Most of us are familiar with the last three lines of Robert Frost’s classic poem, “The Road Not Taken”:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.
As we move from the first wave of the Digital Revolution, whose primary force has been the rapid growth of the Internet, into the second wave, which will amplify the network effects of the Internet of Things (IoT) and artificial intelligence (AI), we will be faced with an existential choice about how we organize our societies that may very well determine whether we will live in the most authoritarian centralized social structures the world has ever known or whether we create a highly evolved human society by embracing a very different way to design how we socially organize ourselves. This choice will be consequential because it will very likely shape the course of human social organization for decades, if not centuries. Whether we morph into an advanced form of totalitarianism or evolve into the higher reaches of human nature will depend, metaphorically, upon whether or not we choose to travel on a road, which up to this point, has been less traveled.
The Dominant Model
Since the days of the Roman Empire, the near universal form of social organization has been the centralized top-down hierarchy. From tribes to monarchies to bureaucracies, power has belonged to those who are in charge. Whether a chief, a king, or a CEO, what each has in common is the wherewithal to direct and control the activities of those in their charge. And if their directives are not followed, the consequences can be quite serious, sometimes resulting in loss of reputation, status, job, finances, freedom, or in some cases, even life.
Social organizations need structure, and it seems that, whether they like it or not, most people tolerate hierarchical life because they accept that someone needs to be in charge for things to get done. Accordingly, the hierarchical organization has been the metaphorical road that has been well traveled. This is true even in democracies, where often unelected and unaccountable bureaucrats can use the hierarchical power of the administrative state to command and control the activities of everyday citizens, as we’ve recently experienced with the various forms of authoritarian mandates imposed on previously free societies in response to the recent Covid-19 pandemic. If we’ve learned anything from Covid-19, it’s how quickly hierarchically-minded leaders prove Lord Acton’s insightful observation correct: “Power tends to corrupt and absolute power corrupts absolutely.”
The problem with centralized hierarchical structures is that they are built around a set of values that makes them highly vulnerable to corruption. In designing social systems, leaders need to make a series of structural value preferences among five pairs of paradoxical values:
- Collective Intelligence vs. Elite Intelligence
- Collaborative Power vs. Coercive Power
- Iterative Discovery vs. Central Planning
- Diversity of Opinion vs. Ideological Conformity
- Agreement vs. Compliance
In approaching these preferences, it’s important to note that these are not either/or choices. Instead, leaders are looking to strike a balance between the two paradoxical values with a clear preference for one value over the other. To understand how these preferences work, let’s borrow an analogy from the field of psychology.
One of the most insightful contributions to the understanding of human development is Erik Erikson’s Stages of Psychosocial Development, which postulates that individuals, over the course of their lives, move through a progression of eight psychosocial stages to reach their full development. The essential work of each stage is the resolution of the tension between two paradoxical values. So, for example, in the first stage an individual needs to balance the two values of Basic Trust vs. Basic Mistrust. While it is obvious that trust is the preferred value in developing a healthy personality, there are times where mistrust is appropriate. Thus, the healthy person develops a sense of both trust and mistrust, but not necessarily in equal parts. In striking a balance between the two values, the psychologically fit have a clear preference for trust over mistrust. While they usually lead with trust, they are savvy enough to know when to mistrust. The unhealthy personality, on the other hand, leads with mistrust, making it difficult to build healthy relationships.
The dynamics of this psychological model are comparable to the development of social systems, except that all the preferences are built into the initial systems design rather than in a series of stages. However, similar to Erikson’s model, the value choices are not equivalent when it comes to building a healthy system.
Throughout the history of human civilization, public and private enterprises have clearly preferred the structural values listed above on the right over those on the left, which explains why the vast majority of organizations are designed as hierarchical bureaucracies. These top down structures assume that the smartest organizations are the ones that can effectively leverage the intelligence of their smartest individuals. Accordingly, strategy is the responsibility of the elite few, which is discerned through central planning and executed by giving leaders command-and-control authority to make sure that people follow the directives of those in charge. These preferences became so enculturated throughout the twentieth century with the proliferation of bureaucracies that both business and governmental leaders continue to assume that the top-down centralized hierarchy is the only way that large organizations can be managed and that there are no alternatives.
This is problematic because hierarchies have an inherent flaw that plagues the vast majority of bureaucracies. By leveraging the individual intelligence of the elite few, bureaucracies blindly amplify the innate unconscious biases of the supposed experts. This blindness is a product of the fundamental design principle that shapes the top-down hierarchical organizational model: trust authority.
When people are expected to do what they’re told and not challenge the experts, it is easy to see why the elite so easily embrace central planning, exercise coercive power, consider those at the bottom of the hierarchy to be less intelligent, dismiss differing perspectives as misinformation, and demand ideological conformity and compliance.
The exercise of coercive power is particularly problematic because, when power does corrupt, leaders become incredibly obsessed with control. Accordingly, they are myopically focused on controlling information and controlling people. In fact, to the hierarchically minded, management and control are often synonymous.
However, this notion that management equals control is a choice and not a given. There is another way—a road not taken, if you will—where leaders build social systems with a clear preference for the structural values listed on the left over those on the right. And when they chose this different set of values, they are more likely to create highly evolved and more healthy human enterprises.
Defying Conventional Wisdom
In the early 1990’s, Chris Rufer founded Morning Star, a tomato processing company based in California. In designing how his new organization would work, Rufer made a choice to think differently and design a company where there would be no bosses and where work would be self-organized by the employees. At the time, the idea that you could build a successful enterprise where there are no bosses would have been considered business insanity. After all, how would anything get done if no one is in charge? The notion that employees could effectively self-organize work defied all conventional wisdom on how to build a successful enterprise. But Chris Rufer is not a conventional businessman. So, when he decided to start Morning Star, he structured his company on two core ideas: No single person should have the authority to coerce another person, and all individuals should keep their commitments to the company mission.
With these two principles in mind, Rufer designed his organization as a peer-to-peer network where individual workers negotiate specific commitments with their colleagues and measure the status of these commitments on a bi-weekly basis. The linchpin for this unconventional approach to managing a complex organization is a rubric known as the Colleague Letter of Understanding (CLOU).
Before the beginning of each business year, colleagues in the various business units of the tomato processor gather to discuss business strategy for the upcoming year. Following these strategic sessions, each worker negotiates a CLOU with the colleagues he or she works with or services most directly. Typically, a worker negotiates with about ten colleagues, and a completed CLOU can list up to thirty specific deliverables with relevant performance metrics. The negotiation and the documented agreement of measurable deliverables form the basis of the shared understanding that directs the coordination of the individual efforts of each of the workers. By holding colleagues accountable to each other rather than to supervisors, Morning Star creates a highly collaborative environment in which everyone effectively becomes each other’s customer.
Throughout the year, detailed business information is updated twice a month and made available to all employees so they can track the metrics in their own and their colleagues’ CLOUs. The transparency of critical financial and operational data is essential for self-organization to work well. Unless people have real-time access to data throughout the year, negotiating CLOUs runs the risk of becoming nothing more than an empty exercise. With the data, CLOUs can be a lever that drives extraordinary business performance. It turns out you can get a lot done when no one is in charge. Today, Morning Star has grown into the world’s largest tomato processor, with 400 full-time colleagues and 2,000 part-time workers during the summer harvest season.
In designing Morning Star’s organizational system, Rufer demonstrated a clear preference for the structural values listed on the left over those on the right, and in so doing, embraced the fundamental design principle that propels the peer-to-peer network model: nobody is smarter than everybody.
Accordingly, Morning Star’s organizational model leverages the collective intelligence of all the workers by giving them the ability to be fully involved and make their own decisions through a negotiation process that respects diversity of opinion and honors all voices without censorship or fear of retaliation. No one has the coercive power to silence or dominate another person.
There is no such thing as insubordination in a peer-to-peer network because the goal of Morning Star’s management model is not compliance, but rather agreement freely made by each and every worker. What is most fascinating about Morning Star’s social structure is how it completely revolutionizes how power works by shifting the basis of power from coercion to collaboration. This shift is game-changing because it enables the possibility for building a more healthy human system that is far more intelligent and powerful than its hierarchical counterparts.
Because few of us have ever had the opportunity to be part of a social organization that is designed as a peer-to-peer network, most of us are unfamiliar with the radically different world of collaborative power. We may have difficulty conceiving how we could build practical social systems where no one has the power to coerce other people. But our unfamiliarity does not mean that this radically different social structure is not possible. While collaborative power may be the road less travelled, Morning Star is not alone in designing a highly effective organization designed around the foundational principle that nobody is smarter than everybody.
W. L. Gore and Associates, the makers of Gore-Tex, founded in 1958 by Bill Gore, is a 10,000 person company in thirty countries around the world that has leveraged collective intelligence and collaborative power to grow into a three billion dollar enterprise, making a profit every year that it has marketed its products. At Gore, all work is accepted rather than assigned because there are no bosses. And without bosses, there’s no opportunity for coercive power. For well over sixty years, Gore has successfully relied upon collaborative power to get things done.
Another organization that leverages collaborative power is Buurtzorg, which provides home health services in the Netherlands. Founded in 2006 by Jos de Blok, Buurtzorg employs fifteen thousand nurses and domestic helpers who are organized into a network of twelve hundred self-managing teams. Each of the teams is responsible for making its own decisions for finding patients, securing office space, scheduling staff, managing budgets, and recruiting new team members. Everyone on the teams has an equal voice in crafting the mutual agreements that guide the coordinated activities of the team members. Buurtzorg’s unconventional self-management model completely eliminates bureaucracy from its day to day operations. In fact, Buurtzorg’s motto is “Humanity over bureaucracy.”
Irrational and Inhuman Gauntlets
Buurtzorg may be on to something in juxtaposing bureaucracy and humanity. For most of us, bureaucracies are gauntlets that we need to carefully navigate whether we are employees or customers. These hierarchical structures are not known for valuing individual differences or common sense. Most of us can think of a time when bureaucratic acolytes rigidly insisted on applying a senseless rule because they didn’t have the authority to make an exception, or worse yet, they told us they agreed with our concerns, but lamented that’s just the way it is. Unfortunately, bureaucracies are prone to be both irrational and inhuman.
This has been evident in the authoritarian mismanagement of Covid-19. Early on in the pandemic, the elite public health experts became fully invested in a particular outcome: vaccination of the entire population would allow us to eliminate the virus and return to normal day-to-day living. Vaccination was seen as the key to stopping people from catching and spreading the virus. Accordingly, many public health and corporate bureaucrats mandated vaccinations or implemented vaccine passports as requirements for people to go to movies, eat in restaurants, attend sporting events, or even remain employed. Some people, many of whom had recovered from previous infection and had strong natural immunity, lost their jobs because they were hesitant to take an experimental vaccine using a new technology whose long-term safety and efficacy is unknown and may not be known for years.
Given the state of the pandemic today where Omicron—which is highly transmissible to both the vaccinated and the unvaccinated alike—is the dominate variant, it is clear that this new vaccination technology is ineffective in stopping the spread of the virus. And yet many bureaucrats continue to mandate that people get a vaccine that doesn’t stop transmission as a strategy to stop transmission. This is irrational. And if anyone objects to this irrationality or suggests alternative approaches, such as focused protection or early treatments using repurposed existing drugs, the public and private bureaucratic elite are quick to demonize and censor anyone who thinks differently, often “othering” them through concerted character assassinations. This is inhuman.
A clear sign that social systems have become corrupt and unhealthy is when they are both irrational and inhuman. Corrupt systems are irrational because their leaders are more interested in pursuing their interests than the truth. They are more interested in preserving narratives that support their desired outcomes than learning about how reality actually works and discovering the best outcome, regardless of their preferences. Despite their rhetoric to the contrary, hierarchical leaders are far more motivated by what is best for them than what is best for the organization or the society. They are also motivated to preserve the status quo, and this motivation often distorts their sense of logic. Logic is no longer about discovering the principles and dynamics that define how things work and choosing a course of action that aligns with reality. Instead, logic becomes a tool to shape reality to fit the preconceived and often biased narratives of those in charge to reinforce deeply held assumptions. Thus, for example, despite the prolific advances in digital technology in the early 2000’s, Kodak’s executives insisted the future of photography was in film. Unfortunately, their deeply held convictions about the future turned out to be irrational.
When systems are corrupt, the intense pressure for ideological conformity and compliance shapes social interactions by setting up clear norms for what is speakable and what is unspeakable. These norms are reinforced through censorship, or more disturbingly, self-censorship. Differing views are labelled as misinformation. Demonizing those who persist in holding unorthodox views and denying them fundamental rights becomes a socially acceptable intolerance, meaning people are free to discriminate against those who choose not to conform with acceptable thinking.
In addition, corrupt systems are also inherently unhealthy because they kill dialogue. Conversation is an essential element of social life. Conversation can take many forms. It’s casual repartee among neighbors, intimate discussions among lovers, meetings at work, broadcast television and radio, attending shows, listening to music, texting or talking on a smartphone, surfing the Internet, exchanging emails, or reading a book. Conversations work best when people are free to express themselves, are able to listen to understand, and can exchange ideas, regardless of agreement or disagreement. The free exchange of ideas is the catalyst for learning and growth. And learning and growth is the pathway for developing both healthy people and healthy systems.
Over the next decade, we will clearly see that the development of new digital innovations such as the IoT and AI are inevitable. We will not be able to stop the progress of technological evolution. However, we will also see that we have a choice about how we use these tools. And this choice is about whether the world gets better or worse. This is the digital fork in the road. In the second part of this two-part series, we will explore the existential choice that lies ahead and what we can do to use these tools to build a better and more healthy world.