A thought piece by Joe Pacitti, CeeD Managing Director
Having read this quote recently, it made me ponder on how the shape and models of organisations from hierarchical to network-orientated impact on strong economies.
It is perhaps not surprising that this commentary on the positive shift in the way successful organisations may move towards a more network orientated approach may mirror how society in all its forms of social and business models are more fragmented or distributed. The other trend of how digital connectivity allows more fragmented and distributed structures to connect in a way that was harder in the pre-digital world now become a reality, so realisation and actions rather than theory and supposition is what we see!
The question of accelerated change though still highlights the need for “proper communication”, if indeed the definition of communication is about meaningful exchange of information – two way transmitting and receiving – not just a measure of data upload and download.
The ability to manipulate and exchange huge amounts of data is certainly not a bad thing – but it is so much better when the usefulness of this (the intelligence part) adds value and improves understanding – as well as stimulating new thoughts and horizons. I suspect there are many who advocate the advances of AI for the common good and who are more expert in this field, but I would hope that they agree with my thoughts. Perhaps the extract from the McKinsey report on "Human-machine collaboration with AI & automation" (mckinsey.com) confirms this:
"Benefits of AI and data communication for mankind include improved operational efficiency, enhanced decision-making, and innovative solutions across various sectors. However, it’s essential to balance AI’s capabilities with human qualities like creativity, empathy, critical thinking, and emotional intelligence. Overall, AI holds great promise for business and society, but responsible deployment and collaboration are key to maximizing its benefits."
So the thought & opinion piece penned here, is not to challenge or agree with this view or to shed yet more insight on the value of AI and data element. The thoughts I am suggesting are focussed around some of the potential barriers to realise full potential. Does this modern approach to data and AI need a modern structure? A better one than the traditional Hierarchy model?
Returning to the opening theme and the need to look at the best or optimal structures for business and economic growth – do they require to be aligned in a series of Hierarchy models or embracing a truly distributed Network structure?
In talking to a few of my trusted network – some old friends and colleagues, others new to me (but fast becoming additional trusted and 'go to' experts) - it strikes me that the ones I meet with in the best and most valuable influencing positions are network animals operating in hierarchical organisations.
My take though, is that this is not because hierarchies provide the best structure, it is just that they still dominate a lot of the world I sit in with government, policy making, education and the influence on public funding which is being directed to help innovate and grow the economy.
This is where I am conflicted – those who I believe have the best approaches to making a difference are those who are the networking-orientated individuals, managing to negotiate their way internally and externally to make the needed change for the good, doing so as efficiently as they can because of the constraints and controls that a hierarchy brings.
I fully accept the need for the Hierarchy model in many cases and the advantages of:
- Clarity - clearly defined roles and responsibilities
- Efficiency - streamlined decision-making
- Control - centralised authority
- Stability - predictable processes
However, when the task at hand is one of modernising and creating innovation, the benefits attributed to the Network model outlined below poses a question:
- Flexibility - adaptability to changing circumstances
- Agility - quick response to emerging opportunities
- Innovation - cross-functional collaboration
- Resilience - distributed decision-making
The question for me is should the structure in which we operate not move toward this in a more modern way?
So, much talk of building a strong innovation eco-culture is highlighted in current commentary, but often the conversation and levers about doing this are still dominated by the public sector with hierarchical thinking and structures at the centre. The private sector may already be embracing more of the network structures – so perhaps the way funding is managed and challenged needs to be flexed so as to maximise the opportunity for innovation.
It is interesting to me and I hope others that I actually wrote an article relating to the benefit and power of networks some time ago - which featured on the Scotsman here.
What is heartening, is that pretty well the views expressed then are still true and hold up. What might be disappointing, is that the challenges and barriers to make more impact from this approach are still present, slowly changing, but innovation needs to be realised at pace.
So why is it worth revisiting this theme – but with a twist, now?
Well with some relevant and additional thinking, drawn from my interactions since I looked at this some years ago – those views that suggest that the hierarchy structures that dominate the levers of public influence may need to change in how they operate.
Plus the obvious timepoint that we are now right in the middle of new political leadership in the UK, and well into post Brexit. Therefore our structure and landscape have changed. I do not need to make any comment about this for the better or worse, just to highlight we are at a change point.
So if I am now able to come to and make my key points on the challenges we may face to realise innovative and economic change.
We must recognise that the “network of networks” model to help innovate and grow the manufacturing and engineering sectors and hence allow this to lever impact in the economy is now at another great nexus point. To capitalise on this change, it needs the support of policy and funding organisations to recognise this and, dare I say, embrace those organisations such as CeeD and its partners, who are all trying to work collaboratively by shifting the influence to make things happen from here, these active and vibrant network positions.
Why is this important and even more appropriate? Well, if the public finances are stretched but the private sector do have some funding they can instantly bring to bear, then this meets the challenges and statements of government that the wealth and change can and must come from the private sector. A simple arithmetical or financial ratio comes to play, “use small and agile amounts of funding from the public sector to match the funding, goodwill and power of the industry base to get stuff done”. Not only will this unlock innovation but also the productivity gap, so much of the challenges we face will be positively affected.
Having spent the last 6 weeks or so listening to arguments and manifestos and even contracts, talking about what each party/organisation would do going forward – then I think it is only right to lay out our/my manifesto.
If the public policy and funding bodies can lean in more with a networking model, then networks such as CeeD can make those changes to support innovation, talent challenges and productivity by providing modest funding pledges to allow industry-led capacity building.
What do I mean by this? Well, doing what needs to be done often has to go beyond the classic roles and income models that networks operate in to be sustainable. It is not just that it makes sense and is indeed obvious but, while often the intention to support them is already there, activity to support the industry and sector needs to be done.
It is again back to the argument that the levers of support that are funded, which are from the focus of often larger and less agile hierarchical models, being slow to act and poor productivity gains could be the result. Shift this to push more of the capacity building activity that government would need to fund anyway to the agile network integrators, supported with some modest funding. Better for all, as the impact will be better, levering in private sector support but more productive as the head of steam to get going meaningfully will be there. I don’t think anyone would be surprised that many of the supported projects/initiatives of scale often fail to full delivery as the initial set up period takes too long in the “hierarchy models” of control and processes.
Some great news is the recent release of some funding in Scotland for the ecosystem “The Scottish Ecosystem Fund”. CeeD and its partners were successful in a bid and the experience on our project was one of very positive and agile impact, delivered in a tight timescale. So, balancing economic growth with more of this approach as part of the mix has to be considered as the direction of future travel.
Again, let me stress that a healthy and prosperous economy needs to follow the sage advice for a healthy diet: it is about shifting to one of balance and moderation.
So my challenge here is for the private sector industry organisations to rally and tell us through their comment and support if they agree this is where they can help - AND for the public funded agencies to come to us to ask us to help unlock the growth, co-operatively and co-developing agile activities and initiatives.
We can't rely on just the usual large scale interventions which get institutionalised, lack agility and become less productive trying to work out plan after plan, rather than doing some obvious practical and pragmatic interventions. We need both approaches to run together, and indeed work together in the ecosystem.
If you truly believe the much used phrase “government and industry are in this together”, here is the opportunity for both to show that they really mean it. Perhaps the telling KPI for me to share that they do, will be how quickly my email inbox and phone starts to ring from both sides!