Second in a series: “The power of collective intelligence in organizations”

Is a command and control hierarchy better than a communicate collaborate structure? Not sure? Read below.

My previous post on the concept of collective intelligence quoted Tom Malone, who is the Patrick J. McGovern Professor of Management and Professor of Technology at the MIT Sloan School of Management and author of the book The Future of Work. “Collective, global and human intelligence is growing due to technology and the Internet. This has never existed on our planet before,” says Malone.

But what does this mean for the way we run our organizations?

Organizations in the future will give employees “far more freedom, responsibility and power” says Malone and he provides some compelling models for designing companies of the future based on four different types of decentralized organizational structures: loose hierarchies, democracies, external markets and internal markets.

Loose hierarchies primarily are characterized by important decision-making occurring at lower organizational levels. AES, one of the world’s largest power producers, is an example of such a loose hierarchical corporate structure. Malone explains that AES operates on the basis of one important decision-making rule: employees don’t need approval of their decisions but they must seek advice for making decisions.

He says that democracies will replace old business models based on an increasingly outmoded industrial age. He sums this up as a shift from a “command-and-control” to a “coordinate-and-cultivate” management style.

I couldn’t agree more!

Takeaway #18 in my book Building a Winning Business  describes the importance of involving the whole team when defining values. Taking a page from business expert Jim Collins we employed the Martian Group exercise in which all employees are asked to pick the handful of colleagues who best exemplify the organization’s core values. This process helped us indentify the values we hold most dear at Intertech: positive attitude, commitment to delivering and professional excellence.

First in a series: “The power of collective intelligence in organizations”

People are smarter in groups (though there may be exceptions to this rule).

We’ve all heard the phrase, “the sum is greater than its parts.” New thinking and research has shown (once again) that folk wisdom actually can be proven through science. Tom Malone, a respected professor at the MIT Sloan School of Management, explains it in a fascinating book, The Future of Work, which is based on 20 years of research and compelling insight into ways technology is changing how people think and work.  Malone also is the co-director of a cool initiative at MIT, “Inventing the Organizations of the 21^st Century,” which is cataloguing how these changes are happening now and how they can happen in the future – if we choose.

In a nutshell, Malone explains that people actually are smarter in groups. You might assume, as I first did, that the people with higher IQs simply make the rest of the people in the group look better. But it was not the case. Instead, Malone has research that proves that the collective intelligence of a group actually is higher than the combined individual intelligence of each group member!  (Look up the article “The Collective Intelligence Genome” in the spring 2010 issue of the MIT Sloan Management Review for the full story.)

He also notes that the availability and increasingly lower cost of technology is making it easier and more practical for groups of people to solve problems collectively. “The collective global human intelligence is growing exponentially due to technology and the Internet. This never has existed on our planet before,” he says.

What does this mean for society, and business in particular? I will explore that more in my next few posts, but I can tell you that Intertech long has embraced the power of collective intelligence. If you have read my book, Building a Winning Business, you already know that I am a big believer in daily huddles, management retreats, all-company meetings and other techniques for getting teams together to solve problems and brainstorm creative solutions.  In the meantime, check out Malone’s work. It will make you deeply ponder what percentage of the intelligence, creativity and energy in your organization you are (or are not!) actually taking advantage of.

#7: Teamwork

Do you solicit input from everyone on the team? Do you support all team members and encourage cooperation? These are tough questions from the Emotional and Social Competency Inventory and they’re worth exploring. I discussed Intertech’s process for soliciting input from all of our team members in my earlier post on attunement so I won’t revisit that here.

We encourage cooperation and support for all team members in a variety of ways, including our ACE program. If you’re a regular reader of my blog, you know that ACE is an acronym for Intertech’s core values: Attitude, Commitment and Excellent. The ACE program allows team members to nominate other team members  who exhibit those values in meaningful ways.  ACE “awards” are simple, fun items we purchase at Geek.com. But as you’ve probably surmised, the award itself is not the point.

Recognition by a peer or supervisor is what makes ACE special. The “awards” are presented during a monthly company-wide meeting  and they are given both to those who are nominated and to those who do the nominating. We feel this is important because it takes time to catch others doing a good job and it takes effort to fill out a nomination form. Nominating others helps build our positive culture and we want to reward that value right aong with whatever the nominee did so well.