We’d suggest that it is clear to most workers today that org charts, or connected boxes, cannot even remotely describe organisational complexity and reality of working life.  Since the rise of the corporation at the dawn of the industrial age, much has been said and written about leadership, power, and structure in organisations.

We’d assert that organisations cannot be described through a single structure, a structure that has since the glory days of the railway corporation in the middle of the 19th century been usually depicted in the shape of a hierarchical organisation chart.

Three kinds of leadership

Instead, every organisation knows three kinds of leadership. Not one.

  1. Compliance Leadership — the realm of hierarchy
  2. Social Leadership — the realm of influence
    This is where our WHY is made visible
  3. Value Creation Leadership — the realm of reputation
    This is where our customer-centric organisation is recognised

Let’s dig a little deeper …

What are the leadership tensions in my Organisation?

Compliance

The most widely understood concept of power in organisation is that of hierarchy.

This formal structure is capable of producing one important thing: Compliance with the law, receive investments, pay out shareholders, etc.

Formal structure is dramatically over-emphasized in most companies: We make way too much of it, even though we sense that too much use of formal power by managers, or too much emphasis on hierarchy, has serious downsides. The problem is that many managers, or, arguably, most working people, don’t think of the two other structures of any organization that we are about to discuss.

This is the organisational structure that most of us are familiar with

Social

A second organisational structure is the social one. This structure is mostly based on relationships, influence and social interactions: it’s inherent in organisations since social interactions are inherently there.

You can befriend your CEO or another senior leader and this will eventually lead to you having more influence over the organisation.  You can get on well with someone in another team and then call on a favour when needed.

The organisation should be sized, staffed and funded to deliver the products which embody the company's Why

Value Creation

The third structure is the value-creation structure and it relates with how the company organises when it needs to provide value to customers and users.

Value Creation Structures can be mapped as networks of cells, which contain cross-functionally integrated teams, and which are interrelated by value flow, pay, and communication relationships. In the structure, any cell either creates value for other network cells (within the organisation) or for the outside market (in case of the periphery).

Teams respond to market pull, not to hierarchy



In this context value is produced not only “inside” organisations but instead, essentially at the edge, in between the inside and outside and always in a relationship (either internal or across the edge with a customer).

The Value Creation concept is one of organisations with disappearing borders and made of loosely coupled elements, which nicely aligns with our assertion that small, autonomous teams are the best way to creating a customer-centric organisation.

Social Business

The realms of influence and reputation - the Social and Value Creation structures set out above - are the basis of building the Social Business we discuss in Social Knowledge Management.

If you'd like help some practical help in moving away from a command-and-control paradigm to an empowered and client-centric staffing structure, then we'd be pleased to have an introductory call.

Get in touch

Next: Executive Accountability

Execs need a full-stack vertical responsibility. One Exec cannot be accountable for the end-outcome when another Exec is responsible for delivery of part of that service. Read more about how the Execs must work as a team in Executive Accountability.

Executive Accountability
Responsibility can be shared while accountability cannot. Execs must work as a team and be clear on the breadth of corporate ambition, given accountability do deliver within their area of strategy and be given all responsibility within that accountability.

A Chief of Staff works alongside their Exec as a force multiplier. There is so much noise that each Exec member needs someone to help manage strategy and innovation.

Chief of Staff
Your CxO can’t do everything themselves. There is so much noise in the world. They need someone to help manage strategy and innovation and to improve the signal-to-noise ratio. A Chief of Staff works alongside their Exec as a force multiplier.

Let's not forget that People Matter.

People Matter
Whatever our background, all of us are a diverse mixture of our past and present, with our own hopes and fears, abilities and weaknesses. Together we represent society, and by embracing the breadth of what we all offer then we are also relevant to and engaged with our customers.