I spent Wednesday at the excellent ConnectingHR event. (See reviews here, here and here.) The event was subtitled ‘The Power of a Socially Engaged Organisation’ and, as you might expect from a bunch of HR people who came together through blogging and Twitter, much of the discussion was about the impact of technology and social media on organisations.
There were some fascinating stories about organisations harnessing the energy and creativity of their people by using various social media platforms but, inevitably, the question of control came up. What happens when senior managers try to control what is being said by employees? What happens if they find they can’t?
A couple of people gave examples of senior managers being wrong-footed by questions and comments that had grown out of these online conversations. In one case, a full-on revolt against that most sacred of cows, the distribution of the bonus pot, had the executive team on the back foot and, judging from their responses, feeling extremely uncomfortable.
Four years ago, a Demos report, Power and Responsibility at Work, observed:
The dynamics of the workplace are being reshaped by the ongoing relationship between networks – often informal, self- organising, horizontal, opaque – and the official structures of departments, line managers and appraisals. This is because people are able to work together more easily without the coordinating hand or disciplinary gaze of an organisation.
An individual may be quite close to the bottom of a formal hierarchy, but occupy a position close to the centre of several informal sets of relationships, granting him a degree of centrality that reveals his actual power.
Or, to put it another way, the water-cooler gurus can get a company-wide or even a global audience now. Grumbles about bonuses that might once have taken place around dozens of different coffee machines can come together in a critical mass of protest which overwhelms unprepared senior executives.
There isn’t much corporations can do about this. Sure, they can censor the networks and restrict access but these days anyone can set up a blog, Facebook group or Twitter account in minutes. If employees want to talk to each other, they can do so outside the company’s control.
There was much talk on Wednesday, then, about the erosion of managerial control and even the democratisation of organisations. But, while managers of today can’t expect to have the same levels of control over a workforce that their predecessors might have had, I still wonder whether this will really democratise organisations in any meaningful sense.
As I said last week, over the past half-century or so, there has been an inverse relationship between the formality of an organisation and the distribution of rewards. As the walls of hierarchy have fallen, the canyon between earnings has widened. There might be less perceived power-distance between senior people and everyone else but the wage differentials have shot up.
It’s as if the metaphorical Everyboss sat down with his employees and said, “Hey, you don’t have to wear a tie any more and you can stop calling me Sir. I’ll lose the big wood-panelled office and leave the door to my glass one open. You can do what you like on this social media thing and I’ll answer queries from whoever, whenever. Hell, I’ll even smile when that Aussie temp takes the piss out of me. You can have all this provided I get to keep more of the money!”
The decisions that really matter, the ones about the allocation of resources, are as tightly controlled as they ever were. Even in the companies that have driven the technology behind social media, things are not always as freewheeling as they look. These companies might have mountain bikes and snowboards in their reception areas, instead of expensive sculptures but, in their own ways, they are every bit as corporate as General Motors or Goldman Sachs.
As it grows, even Facebook is struggling to resolve the tension between the desire to create a non-hierarchical feel and the inevitable corporatisation that comes with being a large multinational. This comment on CNN tells you something about the way things work there:
“Mark decides what to do with the product, and everyone has to figure out how it will affect them,” says a Facebook veteran. “It’s not a discussion. It has a whiplash effect on everyone — and it’s part of the genius.”
The godfather of social media doesn’t seem too keen on letting investors have much of a say either. Lucy Marcus has an interesting take on this:
Several troubling issues call into question how this company can consider itself groundbreaking, innovative or new: the concentration of power in the hands of one man, the stranglehold on voting rights, the lack of diversity in the boardroom (which in a way is inconsequential, as the Facebook board does not have much bite anyway), and above all else the flagrant disregard of the lessons of the past several years about engaged, active and independent boards contributing to strong companies. Were Facebook striving to be an innovative company built to last, it would encourage healthy dialogue and diversity in the boardroom, and equal shareholder voting rights. It would not need to lock in power, but rather earn authority through excellent performance and results. The leadership would trust that a democratic boardroom would foster greater strength and stability than dictatorship, which brings a false sense of security. That’s a lesson we can take from the Arab Spring, where dictators thought that they held real control.
Even the hippie capitalists, it seems, want to keep control of the important stuff.
So, while it is difficult to deny the impact of technology and changing social attitudes on organisations, I’m still not convinced that this will lead to any form of organisational democracy. Real sharing of control would mean that big decisions about resources would be opened up. Corporate leaders are still extremely reluctant to do that.
Organisations might look less stuffy and hierarchical than they used to and the senior people in them will almost certainly be called upon to justify themselves more often. But the really important decisions will still be made by a powerful few. That will still be true even when the powerful few swap pin-stripes for t-shirts.