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The Internet had changed the nature of companies within as much as it has changed marketplace conditions without. Traditional hierarchical organisations, the logic went, were in deep trouble. At the heart of the new thinking lay a fundamental irony: the new model of management was in some respects a return to the pre-industrial artisan system, a return to the days before Fredrick Taylor. Taylor, the father of management consulting, created a new, scientific approach to management in the early 1900s. In his book, The Principle of Scientific Management, he argued that apprenticeships and the irregular word-of-mouth process by which workmen in the pre-industrial age learned their trades created and unmanageable workforce of artisans. Managers, incapable of understanding the full breadth of individual skills within their workforce, were forced to rely on the initiative and experience of the workers. Managers were forced to use special incentives such as improved conditions to gain their workers’ goodwill. The answer, Taylor suggest, was the standardisation and centralisation of the accumulated lore that had been passed down from generations of apprentice workmen. Best practice studies could codify all workers’ knowledge into standardised procedures. Personal initiative would then become immaterial and the artisan workforce would simply become directed labour. White-collar managers, now fully versed in the procedures for every task, would instruct and supervise the workforce in every specific task. Taylor’s model, thought it set the stage for management of specialisation, had become outmoded by the 1970s as lower levels of management and units within organisations were given increasing levels of responsibility. Only during the ‘new economy’ did initiative within organisations reverted back to the level of the individual. Workers at the beginning of the new century would be artisans again, as they had been at the beginning of the last one, albeit the digital one.
https://www.youtube.com/watch?v=slfFJXVAepE
The dot-coms like Google, where the old hierarchies were less pronounced, were widely thought to represent a new paradigm suited to the new, fast economy. The disjointed, varied wisdom of employees was no longer a threat to management. The lowest atomic unit of effective creativity within an organisation became the individual employee, not the unit, or the division. Companies would prosper or fail on the strength of their employees’ initiative and how well superiors could leverage the wisdom of their workforce. The system of incentives that Taylor had railed against was back too. During the dot-com boom workers were offered stock options as incentives at levels so unprecedented that the Federal Reserve could not account for them in its tax intake.
The empowerment of digital artisans owed much to the collaborative, irreverent hacker ethos that had evolved at MIT’s RLE laboratory in the 1960s and 70s in which people at the bottom of the hierarchy could contribute at the highest level. The MIT hackers were driven by the compulsion to better understand and optimise software and computers. In the service of their compulsion, conventions of property, privacy and hierarchy were immaterial. The hackers violently reacted against any hint of bureaucratic intervention or central control. The idea that such a hacker workforce could be managed in any rigid sense was untenable. Some of this approach transferred to the private sector by way of the Digital Equipment Corporation, which spun off from the MIT Lincoln Laboratory in 1957. Employees at DC were given leeway to do ‘the right thing’ and pursue approaches as they saw fit, even if their managers disagreed.
This bottom-up approach to management was codified at Google where the ’70-20-10′ rule encouraged workers to expand their roles and liberated them from the narrow constraints of specific duties. Employees would spend 70% of their time working on the task at hand, 20% on exploring new related ideas, and 10% on ideas bordering on the crazy.
Like the hackers, the business of the ‘new economy’ embraced an approach to inputs and organisation. This new approach was what management gurus Tapscott and Caston had called ‘open networked organizations’ in the early 1990s, and what one Harvard Business School professor more vaguely called ‘permeability’ almost a decade later. The example of the open-source movement in the 1990s and of Wikipedia in the 2000s had provided working proof that useful ideas and collaboration could come from virtually any source.
Perhaps the most dramatic example of the dramatic shift towards the open, collaborative approach within organisation that had previously been bastions of closed hierarchies is that which occurred within the US intelligence community from 2005 onwards. The 9/11 Commission reported that insufficient information sharing has contributed to national vulnerability. In 2005 the chief technology officer for the Central Intelligence Agency’s Centre for Mission Innovation, D. Calvin Andrus, wrote an influential paper titled ‘The Wiki and the Blog: Toward a Complex Adaptive Intelligence Community’ in which he made the case that a Wiki system shared between the various intelligence agencies would solve the problems facing intelligence community:
Once the Intelligence Community has a robust and mature Wiki and Blog knowledge sharing web space, the nature of Intelligence will change forever. This is precisely the prescription we’re looking for.
By 2009, when Time Magazine covered ‘Intellipedia’, the product of Andru’s concept, it had ‘grown to a 900,000-page magnum opus of espionage, handling some 100,000 user accounts and 5,000 page edits a day.