Last in the series: “The power of collective intelligence in organizations”

Working well with a vendor/partner is a two way street!

This is the last post I’ll make related to the work of MIT Professor Tom Malone and his interesting book, The Future of Work. Previously I told you about Malone’s concept of how technology is enabling collective intelligence at a level never seen before and how that is changing how people work.

Another trend Malone cites as a driver for radically different work is what he calls the “e-lance economy” comprised of electronically connected freelance workers or independent contractors that combine in unique configurations on a temporary basis to accomplish specific projects. An e-lance model already is common for the motion picture and construction industries. Malone predicts that this way of organizing will become more common in other industries.

That approach also is common in the IT world and is the model on which Intertech has been based since we started 20 years ago. I devote six chapters in my book Building a Winning Business laying out my thoughts on how to work effectively with vendors. Takeaways #39-#40 describes how to supplement your team with carefully selected vendors and to work the interview process. Takeaways #41-42 deal with the importance of communication and taking the time to get the project off on the right foot.

Just about what you might expect, right?

What might surprise readers is the chapter (#43) on how to be a good customer. Yes, you read that right. Working effectively with vendors of any type is a two-way street. Good customer-vendor relationships require both parties to participate, communicate and share responsibility for a successful outcome. I won’t reiterate everything in the chapter here but I will tell you that communicating – early and often – ranks high on the list!

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.