Editor | On 05, May 2018

Darrell Mann

One of the most frequent questions we receive regarding the TrenDNA book is, ‘why are you predicting the demise of command-and-control organisations?’ The prediction appears counter-intuitive, especially, perhaps, in light of the current economic and political turbulence which appears to suggest, if anything, the precise opposite. The prediction is actually more about the demise of command-and-control enterprises relative to organisations that successfully embrace the complexities of the world and create self-organising solutions.

Counter-intuitive they may be, but it feels like the self-organisers of the world are already making significant inroads into the traditional, hierarchical world of command-and control. We’re living a really good example at the moment with one of our clients in the world of tourism. Specifically, a top-end-of-the-market hotel chain. They’re a classic hotel business, with several thousand employees distributed across their several hundred hotels. Part of our role has been to help in the process of reducing staff turnover and increasing innovation capability. Training several thousand employees about the values of the organization is an expensive and time-consuming business. And every time the hotel looks to expand and open a new hotel, it brings with it a whole new set of fixed and variable costs.

One might ask what all this training about? What are the employees being trained to do? Deal with customers? Or help make sure the hotel turns a profit?

Here’s the situation I experienced as a customer last time I checked out of one of the chain’s hotels: I’m met at the reception desk, as usual, by a happy smiling face. The smile looks kind of genuine as I’m asked whether I had anything from the mini-bar. ‘No,’ I answer. Still smiling, the receptionist picks up the house phone and calls someone. This is what the procedures require receptionists to do. Someone from housekeeping is heading to my room to check that I have indeed not taken anything from the mini-bar. I spend the next two minutes looking at the receptionist as we both wait in anticipation for the confirmation that I have indeed been telling the truth. By the time the awkward silence ends, her smile is beginning to appear a little forced and I’m reasonably frustrated. Not with the poor receptionist, or the poor soul that’s been summoned to my room to check on my minibar, but with the hotel operating protocols and systems that assumed each guest was a potential minibar thief. I’m assuming, when I say this, that the same happened to every guest, rather than just me – or maybe the hotel protocol identified me as a suspect individual, you never know. Either way, what the staff training has been about is ultimately, I think, about managing the conflict between customers and profit. If I’ve stolen from the minibar, the profit of the hotel is reduced; if they wrongly imply I might have taken something from the minibar, I feel less inclined to stay at that hotel next time I’m in town.

This is classic command-and-control behavior. What’s being commanded and control is trust. Or rather the absence of trust.

Compare this to what happens with a typical AirBnB transaction. Let’s say I decide that I don’t like being accused of being a thief by the hotel chain any more and I decide to go and stay with someone close by that happens to have a spare room in their house. I get to choose from a whole bunch of alternative rooms, annexes, and even whole properties in the near vicinity:

I get to see an immediate tangible benefit since every option looks to be less than half the price of the hotel. I also get to see a whole bunch of information about, not just the room, but what previous guests have said about the host. Is the host a nice person? Are they trustworthy?

Then, the same thing happens the other way around. If I get in touch with a potential host and express an interest in staying with them, the prospective host gets to see a whole bunch of things about me. Am I a nice person? Am I the sort of person that is likely to steal chocolate and beer from their fridge? In other words, how trustworthy I am.

AirBnB is an organization that understands complexity and builds their business model around embracing that complexity. They are the opposite of command-and-control. The system self-organises because it is full of feedback loops that ensure all of the players have access to the important information they need. There’s no need for expensive training in how to treat customers, because, taking away the customer-provider relationship and replacing it with a human-human relationship means that we play by human rules and not corporate ones. Humans know that in order to be accepted by other humans you have to be trustworthy, you have to play fair, and you have to ‘treat others and you’d like them to treat you’.

Eighteen months ago, my hotel chain friends didn’t even have AirBnB on their competitor radar. This year, it looks like they’ll lose something close to a third of their business to the upstart.

This is what command-and-control versus self-organisation looks like. AirBnB, ebay, Uber, Lyft, Zopa, and any other peer-to-peer business that understands and operates itself as a self-organising, trust-based system eat the lunch of their command-and-control contemporaries.

Self-organisation always beats command-and-control.

But – of course – there’s always ‘the next contradiction’. It’s very easy for AirBnB and other peer-to-peer upstarts to embrace complexity because they have nothing to lose. The problems start to appear once they become big. And start to have very un peer-to-peer like management structures. And shareholders. They start to build internal command-and-control structures because they start to have a lot to lose. The DNA of the business shifts. Margins have to be maintained. Profit targets have to be met. Share-prices have to be managed. We can already start to see it with Uber. The first signs of command-and-control start sneaking in and all of a sudden customers begin to sense they’re a part of nothing more than a whopping great Ponzi Scheme. The exception starts proving the rule.

Customers, it seems, understand ‘self-organisation’ far better than the corporate world.

It may already be too late for Uber, they’re already starting to live out the urban transport version of Orwell’s Animal Farm. All stakeholders are equal, but, thanks to a creeping evolution back to command-and-control, some are very definitely more equal than others.