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«The more power you give to an individual deal with the complexity and uncertainty, more likely to make bad decisions. As a result, today there are very good reasons for companies to try to think beyond the hierarchy. »

James Surowiecki – Wisdom of Crowds

Here we are again, entering the Age of Collaboration, surrounded by an ocean of information that anyone can handle, creating such complex interrelationships that can hardly manage, and trying to keep up with a reality that every day becomes more transparent , participatory and global. This is no longer a world of things, but a world of conversations.

Today we reflect on the impact of mass collaboration in our organizations and in very unique way, models and key organizational structures that humans use to create and do things collectively.

As we have explained in previous talks, the new era poses particularly complex challenges; challenges traditional organizations are unable to solve. And this is largely because organizations have built are based on a hierarchical model that ignores both the demands and the current possibilities of collaboration.

Finally we have realized that we need to build new, more open, participatory and transparent organizations; organizations that allow us to work together for a collective response-the only possibly to new challenges. But we still need to answer some fundamental questions: What kind of structure should have these new organizations ?, this new structure will replace the current hierarchical model ?, How do we resolve the conflict between personal freedom and autonomy requirements and organizational needs prediction and control ?.

To answer these questions I would like to propose the concept of netarchy, which defines the emerging new order in collaborative organizations. It is a virtually unprecedented term, which so far does not appear in the results pages of Google, but I think it reflects very well the organizational structure can be found in the new networks of collaboration, based on the added value of people, authenticity and the trust. For example, in the communities of free software.

Words are important and, obviously, we need new words to represent the new reality. So I propose that we use the concept redarquía to better understand how it affects the Age of Collaboration our organizations, and to explain how to manage new collaborative processes of value creation. This new concept will also help us better understand the news every day are in the media, and talking about a change of power and authority in our organizations.

In this conversation we will try to explain how this new «redárquica» structure aims to fill the gaps of a hierarchical model, however, will not disappear, but will continue operating to reflect the structure of delegation of authority in organizations, and to preserve the responsibility, decisiveness and accountability.

The hierarchy as the starting point

We all know the concept of hierarchy, and are familiar with it. According to Wikipedia, the hierarchy is the «order of items in a series by value» and «can be applied to people, animals or things.» Entering the context of organizations, we can tune well over our definition: the concept of hierarchy is used to designate the chain of command that begins with the top managers and continues even non-managers workers, passing successively by all levels of the organizational structure.

Therefore, the hierarchy is based on a chain of command order. Through the hierarchy of formal authority relationships between superiors and subordinates they are set, and organizational structure of any organism is defined.

If you think about it, to build the current hierarchical organizations have modeled existing structures, very singularly the army. It is not surprising, since hierarchies, as we understand them today, emerged to solve two key problems of the Industrial Age: efficiency and scalability. Mass production required an army of workers who ordered faithfully fulfilled the orders of their superiors.

But time does not pass in vain, and the circumstances around us have changed. Trouble efficiency and scalability were key to the emergence of jerárquicas- organizations at the time they are no longer central, and have been replaced by new values like cooperation, commitment, transparency, creativity and innovation.

With everything and that, the main problem that we face is that these hierarchical organizations have finished turned into real power organizations. In theory, this power is aligned with the real interests of the organization; that is, the power acts for the good of all. But as institutions have become more complex and opaque, that power has ceased to serve the interests of the organization and, in many cases, has become almost exclusively obey to the personal interests of a ruling caste, as we can see every day through the media.

The need for a new order

I sincerely believe that the mental models that sustain our organizations today are going in the wrong direction. We are not helping to create value. The more we cling to traditional hierarchies, the more we move away from the enormous possibilities offered by the new era of collaboration to create agile and flexible organizations, where we can give the best of ourselves and create economic and social value sustainably.

The fact is that we can not frame the current situation using traditional hierarchical structures, simply because they are pieces that do not fit. Nor can we continue to work on implementing solutions that although they were appropriate at the time, came to solve problems that are no longer core to move forward. The new spaces of communication -the blogs, wikis and social networks are having a real impact on working environments, processes and structure of our organizations. The new generation of Digital Natives learn, process information, innovate, collaborate and do things substantially different from previous generations. Joining our organizations will, undoubtedly profound implications in so far as generate new ways of working and creating value. It is clear, therefore, that we need a new order to meet these new challenges.

Hierarchy and Netarchy

The nest is an imposed order (top to bottom) that establishes the relationships of authority and formal power between superiors and subordinates within traditional organizations. The netarchy, however, is an emerging order (bottom-up) arising as a result of the relations of participation and activity streams generated in collaborative environments.

The netarchy therefore provides an alternative order in organizations. An order is not necessarily based on the power and authority of the formal hierarchy, but in the relations of participation and activity streams that naturally arise in collaborative networks, based on the added value of people, authenticity and trust.

The mere fact collaborate and share as equals generates interactions, proposals and innovative solutions, and allows the transfer activity, naturally, to the nodes that actually creates value for the organization. In other words, the decision does not descend from above, cascading, but emerges from below, the result of partnerships.

The hierarchy has a markedly unidirectional nature: relations occur between two agents, but one of them-the top- asserts its power to impose its vision on the other-the subordinate. In the netarchy, however, relationships are multidirectional, as in a network: the agents relate with others in an open one, and the work is done in a distributed manner, taking advantage of the connections between the different nodes of value generation .

The essential thing is to understand that the hierarchy is based on an order of imposed power, and that the netarchy is based on an emerging order of cooperation; the first one is based on dependency relations and orders in which the upper manages resources, while the second is based on conversations; the hierarchy, in short, is based on rewards and punishments, and netarchy is based on the recognition and esteem of its members.

The netarchy is the structure conducive to solving the complex problems we face, because it is able to approach the problem from a global perspective, in which all actors involved are part of the problem to the same extent that we are part of the solution.

This model assumes that the solution will not come down from heaven, not from the top of the pyramid where the powerful leader is. Quite the contrary. It is collaboration on open networks of all actors that generates new interactions, which brings out all the proposals, and that, ultimately, enables the solution naturally emerges from the bottom up.

Properties of netarchy structures

These, then, the properties that define and characterize the netarchy structures:

– Collaboration. Collaboration is the most powerful way to create value. -the New technology platform allows us to build web 2.0- collective intelligence. Everyone can participate on a voluntary basis, on an equal footing, creating and sharing from anywhere, in a collaborative and global, in trust-based networks.

– Self-management. Each agent has autonomy to make their own decisions, and to manage its contribution to the common interest. The coordination is done by mutual adaptation, commitment and collaboration. The netarchy structure makes it possible that autonomy and control are not antagonistic terms -such as assumed- but compatible and complementary, necessary in the evolution of our organizational concepts.

– Transparency. The transparency of information is the key ingredient, the real key to the emergence of netarchy order. All elements that are part of the network know the contribution of each of the members. The transparency value is the most direct path to achieving the shared objectives.

– Emergency. The solutions are not the result of planned actions from the top of the organization, but emerge naturally from the bottom up, the result of the action of local pioneering efforts and interaction in open networks. Information sharing and collaborative learning network produces a multiplier effect: the individual efforts apparently irrelevant-at various points in the network, arise suddenly very significant changes and innovative solutions to complex challenges facing the organization .

– Consistency. The transparency of networked conversations allows us to maintain consistency and continuity between the vision, mission and values of the organization, always with the commitment put into action. As a self-referenced systems, netarchy structures adapt to the changing environment while maintaining its identity and values. It is what is known as autopoiesis.

– Participation. Leadership and innovation is a task that must be shared by all. All agents contribute in a netarchy. The creation process is participatory, so we can say that the sense of belonging and commitment to action is higher in netarchy organizations.

– Interdependence. All points of the network are connected. What happens in one point of the network affects all other parts of the network. Hence the netarchies structures are aware of social, economic, medioambientales- problems affecting the world as a whole.

– Openess. Unlike hierarchies, netarchies are open structures able to self-organize according to the task. Precisely one of the fundamental properties of open systems is not seeking stability, but the interaction with the environment, so they need a certain degree of imbalance to change and grow.

– Adaptability. Based on feedback or feedback, the netarchy structure is able to adapt continuously, in real time, to a constantly changing environment. Facing the millimeter planning, and «we have always done well here,» the «make it happen» is imposed, the «less is more» common sense and the ability to change quickly to adapt to new needs and new societal challenges.
– Freedom. The greater the degree of freedom, the greater the stability of the organization. We create a netarchy order when instead of hiding the inherent conflicts and contradictions all human relationships, encourage the freedom to express them. With no central control prohibiting local small and constant changes, the structure of the organization allows many levels of autonomy, and contribute to preserve their global stability.

– Trust. There is not netarchy, collaboration and cooperation without trust. In the Age of Collaboration, an organization can only be truly competitive when makes the most of new ways of doing, and new models of collaboration that offers social technologies and this is only possible within a culture of trust, confidence it is essential to generate productive interactions between people and between organizations.

– Learning. Collective learning is a fundamental capability of netarchy structures. To take this step, organizations should encourage courageous conversations, assuming that these talks are a way of learning themselves; They should recognize the mental models that reside behind individual positions; and should facilitate the search and continuous experimentation with new forms, mental models and tools to address future challenges.

Netarchy vs hierarchy complementary structures

It is very important to understand that the emerging new order will not destroy hierarchies. Simply go to complete and improve them, making them more transparent and effective, providing them with necessary to maximize the possibilities of collaboration tools, and providing a system capable of solving complex problems.

It is not, therefore, two exclusive models but of two complementary structures. In fact, hierarchies remain fundamental in organizations when establishing the link between alignment, empowerment and «accountability». That is because there is no clear decision-making and accountability, can always be taken collectively.

The netarchy order therefore not intended to supplant the power structure and the traditional hierarchical organizations. The netarchy itself is inconsistent, however, with the personalistic and arbitrary use of power, and the use that many people have made hierarchy and bureaucracy for its own benefit.

These abuses destroy value in our organizations. Create unfair organizations and demotivate people. In fact, I think most of the conflicts between netarchy and hierarchy arise in the line that separates those who want to preserve the privileges and power of the bureaucratic class of those who aspire to build a less power-oriented, more just, equitable and sustainable.

This is the real border between neatchy and hierarchy. Which side are you on?