RANK-BASED VS. PEER-BASED ORGANIZATIONS

Obviously, an organization designed to be peer based will be very different from its rank-based counterpart . Rank-based thinking suppresses the heart and intelligence of the majority of an organization's employees . Command-and-control managing under the influence of rank-based thinking tends to be harsh , coercive, and demotivating. It is likely to create a poisonous atmosphere in the organization that kills an employee's natural desire to cooperate and be productive. Peer-based thinking rejects rank and supports a different type of organization, one that respects all members of the organization as peers.

The very form of peer-based organizations promotes the heart and intelligence of all employees. The more individual employees participate in decision making, the more their energy and dedication are enlisted by the organization. Allowed to share in business deliberations, individual employees expand their range of concerns beyond narrow self-interest to include a disciplined concern for the well-being of the whole organization. Most rank-based companies discourage the average individual's participation in decision making.

Deprived of a share in business deliberations, individual employees become almost totally absorbed with their own individual concerns and needs. Many rank-based leaders view this as further proof of their need to control decision making. They are blind to how rank-based leadership by nature creates self-centered employees. Thomas Kuhn (1962) said we don't see something until we have the right metaphor to let us perceive it. Most of our mental models, particularly in business, are still rank based. We need a new gestalt.

John Case (1993), in a cover story for Inc. magazine, pointed out that "a twenty-first century company's task will be to organize work so it can be carried out by businesspeople ”by men and women who take responsibility and who share in the risks and rewards of enterprise" (93). Ten years later, most companies still have not created this sort of organization. I believe a main reason for this failure is the absence of a proper understanding of rank-based versus peer-based thinking. When a leader tries to share decision-making responsibility with others but fails to address the underlying rank-based thinking, any positive results will be short-term. The long- term results will include an increase in employee cynicism and an increase in rank-based control.