Of Pyramids and Pancakes

Posted on Nov 24, 2010 | 7 Comments

At last week’s Global Drucker Forum in Vienna, Josephine Green – formerly the senior director of Trends and Strategy at Philips Design and currently a consultant at Beyond 20– argued that we are witnessing the “death of hierarchy.”

The worldview reflected by the classic, Industrial Age, hierarchical pyramid with power concentrated at the top, according to Green, is “bankrupt.”

“It made sense in one era,” she said. “It is now increasingly making nonsense.”

In place of the pyramid, Green offered the “pancake” model of society and organizations, a flatter structure more suited to our decentralized, chaotic and complex era.

The pyramid, said Green, is characterized by standardization, a desire to predict and control, and a belief in scarcity that elevates competition as “the supreme principle of how our society progresses and grows and moves forward.”

But Green believes “we have left this world behind” as a result of advances in technology and social networking. “People have come out of their boxes,” she said. They are producers, not just consumers, and have put themselves at the front end of the innovation process, leading to a world in which “more really is more.”

To manage effectively, Green said, we have already switched to a new governance model, abandoning the hierarchy of the pyramid for the collective inclusiveness of the pancake.

Peter Drucker saw the virtues of both pyramids and pancakes – depending on the situation. In his 1999 book, Management Challenges for the 21st Century, Drucker maintained that “in any institution, there has to be a final authority . . . someone who can make the final decisions and who can expect them to be obeyed.” At the same time, in a 1989 lecture, he recognized that with the ever-increasing flow of information, “you will get much flatter organizations, which will also be organized far more on the basis of direct responsibility.”

In the end, Drucker thought it was best to be flexible. “There is no such thing as the one right organization,” he wrote. “There are only organizations, each of which has distinct strengths, distinct limitations, and specific applications. It has become clear that organization is not an absolute. It is a tool for making people productive in working together. As such, a given organization structure fits certain tasks in certain conditions and at certain times.” Drucker went on to say that, “in any one enterprise . . . there is need for a number of different organization structures coexisting side by side.”

So how does it work in your organization: Is hierarchy dying – and what are the pros and cons of what you’re seeing?

Is your organization modeled on a "pyramid" or a "pancake?"

7 Comments

  1. Richard
    November 24, 2010

    Great discussion points. Where can one get more background on the evolving pancake model? Having worked in and with many pyramid models the premise of technology, communication and social networking make a lot of sense in the modern organization – that Drucker would often refer to in future terms. Thanks’

    Richard

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  2. Alba Patricia
    November 24, 2010

    Preparing an organization with multiple ingredients and steps requires planning and preparation. Baking and apple pie requires peeling and seasoning the apples, preparing the crust and preheating the oven. Pie-making goes more smoothly when the organization has all the things they need at their fingertips. The same can be said about the organization with COMPETITION. When It is prepared, aligned and at one with its structure, they easily and effortlessly achieve its goals.

    Therefore, in their deliberations, when seeking to determine the organizations structure (pyramid and/or pancake), the most important of a competition is chain of command, in where the Manager must be coated for the virtues of wisdom, sincerely, benevolence, courage and strictness. Because the most important to manage effectively operation of a competition, is the VICTORY.

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  3. ed Bantlow
    November 25, 2010

    Back in the 1990′s, AT&T Credit laid claim to an inverted pyramid with the CEO at the bottom. It worked well prior to the sale of that unit at a fantastic profit. The intent was leadership who listened, and decided on the key issues based on as many facts and opinions as possible.

    Drucker’s emphasis on flexibility can be exercised within one organization with greater centralization in some areas where experience is emergent and more pancake like where maturity increases predictability and reduces risk. One of the feedbacks that is often forgotten is freedom to change one’s mind based on facts and feedback. That too comes into play in today’s bets run organizations.

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  4. Josephine Green
    November 29, 2010

    I am really happy that Lawrence was generous enough to add a piece on Pyramids to Pancakes and so start a fruitful debate. Great. I am posting here a couple of pages for those interested to hear a litle more. Here goes….

    Pyramids and Pancakes
    From scarcity to abundance

    We are experiencing a change of age from one way of thinking, of acting and of being in the world to another. Such a radical worldview shift is being driven by the transformation of the socio-techno-economic and environmental context. Returning to the way we were is not an option; on the contrary there is a need to make an evolutionary leap in order to prosper in the future. Such a leap encompasses three aspects, new growth, new innovation and the distribution of capacity and creativity throughout the system.

    There is a shift from the techno-market driven growth of the 20th century to the socio-ecological growth of the 21st. Pressing social challenges such as ageing, chronic illness, climate change, unemployment, will determine the next generation of demand and growth. Unlike consumer product driven economies, social economies based on social solutions and social innovation are systemic involving many different actors and stakeholders. Such interaction and connectivity between many players leads to non predictable and constantly evolving complex systems that are increasingly difficult to control and manage through centralized processes and functions. This difficulty is re-enforced by the fact that our latest worldview, the one that has sustained us for more then 200 years, based on linearity, industrialism and materialism has given way to the new worldview based on complexity, digital technology, systems and networks.

    This 21st century worldview is now at odds with how we structure and run our organizations. Such organizations, be they big corporations, schools or public sector institutions, are based upon fairly simplistic, authoritarian top down hierarchies. These pyramid organizations rely upon command and control to get things done. Unfortunately and increasingly, the right things are not being done. Their management through administrative systems installs ever higher levels of micro management, accountability and targets in an effort to standardize and control complexity. In so doing they marginalize what society now needs most; initiative, creativity, innovation and risk taking. Rather than controlling complexity we must now learn how to embrace it.

    The reality is that the exponential complexity of the pancake world cannot be controlled. The pancake culture relies on networks, openness, collaboration, freedom and continuous learning. It is not about doing things to people or for people but about doing things with people and ultimately by the people themselves.

    Consequently there is an urgent need to free up capability and creativity in the system by decentralizing the main functions, including strategy, innovation, education and design and by distributing and enabling the capacity for continuous experimentation, learning, agility and adaptability. In this way we can counteract the funnelization of cumbersome bureaucracy and lay the foundations of a more human, inclusive, enterprising and resilient society. In essence the pancake culture thrives on letting go.

    There is a genuine fear that this shift from a pyramid way of doing things to a pancake way will lead to chaos. Yet there is in all this a paradox because in chaos and complexity there is in fact simplicity. Science shows us that underlying the complexity are a few simple rules. Over millennia, in evolutionary terms, nature has constantly replicated itself so that from the original source, through a mirror feedback loop, many different patterns emerge constantly replicating the original but also constantly changing and adapting. A few basic rules set off a complex emergent process of self organizing growth and constant adaption. Nature in this way teaches us that diversity is evolutions way of constantly adapting and ensuring resilience and robustness. Such is the metaphor of the Pancake world. We are or have reached a tipping point whereby the Pyramid structure can no longer control and regulate complexity. The pancake world is diverse, fluid, emergent and out of control. It is therefore also about letting things happen, and having the ability to act with agility and creativity in the moment, rather than trying to always predetermine and control exactly what happens. It is also worth remembering that Generation Y in fact wants less hierarchy, more open organizations, less control and are not scared of the future. Because some of us are scared of the future does not mean all of us are! Perhaps their lack of fear is in part because they intuit a far more optimistic future based not on scarcity but abundance. A world of more is more rather than less is more.

    Letting go and enabling more empowered, connected, self confident and self directed people to do more things opens up the possibility of a future world of abundance rather than scarcity.. More people doing more things, collectively, equals more exponentially. This dramatically goes against our belief system that there is not enough to go round and that the world is based on the principle of scarcity. It is this belief that drives the hierarchical pyramid values of competition, winners and losers and excessive individualism and self interest. Such a belief system is given credence through the popular view of evolutionary theory, Darwinism and the survival of the fittest. However, evolution did not only give us the instinct to fight and to compete, it also gave us the instinct to collaborate, to share, to care and to love. If scarcity is redundant in the pancake world then perhaps it is now time for us to make an evolutionary leap towards the abundance inherent in collaboration and cooperation

    More people doing more, supported and enabled by consistent funding, new economic models and metrics, new governance models and new development models, could turn scarcity on its head. Furthermore do we in fact have scarcity at all or do we have a lack of political will on the one hand, a lack of relevant organization on the other and a very big problem of ownership and distribution? Too few having too much, both in individual countries and between countries, is not scarcity.

    Could it be, therefore, that the death of hierarchy also signals the death of scarcity and the death competition, not in absolute term, but in terms of its elevation to the driving principle of our worldview and of how we are in the world. Competition is born of and perpetuates scarcity. Collaboration is born of and perpetuates abundance. Herein lies an evolutionary leap

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  6. Who’s the Boss? | The Drucker Exchange
    March 19, 2012

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  7. Is hierarchy in an organization inherently bad? | Stern SCoReS
    March 20, 2012

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