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Networks, Hierarchies, and Power in the 21st Century

Hierarchies and Networks

“The times they are a-changing.” – Bob Dylan

The rapid pace of technological change is putting astonishing strain on the institutions, organizations, and structures that govern and operate Western society. The refinement of technologies such as mobile phones, social media, and ever-improving global telecommunications systems are changing not only the way we communicate, but the way we operate, as well as the shapes and contours of society itself. Whether the citizen or the CEO in modern society, these changes are shifting the fundamental systems of power that govern our everyday lives and are doing so at a breakneck pace.

As the modern manifestation of humanity has evolved over the past 200,000 years, our methods to organize and accomplish tasks have also developed. Indeed, our methods of organization would astound our ancestors. The largest employer in the world, the US Department of Defense, employs 3.2 million people (The Economist, 2011). Picture for a moment the thousands of webs that ultimately connect each employee to the President of the United States – what an astounding social innovation!

In this article, we will look at two of the most fundamental arrangements of coordinated behavior during human existence. First, the hierarchy, followed by networks. We will investigate how these two aspects of social order shape the world around us. Networks, a natural development of social interaction, and hierarchies, a construct of humankind for organization, are core concepts that inform and intertwine the modern organizations and institutions of our society. We’ll take a closer look at how networks and hierarchies influence our everyday lives, how these systems are being challenged by the rapid technological and social innovation, and how understanding them more completely can help all of us build a more prosperous South Dakota and nation as a whole.

A pyramid-shaped puzzle representing the structure of a business hierarchy.

Hierarchy

Hierarchy is an intimidating word, but the complexity of the actual concept isn’t so bad. Hierarchies are reflective of the concept of saying someone is “in-charge” – if you have someone in your life you report-to or respect-as an authority – you are participating in a hierarchy right now.

As you might guess, hierarchy is an old word, stemming from the Greek hierarches. It was a combined word using hieros meaning “supernatural, holy” and archos, meaning “ruler” (Merriam-Webster, 2020). Today, the formal Merriam-Webster definition actually maintains that religious element, asa ruling body of clergy organized into orders or ranks each subordinate to the one above it”. Hierarchy has continued to spread its meaning beyond matters spiritual and governmental into several different forms of classification in society. If you are a member of a family or are employed with someone as your boss, you are part of a system that at least has attributes of a hierarchy.

At its core, we have evolved hierarchies to determine and accomplish tasks. As organizations and systems grow larger, they specialize, and with that, hierarchies have a place to evolve. We cede authority in social situations to a leader that oversees productivity and an increased specialization of tasks.

The strengths then, are apparent – hierarchies are one method of society arranging itself to get tasks done. Hierarchies are useful, and we have learned how to improve them over time. Put simply, hierarchies get things done.

Several tiles connected by line segments representing a business network.

Networks

So where do networks figure in? Networks are defined as “an interconnected or interrelated chain, group or system” (Merriam-Webster, 2020). Networks consist of independent parts that work together. It is not always clear who makes the decisions, and key directional changes can often be made at the edges of the organization. These systems thrive in an ever-changing world and can seem chaotic to a structured organization – many startups operate in this way.

These entities need not operate in isolation. Indeed, some cutting-edge thinkers apply network theories as a tool within and around hierarchies.

John Paul Kotter, the Konosuke Matusushita Professor of Leadership, Emeritus, at Harvard Business School notes in his article 2012 “Accelerate!” in the Harvard Business Review that “the existing processes that together form an organization’s operating system need an additional element to address the challenges produced by mounting complexity and rapid change” (Kotter, 2015). Kotter details a strategy he calls the “dual operating system” – essentially creating a network within a hierarchical organization. In this way the organization injects the flexibility and innovative potential of networks into the company’s existing hierarchical system.

So, in a nutshell, hierarchies and networks are systems of operating and accomplishing tasks that humans have developed over their existence. Successful integration of these principles is key to highly functioning organizations and institutions, especially within a period of accelerated change as we currently experience. Accelerated change demands more nimble organizational management.

Next, we will look toward some examples of hierarchy and networks, considering practical applications in South Dakota and the larger community development sphere.

Questions for Discussion

  • What hierarchies are you part of right now? What are the networks?
  • What do you appreciate about either/both? What are the weaknesses of either/both?
  • How could the hierarchies you are part-of be made more holistic by networks? How could the networks you are part-of be made more holistic or “action-ready” by a hierarchy?

South Dakota Innovators

Earlier, we took a broad view of hierarchies and networks, considering their influence on our modern society. We also noted that as our systems complexity as a species has increased, the demands put upon our models of management can be stressful, and at times, overwhelming.

Now, we will look at how South Dakota innovators in the community development space are utilizing these concepts in their work today.

While Kotter’s work focuses on intertwining networks into the fabric of organizational hierarchy to solve unique internal challenges, intelligent combinations of this concept can be focused not on inter-organizational innovation, but cooperative change and group learning.

Dakota Resources logo
Courtesy: Dakota Resources

 

Dakota Resources

Dakota Resources, a non-profit community development entity headquartered in Renner, SD, offers a strong example of this dynamic. Established in 1996, Dakota Resources employs a number of strategies in its community and economic development work, from their role as a Community Development Financial Institution (CDFI), to loan opportunities for economic development organizations, and more.

Of particular interest is the organization’s Dakota Resources Learning Network. On their website, they note:

“economic development professionals working in rural communities are often the only staff member in town, making you feel isolated from the rest of the world. But with the Dakota Resources Learning Network, you aren’t alone anymore.”

Begun in 2016, the Learning Network draws together economic development professionals from across South Dakota in a network matrix underneath, (or surrounding if that mental images suits), Dakota Resources’ organizational structure. In this fashion, Dakota Resources blends the strength and expertise of its conventional staff with the resources and open-source learning capacity of affiliated group of professionals.

    “The most powerful part of organizing a network, and also the most difficult part, is letting go of control. We are finding that the magic happens whenever we create just enough structure for people to really trust each other, and staying out of the way enough to let them co-create solutions they need. The network is just so much smarter than we could ever be as ‘experts’ telling local leaders what they should do.”

    — Joe Bartmann, President of Dakota Resources

    OTA

    Several years prior to the establishment of the Learning Network, an effort called “OTA” based in neighboring Sioux Falls, SD drew together creatives into a network from across the North Dakota, South Dakota, and Minnesota. Its story provides a different take on networks and hierarchies within the community development sphere.

    OTA was founded in 2009 by area designer and visionary Hugh Weber, its name a nod to the last three letters of its member states, North Dakota, South Dakota, and Minnesota. A self-described “for-purpose organization”, it focused on “sparking transformation through creative connections and collisions through ND, SD, and MN”.

    In practice, it did this through convening 11 large-scale events, hosting over 150 national thought leaders, commissioning 35 micro-documentaries and a full-length feature, and investing sub grantee funds in the creatives who call the region home.

    While the outcomes and journey of OTA is a topic for another time, its end-of-life process indicates a crucial point about networks. OTA, in many respects, operated in many ways as a startup network. It was agile, vibrant, and loosely structured around the energy of Hugh, collaborator Angela Tewalt, and core contract services. However, its dynamism as a network did not lead to an ongoing presence today, an intriguing final note for an entity that had considerable impact on the “OTA” region it represented.

    Having experienced OTA firsthand, I also believe the claim of “… key directional changes can often be made at the edges of the organization” is also applicable here. The power of OTA was in its vibrant, network-based nature, guided by lodestar talent and charisma. It was vibrant, flexible, and innovative. It was, in-essence, a sustained startup network. If a group of perhaps 6-12 OTA representatives had wanted to champion a direction for OTA in those final weeks, I believe they would have found a strategic environment able to be shifted.

    The answer to why OTA did not continue is conjecture for another day. However, it would be remiss to not recognize that the very design that made it so resonant also presented inherent design challenges when looking to models for its future.

    In summary, understanding system design, its limitations and strengths, and present examples can provide context to those charting strategy in today’s leadership. Additionally, despite being a relatively low population state, South Dakota is, was, and continues to be, home to a variety of innovative systems design leaders in the community sphere. Forward-visioning organizations like Dakota Resources and entrepreneurial minds like Hugh Weber have provided, and will continue to provide, an organizational tapestry that assists us all in understanding complex organizations in our ever-complicating world.

    Questions for Discussion

    • What can we learn from these South Dakota examples of networks and organizational systems?
    • How can better understanding systems design and change better enable today’s leaders?
    • What have you learned here that can push your organization towards innovation and change?
    • Is there a piece of this subject that you would like SDSU Extension to explore in future articles?

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