Chapter 6: Creating Peer-Based Organizations

OVERVIEW

Instituting real team work means encouraging everyone's ideas and treating all members of the team as equals, and companies need to organize and empower teams of employees in which no knowledge ranks higher than another; each is judged by its contribution to the common task rather than by any inherent superiority or inferiority. The modern organization cannot be an organization of boss and subordinate. ”Peter Drucker, "The Coming of the New Organization"

We have been comparing and contrasting the two basic paradigms of managing work, organizing companies, and relating to others ”rank-based thinking versus peer-based thinking ”along with their assumptions, logic, and practices. We have also explored the dynamic of the two types of rank-based organizations: the Big Chief and the hierarchical organization. If an organization can make it from the Big Chief stage to the hierarchical stage, it achieves a certain stability. This success, however, becomes the cause of future failure, as the hierarchical structure that brings stability will more often than not be protected by the rank-based thinking underlying the myth of leadership.

As change and uncertainty increase and as knowledge workers demand more meaningful work, rank-based leaders will be hard-pressed to sustain viable organizations. In its declining state, the rank-based organization will either attempt to survive through massive layoffs or by acquiring other companies and cannibalizing their resources, or it will be acquired or go out of business. As we move into the complex business environment of the network society, rank-based thinking will fail to achieve the required resiliency and creativity to prosper . However, an organization does not have to remain reactive to the ever-increasing changes in the business environment of the network society.