Netarchy: The Smartest Way to Build Dual Organizations

You don’t need someone to tell you what to do, or to occupy a position on the organizational chart to mobilize, innovate, and commit to what you’re really passionate about

I think we can agree that, over time, we have come to build exceptionally complex organizations, full of departments and hierarchies, full of instructions and rules, of very complex business processes and decision-making. In the current scenario, marked by accelerated change, competitiveness and the constant flow of information, our organizations have become inefficient, slow, bureaucratic and, what is worse, deathly boring, capable of killing the passion and creativity of the most fervent of our collaborators.

The good news is that networks are showing us new ways to deal with these limits, characteristic of traditional organizations: from taking advantage of collective intelligence for the creation of an open operating system such as Linux, or an encyclopedia of free content that we can all edit such as Wikipedia, to the construction of social networks such as Twitter or Facebook. where hundreds of millions of people can share, create, and collaborate in global communities that just a few years ago didn’t even exist.

Companies now have exponential new technologies at their fingertips to make their operation more efficient and address new opportunities that open and close every day around them. And as is often the case with every new technology cycle, agile companies that are able to adapt will capture some of this competitive advantage. Companies that do not adapt to this new organizational model will be comparatively inefficient compared to their competitors, they will lose share, turnover, profitability… And eventually they will disappear.

Dual Organizations

Organizational architecture is ultimately a means to an end: to be able to interact in a given context in order to learn, adapt, and stay competitive. Hence, the organizations of the future, as Harvard Business School professor John P. Kotter argues in his latest book “Accelerate”, in order to face the new challenges, must have a dual structure, which allows them to simultaneously achieve operational results with greater operational resilience in the face of the complexity and volatility of a digital world.

A structure focused on achieving the day-to-day results of business and a second complementary structure, operating as an agile network, focused on the new opportunities and demands of the future. Organizational duality thus provides a promising new approach to continuous and discontinuous innovation within the same organization, by using hierarchy for the exploitation of existing resources and redarchy for the exploration of new emerging opportunities.

 

Netarchy as a new paradigm

The central idea of Redarchy is that networks create an alternative order in organizations. The network structure allows us to coordinate human efforts to achieve the goals and objectives of the organization, without sacrificing the creativity and initiative of people. You don’t need someone to tell you what to do, or occupy a position on the organizational chart, to mobilize, innovate, and commit to what you’re really passionate about.

The redarchy thus increases the capacity for adaptation and change of the entire structure, facilitating collaborative innovation and corporate activism as a mechanism to mobilize participation, identify resistance to change and promote the necessary innovation initiatives. The Redarchy paradigm means, in short, less complexity in design and less of everything that is not essential. Practice teaches us that most of what we think is essential is actually not.

This philosophy means accepting that in today’s complex world, where time is the fundamental variable, we need new agile networked structures that complement the hierarchy and create new contribution frameworks, beyond jobs and the organizational chart, where people can operate on their own initiative to accelerate the necessary changes in the organization.

One Organization, Two Structures: 1+1 = 3

Organizations’ operating model bridges the gap between business strategy and Availability of its operational resources to achieve the business objectives that have been set in the strategic plan. The operating model of the dual organization consists of two complementary structures:

1) A well-structured hierarchy with the management processes needed to produce reliable and efficient results, focused on people doing what they know how to do exceptionally well.

2) A redarchy, a network structure autonomous from the hierarchy, more agile, free of bureaucratic layers that operates in concert with the hierarchy, but focused on exploring the future and new opportunities.

Just as hierarchy is an imposed order that establishes the relationships of delegation of authority between superiors and subordinates, redarchy is an emergent order that arises as a result of the relationships of participation and flows of activity generated in collaborative environments. Redarchy thus gives our organizations two important new dimensions: a network dimension that has to do with the set of nodes and links that facilitate relationships, and a social dimension, the community, which makes it possible to connect with the collective intelligence of the organization.

Make it happen in your organization

Here are three steps to follow that summarize what we have learned by making collective innovation a reality in very significant companies in our country, which can serve as a guide for transformation:

1. Creation of new contribution frameworks that enable collective innovation.

The starting point is to create and foster an appropriate environment, which allows dedicated time and resources to be devoted to collective innovation. The aim is to enable shared infrastructures and innovation circles, within and within the borders of the organisation, and to return activities for innovation and exploration of new business models to autonomous communities.

It is necessary to have a collaborative platform, which combines collaborative learning with collective innovation capabilities, as well as to establish a guiding community based on a coalition of agents who “viralize” new behaviors and collaborative ways of doing things, who share a common purpose that is aligned with the strategic challenges faced by the organization.

2. Development of collaborative leadership, culture, and the necessary soft competencies.

Unlike formal leadership, in which authority derives from our position, collaborative leadership is exercised from our personal power and credibility. It does not originate, therefore, in the position we occupy, but in our proactive performance as leaders, based on our passion and perseverance, our self-confidence and our ability to decide. This is the essence of collaborative leadership.

It’s about asking the right questions, listening, proposing alternatives, convincing and managing the losses associated with the new ways of doing things and the necessary changes. We must develop new ways of doing digital in social media, with the aim of adapting individual leadership, culture, processes and responsibilities to new frameworks of collaborative contribution. We have to collaborate on social platforms compatible with the functional structure, so that it is possible to integrate their activity and its results into the overall organizational context.

3. Innovate by doing to translate mass collaboration into business value

We must translate both ideas and collaborative work into business value. Collaboration must be transformed into innovation initiatives, concrete operational improvements, and a new way of working for the organization as a whole.

It is important that the collaborative platform, as Neurok does, supports the creation, selection and translation of ideas into concrete business initiatives, with progress metrics and results management. This will allow us to accelerate the development of those initiatives that add the most value to the organization as a whole. In short, it is about translating collaboration into tangible competitive advantages in all possible aspects of business activity. Not surprisingly, if we manage to involve customers, distributors and channels in the design of new products, we will improve their chances of success, and we will accelerate their acceptance in the market.

It is equally important to achieve concrete successes and also to ensure that those achievements are visible to the entire organization and to celebrate them. These achievements or successes and their celebration can bring enormous positive energy and be crucial in building and sustaining a dual enterprise. Early results lend credibility to the new structure, and this credibility in turn promotes increasing cooperation throughout the organization.

The institutionalization of achievements will end up integrating operational duality as a new way of doing things in the company’s culture. Duality should be seen as an organizational capability that constantly looks for opportunities, identifies initiatives to capitalize on them, and completes initiatives quickly and efficiently.

We still have a lot to learn about the organizations of the future, but if you are a pioneer of management, and you are convinced that new management models, beyond hierarchy, are possible, I encourage you not to wait for more evidence and start taking the necessary steps today to ensure that your organization is able to thrive in a complex and ever-changing world. Do you dare?