inherently creative and unpredictable is a recipe for disaster. And yet that is exactly what we have done.

The Great Resignation

“The Great Resignation” is not the transient effect of a new dynamic but the end result of a great malaise that has been gaining momentum over the past century. As the vast majority of knowledge workers have been irrationally corralled into a paradigm of domination and coercion, we have barreled head-first into a striking socioeconomic crisis with dire consequences for individuals and corporations alike, including disengagement, mistrust and meaninglessness.

Disengagement

Engagement at work is defined as a state of mind characterized by “vigor, dedication, and absorption”—clearly something all organizations should strive for. Yet a 2018 global study found that only 16% of workers feel engaged at work. The other 84% feel disengaged—unenthusiastic about the company’s mission, unsupported by their team and their leaders, and unrecognized for their unique talents. 

Even more disconcerting, among those that feel disengaged, 18% are actively disengaged. According to the research and management consulting organization Gallup, “Actively disengaged employees aren’t just unhappy at work—they are resentful that their needs aren’t being met and are acting out their unhappiness. Every day, these workers potentially undermine what their engaged coworkers accomplish.” Gallup estimates the global costs of disengagement at a staggering $7 trillion per year in lost productivity.

Mistrust

Mistrust is rampant in the world. According to the 2021 Edelman Trust Barometer, people mistrust institutions at unprecedented levels. Years of misinformation, a global pandemic, and extreme economic instability have led to a crisis of trust in governments, NGOs, the media, and yes, businesses too. Employee trust in business leaders is at an all time low. In France, for instance, only 22% of people trust their CEO, while in Japan, that number drops to just 18%. And globally, 56% of people feel that “business leaders are purposely trying to mislead people by saying things they know are false or gross exaggerations,” according to Gallup. A lack of trust in the workplace has significant economic consequences, as researchers have found that high-trust workplace environments lead to eleven times more innovation and six times more organizational performance.

Meaninglessness

Most people just don’t find work within a dominator hierarchy meaningful. In fact, the 2018 study “Meaning and Purpose at Work” found that nine out of ten people find their work so meaningless that they would be willing to exchange a whopping 23% of their entire future lifetime earnings for more meaningful work. Since that amount is more than the average worker spends on housing in their lifetime, the authors of the study suggest that it might be time to update the list of human essentials for the twenty-first century to “food, clothing, shelter—and meaningful work.”

Disengagement, mistrust, and meaninglessness are just three of the disaffecting traits of dominator hierarchies, with their attendant economic consequences. But the list goes on. For example, dominator hierarchies lead to high levels of job insecurity among workers—which researchers have found to reduce productivity and to significantly increase the risk of mental and physical health disorders. 

Dominator hierarchies also diminish critical thinking; researchers have found that our ability to ask why and to question the judgments of others is inversely proportional to the amount of domination and authority that we are subjected to. 

And lastly, dominator hierarchies are marked by high levels of employee turnover—a troubling fact given that replacing a worker who quits can, by one conservative estimate, cost twice that worker’s annual salary.

In light of all of this, it’s easy to see why so many knowledge workers have resisted returning to their offices or have quit their jobs altogether now that they’ve glimpsed a new way of working based on trust and autonomy and have gained some measure of control over the what, where, when, and how of their work. Instead of taking a step back to “normal,” they want to take two steps forward toward a radically new way of doing business that gives them the autonomy, trust, and esteem that they need and deserve—and they’re willing to quit their jobs to get there.

Our Dominator Hierarchy Inheritance

I’ll pause here to highlight that the business architectures and dynamics that knowledge workers work in today are, for the most part, inherited. Most business leaders set out to build companies not dominator hierarchies. They are focused on explicit ideas for products and services, not tacit paradigms like domination and coercion. When they wind up structuring their organization as a dominator hierarchy, few of them do so by conscious choice; rather, they’re just “going with the flow.” 

Dominator hierarchies naturally form, and naturally replicate, because for most of us, that’s all we’ve ever known. We have been organizing work this way since at least the Industrial Revolution. It’s the implicit structure taught in almost every business school as the best (and really only) way to organize and manage a business. And yet it has led businesses all over the world to fail to meet the needs of the socioeconomic environments that they inhabit. The disaffecting ills that we now find ourselves immersed in have been coming for a long time—the COVID-19 pandemic simply brought them to a head faster.

It’s also important to note that a great many business leaders are not only aware of the ills that plague their corporations, they’re actively attempting to mitigate them by creating better cultures and governance within their organizations. They are creating programs for diversity, equity, and inclusion; conducting training in psychological safety; inventing practices like blameless post mortems and OKRs (objectives and key results). 

These leaders are doing the very hard and very necessary work to overcome some of the most damaging effects and inequalities that we have all inherited from centuries of domination and coercion. The intent of this book is not to criticize any of these leaders or their efforts. Rather, the intention is to support them by asking all of us, collectively, to take this process one step further. 

So long as we are attempting to mitigate individual disaffection and organizational inefficacy while doing nothing to change the underlying organizational paradigm that these ills stem from, we are addressing symptoms, not causes. It’s like a community trying to clean up a dirty river while doing nothing about the factory that sits upstream pumping waste into it. We can sift debris out of the river all day long but at some point we’re all going to have to wade upstream and figure out how to solve the problem at its source.

Radical Collaboration: Pioneering a New Organizational Future

Thankfully, knowledge workers and business leaders don’t have to start from scratch. Over the past few decades, a small but growing percentage of corporations around the world have pioneered a new way of working founded on partnership and equality instead of domination and coercion. A way of working that is, as Dr. Elser puts it, “based on the principle of linking rather than ranking”—where static dominator hierarchies, managers, and bureaucracies are jettisoned in favor of dynamic, self-managing, self-linking networks of teams. As we’ll see shortly, these organizations feature a radical approach to collaboration, grounded in the intrinsic motivation of the participants and formed through the freely given commitments of peers. For that reason, we’ll refer to these organizations as radically collaborative.

In the book, I will illustrate through stories and research the four imperatives of radically collaborative organizations: 

  • team autonomy, 
  • managerial devolution, 
  • deficiency gratification, and 
  • candid vulnerability.

These are the modern business dynamics that will allow companies of all sizes and across all industries to outperform, out innovate, and out engage the competition in the marketplace.
If you’re reading this book, chances are you have already decided that something needs to change in the relationship between worker and business. You are already aware that if no change is made, the consequences could very well be catastrophic. 

For knowledge workers on the front lines, this seems to be an obvious conclusion. Yet most businesses are balking. The biggest concern is often not how to change but why change at all. Dominator hierarchies, for the most part, seem to be working out well for shareholders (even if not for all the stakeholders). So why risk rocking the fiscal boat? 

I’ll tell you why. Because the boat is already rocking. Radically collaborative organizations aren’t just sitting around playing nice. They’re coming for you. In fact, they’re already here. As we’ll see, they already comprise 8% of the world’s corporations, according to The HOW Report from Legal Research Network—and that number is rapidly growing. They are disrupting industries and captivating customers by outperforming traditional enterprises on practically every economic dimension. 

Three of the largest and most successful, radically collaborative organizations changing the world today are Haier, Morning Star, and Buurtzorg, as you’ll see in the book. 

Data Supporting Radically Collaborative Organizations

Haier, Morning Star, and Buurtzorg are the vanguard for a small but growing contingent of radically collaborative organizations disrupting businesses around the world. 

The 2016 HOW Report studied the sentiments of 16,000 workers across seventeen countries, and found that three classifications of organizations emerged, with one class clearly outperforming the rest.

The first category of organization is referred to as “blind obedience.” Businesses that fall into this category exhibit the most obvious and ruthless forms of dominator hierarchies. Within these organizations, what the boss says goes—or else. 

The second class is called “informed acquiescence.” These businesses are also structured as dominator hierarchies but have softened their overall perception through the adoption of twentieth century “good management” practices like performance evaluations and annual goal exercises. 

The last, smallest, yet highest-performing class of organization is referred to as “self-governing”  (what will be called “radically collaborative” throughout this book). According to the HOW Report, businesses within this category are “purpose-inspired and values based.” They provide their members with freedom from “control, hierarchy, and micromanagement” while providing them with the freedom to “disrupt, speak out, and pursue one’s aspirations.”

The results of radically collaborative organizations are remarkable. According to the HOW Report, a jaw-dropping 97% of radically collaborative organizations are high-performing, compared with 80% and 36% respectively for their “informed acquiescence” and “blind obedience” peers. They out compete their traditional hierarchical competitors on every financial dimension, including year-over-year growth in revenue, market share, and customer satisfaction. As a group, they consistently out innovate the competition and out engage their workforce. They are unburdened by the bureaucratic overhead of their management-bloated peers And their employees are more loyal, more willing to exert effort, and more willing to recommend their organization to others. Radically collaborative organizations are the fastest growing organizational archetype in the world, more than doubling in number between the 2012 and 2016 HOW Reports and currently comprising around 8% of the world’s businesses.

These results are a clarion call for dominator hierarchies. Radically collaborative organizations aren’t just competitive—they’re disruptive. Customers like their products and services better. And employees like their workplaces better. It’s not a question of if radically collaborative organizations will disrupt your hierarchical enterprise, capturing your customers and siphoning away your employees—but when.

In the book, in addition to surveying large organizations, we’ll dive into the histories, structures, and practices of several radically collaborative software organizations. From a self-managing consultancy in Mexico to a radically democratic product company in Switzerland; from an open-source-for-government consultancy in the United States to a prosperity-for-all cryptocurrency spread around the globe. We’ll examine the practices and patterns of software organizations that utilize the power of radical collaboration to unleash individual growth and financial performance. 


Continue reading in A Radical Enterprise: Pioneering the Future of High Performing Organizations by Matt K. Parker, coming February 2022.



- About The Authors
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Matt K. Parker

Matt K. Parker is a writer, speaker, researcher, and third-generation programmer. Over the last two decades, he's played a variety of roles in the software industry, including developer, manager, director, and global head of engineering. He has specialized in hyper-iterative software practices for the last decade, and is currently researching the experience of radically collaborative software makers. He lives in a small village in Connecticut with his wife and three children. You can contact him by visiting mattkparker.com.

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