The Future of WorkThe Future of Work

Thuy NguyenThuy Nguyen

September 29September 29thth 2005 2005

OutlineOutline

• Revolution pattern of organizationsRevolution pattern of organizations• DecentralizationDecentralization

– Loose HierarchiesLoose Hierarchies– DemocraciesDemocracies– MarketsMarkets

• Organizational & Personal Organizational & Personal Knowledge ManagementKnowledge Management

• Conclusions & DiscussionsConclusions & Discussions

Human Society Human Society RevolutionRevolution

Band Kingdom

Democracy

Organizational Structure Organizational Structure RevolutionRevolution

Small Businesses

(Independent)

CorporateHierarchies

(Centralized)

Networks(Decentralized)

Declining costs of communication

Declining costs of communication

Benefits of bigness

Freedom

Family businesses

Traditional military organizations

Research universitiesPolitical democraciesFree marketsInternet

DECENTRALIZATIONDECENTRALIZATION

The HierarchyThe Hierarchy

• Definition:Definition:– Top-down authorityTop-down authority– Abide by direct command from superiorsAbide by direct command from superiors– Please your superiors for incentivesPlease your superiors for incentives

• Evaluation:Evaluation:– Large-scale systems run with little Large-scale systems run with little

communicationcommunication– Good for conflict resolutionGood for conflict resolution– Not most efficient use of capabilitiesNot most efficient use of capabilities– Bottleneck crisisBottleneck crisis– Low sense of autonomyLow sense of autonomy

Loosening the HierarchyLoosening the Hierarchy

• Principle: delegate more Principle: delegate more responsibility down the hierarchyresponsibility down the hierarchy

• Successful stories:Successful stories:– Linux open-source softwareLinux open-source software– WikipediaWikipedia– Consulting firmsConsulting firms– Research universitiesResearch universities

DemocraciesDemocracies

• Between controlled hierarchies and open Between controlled hierarchies and open marketsmarkets

• DefinitionDefinition– Multi-channel communicationMulti-channel communication– Decisions made by votingDecisions made by voting– Must abide group decisionMust abide group decision

• Characteristics:Characteristics:– Participation in decision makingParticipation in decision making– Overall good to controlOverall good to control– Lots of communication required for informed Lots of communication required for informed

votingvoting– Equal right to vote regardless of capabilitiesEqual right to vote regardless of capabilities

Democracies (Cont’d)Democracies (Cont’d)

• eBay:eBay:– Online rating systemOnline rating system– Making customers feel they’re in charge of Making customers feel they’re in charge of

businessbusiness• Mondragon Cooperative CorporationMondragon Cooperative Corporation

– Group of 150 companies across disciplinesGroup of 150 companies across disciplines– 80% worker-owned80% worker-owned– Ratio of highest to lowest pay no more than Ratio of highest to lowest pay no more than

66– Goals: employment stability, regional Goals: employment stability, regional

economic development, social responsibilityeconomic development, social responsibility

Unleashing MarketsUnleashing Markets

• Let the market decide!Let the market decide!• Power & ownership distributed Power & ownership distributed

throughout whole marketthroughout whole market• Stories:Stories:

– E-Lance economy (Hollywood)E-Lance economy (Hollywood)– eBay: thousands of freelance retailers eBay: thousands of freelance retailers

working based on TRUSTworking based on TRUST– The InternetThe Internet

• Problem: too much freedom!!!Problem: too much freedom!!!

Unleashing Markets Unleashing Markets (Cont’d)(Cont’d)

• Strengths:Strengths:– Efficient allocation of resourcesEfficient allocation of resources– FlexibilityFlexibility– MotivationMotivation

• Drawbacks:Drawbacks:– Overall good giving into self-interestsOverall good giving into self-interests– Lots of communication needed in pair-Lots of communication needed in pair-

wise negotiaton.wise negotiaton.

Internal MarketsInternal Markets

• Set up internal market to coordinate Set up internal market to coordinate efforts within a company (to achieve efforts within a company (to achieve a certain goal)a certain goal)

• Successful stories:Successful stories:– BP: greenhouse gas emission reductionBP: greenhouse gas emission reduction– HP: quasi markets to form project HP: quasi markets to form project

teamsteams

Making your choiceMaking your choice

• Centralized hierarchies when:Centralized hierarchies when:– Economize on communication costsEconomize on communication costs– Lots of conflicts to resolveLots of conflicts to resolve

• Markets when:Markets when:– Maximize creativity and motivationMaximize creativity and motivation– Want to exploit many ideas simultaneouslyWant to exploit many ideas simultaneously

• Loose hierarchies and democracies Loose hierarchies and democracies when:when:– All 4 mentioned aspects are importantAll 4 mentioned aspects are important

Decentralize or not?Decentralize or not?

• No one in control. How to make No one in control. How to make decisions quickly and efficiently?decisions quickly and efficiently?

• What about quality control?What about quality control?• Are we gonna lose the advantage of Are we gonna lose the advantage of

economies of scale?economies of scale?• Is knowledge sharing difficult when Is knowledge sharing difficult when

decentralizing?decentralizing?

COSTS compared to BENEFITSCOSTS compared to BENEFITS

Redefine the values of Redefine the values of organizationsorganizations

• Put human values at the center of Put human values at the center of business.business.

• Work around what people want from Work around what people want from business.business.

• Ask the question: What matters to you?Ask the question: What matters to you?

COORDINATE & CULTIVATECOORDINATE & CULTIVATE

Instead ofInstead of

COMMAND & CONTROLCOMMAND & CONTROL

Questions for Questions for DiscussionsDiscussions

• Author explicitly stated that declining cost of Author explicitly stated that declining cost of communication is the driving force in communication is the driving force in decentralization. But limited insightful explanations decentralization. But limited insightful explanations weaved through the book.weaved through the book.

• Is decentralization only limited to businesses where Is decentralization only limited to businesses where certain attributes such as creativity, motivation and certain attributes such as creativity, motivation and flexibility are important? How far will flexibility are important? How far will decentralization actually go?decentralization actually go?

• Successful free markets require a lot of trust and Successful free markets require a lot of trust and assume that people like to work and enjoy freedom assume that people like to work and enjoy freedom (Theory Y). Are these characteristics general or (Theory Y). Are these characteristics general or exceptional to certain groups of professionals?exceptional to certain groups of professionals?

• How do you know your people are capable of making How do you know your people are capable of making decisions? And when something fails (such as quality decisions? And when something fails (such as quality control), how to trace back to where it happened and control), how to trace back to where it happened and fix it?fix it?