Of Pyramids and Pancakes

At last week’s Global Drucker Forum in Vienna, Josephine Green – formerly the senior director of Trends and Strategy at Philips Design and currently a consultant at Beyond 20– argued that we are witnessing the “death of hierarchy.”

The worldview reflected by the classic, Industrial Age, hierarchical pyramid with power concentrated at the top, according to Green, is “bankrupt.”

“It made sense in one era,” she said. “It is now increasingly making nonsense.”

In place of the pyramid, Green offered the “pancake” model of society and organizations, a flatter structure more suited to our decentralized, chaotic and complex era.

[EXPAND More]The pyramid, said Green, is characterized by standardization, a desire to predict and control, and a belief in scarcity that elevates competition as “the supreme principle of how our society progresses and grows and moves forward.”

But Green believes “we have left this world behind” as a result of advances in technology and social networking. “People have come out of their boxes,” she said. They are producers, not just consumers, and have put themselves at the front end of the innovation process, leading to a world in which “more really is more.”

To manage effectively, Green said, we have already switched to a new governance model, abandoning the hierarchy of the pyramid for the collective inclusiveness of the pancake.

Peter Drucker saw the virtues of both pyramids and pancakes – depending on the situation. In his 1999 book, Management Challenges for the 21st Century, Drucker maintained that “in any institution, there has to be a final authority . . . someone who can make the final decisions and who can expect them to be obeyed.” At the same time, in a 1989 lecture, he recognized that with the ever-increasing flow of information, “you will get much flatter organizations, which will also be organized far more on the basis of direct responsibility.”

In the end, Drucker thought it was best to be flexible. “There is no such thing as the one right organization,” he wrote. “There are only organizations, each of which has distinct strengths, distinct limitations, and specific applications. It has become clear that organization is not an absolute. It is a tool for making people productive in working together. As such, a given organization structure fits certain tasks in certain conditions and at certain times.” Drucker went on to say that, “in any one enterprise . . . there is need for a number of different organization structures coexisting side by side.”

So how does it work in your organization: Is hierarchy dying – and what are the pros and cons of what you’re seeing?[/EXPAND]