Leading into the Future XIa: Can the Center Hold Given the Challenge of Size and Complexity?
This is the first essay in a series of sets (each with multiple essays). Each of these set of essays focuses on a major 21st Century challenge facing those who will leading into the future. This first set is concerned with the way in which leaders address the issue of organizational size and complexity. While there is gradual, organic growth and minimal complexity in most premodern organizations, the postmodern organizations to be found in most contemporary societies are subject to rapid change and rapid growth; furthermore, they have become complex as a result of attempts to accommodate this change and growth.
We find that many premodern organizations (that are still predominate in most societies) are family owned and operated. The corner grocery story, prestigious restaurant, summer camp, independent insurance company, successful real estate development company or sports team—these are often owned by a family (be they small or large). Typically, this organization has grown slowly and organically, with it being no larger than the size of the family. Until the daughter or son is ready to take over the business, it will only grow so large. The structure of this organization is quite simple: it operates more like a family than a corporation. Nepotism runs supreme and lines of authority are clearly and consistently drawn.
We can similarly compare the postmodern organization of the 21st Century with the modern organizations that dominated the late 19th Century and most of the 20th Century. Driven by the Industrial revolution and the evolution of mass marketing, the modern organization—usually formed as a legal corporation—was engaged fundamentally in the process of growth. The success of a modern corporation was determined by its size (usually as measured by total capital, size of work force and number of production facilities)—along with its market share.
Ultimately, size and market share translated into profitability and return on investment for the corporate stockholders. The “bottom line” was readily determined based on these readily measured parameters. These modern organizational dynamics contrast with the gradual and often reticent growth of premodern, family-owned businesses. As I will consider in much greater depth, when addressing a second major challenge, the criteria of success in the premodern organization and among the leaders of these organizations is often much more nuanced than are the criteria used by corporate leaders and stockholders. How do you measure the quality of food being served, the quality of a child’s experience at camp, or the beauty inherent in the new building just constructed in your downtown (or the impact of this building on the pride taken by those living in your community). And what about the impact of your family-owned baseball team