Creaking mindsets: Why businesses are about to learn some hard lessons

In an article first published in City AM, Adam Lent argues we're shifting away from a world defined by hierarchy to one shaped by mass participation, and organisations had better take note if they want to survive.

Are we experiencing a revolution in the way that organisations operate? A recent essay in the Harvard Business Review has caused a stir by claiming that we are. The authors, Jeremy Heimans and Henry Timms, draw a distinction between institutions that are defined by “old power” and “new power.” The former rely on the exclusive nature of what they “own, know or control that nobody else does”. New power organisations rely on sharing what they own, know or control to unleash the activities of many others.

Organisations are also distinguished by their values. The old values are managerialism, competition and professionalism. New value bodies are driven by self-organisation, collaboration and a DIY spirit. The essay identifies Wikipedia, Etsy and Kickstarter as practising both new power and new values at their purest. Bitcoin and other “blockchain” bodies could well be added to that list. Placed at the other end of the scale are the US National Security Agency (NSA) and the Encyclopedia Britannica.

Crucially, some supposedly modern organisations could be dangerously close to dinosaur territory. Apple, for example, may not be the NSA, but it still operates largely in an old power/old value way. Uber and Facebook both work with a new power model, but paradoxically cling on to old values.

This shift away from a world defined by hierarchy to one shaped by mass participation is being noticed by a number of others. Our London-based think tank the RSA calls it the unleashing of the “power to create.” Ashoka, the respected network of social entrepreneurs, describes it as an “everyone a changemaker” world. And the Belgian author Frederic Laloux has garnered enormous interest by exploring highly successful decentralised businesses.

Of course, this revolution has not happened overnight. It is part of a long march away from the last century, when old power/old value institutions were widely regarded as the very essence of all that was modern: think General Motors, the National Health Service, the major TV networks.

But since the social revolution of the 1960s, the desire to make choices for ourselves and to have a say has simply never stopped growing. And as we know from history, when freedom and respect surges forward – the Reformation, the liberal revolutions of the 1800s, the extension of the vote in the 20th century – it is extremely difficult to hold it back.

The lesson for anyone who leads a business or any institution is clear: this revolution is unavoidable.

Take a look at your organisation and ask yourself how new its power and its values really are. Do you aim to enable others to unleash their creativity by sharing what you know or own with them? Or are you still living in a world where you expect your customers or stakeholders to trust you to use your own carefully guarded power to do things on their behalf?

The answer, if Heimans, Timms and a range of others are right, could determine whether your organisation is likely to survive.