The Future Of Organizing Is All Around Us
Our mindsets keep it hidden in plain sight.
This post is part of a new series called “B-Sides”. Launched as an experiment part of the upcoming Whitepaper, B-Sides gathers contributions from members of our community in order to explore ideas emerging within and at the edges of the Boundaryless ecosystem. The concept? Think of B-Sides Stories as a metaphor for the backside of a vinyl record where all the good, unexploited stuff is hidden.
In this post, the author David Kish — an active Whitepaper community contributor since the start — connects the social evolution framework of Spiral Dynamics with fractalness and Platform Thinking.
Enjoy reading! If you want to know more and provide with with further ideas on how to develop the B Sides project, go here: https://platformdesigntoolkit.com/B-Sides-ideas-survey..
“Nature runs on sunlight.
Nature uses only the energy it needs.
Nature fits form to function.
Nature recycles everything.
Nature rewards cooperation.
Nature banks on diversity.
Nature demands local expertise.
Nature curbs excesses from within.”
-Janine Benyus
The Ecosystems are the future series I wrote back in 2015 was triggered by me asking myself: “What’s the future of organizing in a hyper-connected world?” I wondered how we would organize as rapidly emerging technologies connected everyone and everything. It was easy to foresee the emergence of ecosystems if, for no other reason than how pervasive platforms were becoming. But I felt back then as I do now, that the catalysts and barriers to the future of cooperative organizing would be more human than technological. I had no idea that my journey into the world of ecosystems would lead me from studying the complexities of the human mind to examining complexity in nature’s living systems.
Mindsets Drive How We Organize
My research into human organizing first led me to the developmental psychology framework Spiral Dynamics (SD), and it helped me understand that organizations are constructions of the mind. When Don Beck and Chris Cowen authored their seminal work on Spiral Dynamics, they set out to apply the work of psychologist Clare Graves to “the enormous economic and commercial shifts making contemporary business practice so complex and fragmented.” Beck and Cowan found that:
“Organizations are constructions of the mind. Words printed on wall charts, symbols of rank worn around the neck, and spaces occupied as manifestations of power are but artifacts and icons. The real connections are within profiles of people, those invisible webs that order society and snare relationships. We carry them in our heads every waking moment.”
Suppose the essence of organizing is within the minds of those organized. In that case, understanding how we humans develop, evolve, and adapt to our environment holds the key to foresee how we will organize in the future. To demonstrate how mindsets influence organizing, I’ll share a question I like to ask someone when discussing organizing in ecosystems. I ask them why they believe ecosystems (as future organizing structures) are emerging now. Their responses tell me a lot about their mindset and what motivates them about ecosystems. Responses typically fit into one of the categories below:
- With the advent of the internet and connected technologies, ecosystems are emerging because business is innovating new platform models that remove market friction, achieve network effects, and enable non-linear, exponential growth. [orange/prosperity mindset]
- Ecosystems are emerging because the internet has enabled the human desire to connect, share, and cohere in communities. Ecosystems are emerging because business has determined how to monetize community data and peer to peer connections. [green/community mindset]
- Ecosystems are emerging because (insert any escalating global crisis) requires us to cooperate and develop global solutions that improve human well-being and sustain our existence. [yellow/interdependence mindset]
- Ecosystems aren’t emerging now. We are just becoming aware that everything in the universe has always been a unified ecosystem. We are just learning now to behave collectively, but it has always been our nature to do so. [turquoise/holistic mindset]
Each mindset gravitates toward a particular organizing structure that emulates what it values most. For instance, the orange/prosperity mindset values competition and achievement and structures in matrixed hierarchies. The green/community mindset favors equality and typically relates to each other in a network. The yellow/interdependence mindset prioritizes inclusion and organizes as a hive or cooperative of co-members/owners. Lastly, the turquoise mindset views everything as a collective whole and organizes as a holarchy, which I describe further below.
The Turquoise Mindset And Organizing
The turquoise mindset can be difficult for people to wrap their heads around. With foundations that go back thousands of years in eastern philosophy, it can project a mysterious, mystical quality that seems hard to apply in day to day life. Turquoise embraces the idea/belief that we are all simultaneously autonomous parts and a single holistic organism. This simultaneous part/whole organizing structure is referred to as a holarchy. A holarchy is a hierarchy composed of units called holons. A holon is simultaneously a part of the holons higher than it in the hierarchy and a whole to the holons below it. For example, human lungs are holons that are simultaneously a part of the human body and a whole to the tissue, cells, and molecules that comprise them.
Turquoise Structures Exist Everywhere In Nature
As our collective understanding of organizing develops, turquoise structures are becoming less mystical and more scientifically sound. The emergence of the energy network sciences (ENS), which study organization in nature’s complex systems, indicates that the future of organizing may well be all around us in plain sight. And it’s less about us humans innovating a new way of organizing than realizing and adopting the structure of how everything sustainable has always been organized.
ENS seeks to apply the universal principles of flow found in nature’s ecosystems to human socio-economic networks. Flow refers to how anything (electricity, water, oxygen, money, resources, information, etc.) circulates among participants in a complex system. Nature’s ecosystems optimize flow for all participants to make the entire system resilient and sustainable. They do this through a self-feeding return loop that balances flow across a few large, efficient entities and many small, diverse entities.
Balanced Flow Creates A Fractal
This balanced process of efficiency and diversity can be seen widely in the similarity of natural structures known as fractals. A fractal pattern appears in any system whose structure repeats itself similarly at every scale throughout the system. For example, a tree is a fractal because its branching pattern is identical throughout its structure. A tree balances efficiency and diversity through a few, highly efficient, large conduits (i.e., trunk and lower branches) near its base and successively more diverse, less efficient, smaller conduits (i.e., limbs) on top. This structure optimizes the flow of water and nutrients from roots to limbs in one direction and maximizes the roots’ exposure to sunlight in the other direction.
Other examples of fractals in living systems include broccoli and human lungs, where branching structures optimize the flow of nutrients and oxygen. Fractals also appear in non-living systems such as river networks and lightning bolts, where branching structures optimize water and electricity flows, respectively.
You may have noticed that the side view of a holarchy looks surprisingly similar to a fractal. That’s because holarchies are fractals. Despite this resilient and sustainable pattern of organizing that appears everywhere around us, we humans have consistently structured ourselves as separate and siloed throughout history!
What Fractals And Flow Teach Us About The Future Of Organizing
Fractals and flow teach us that a balance of efficiency and diversity is essential to human systems’ long-term health. This dynamic is explained succinctly in Using Energy Network Science (ENS) to connect resilience with the larger story of systemic health and development.
“Economies need diversity of options (resilience) to provide choice, competition and fallback options in case a main industry should fail, but economies built almost solely of diverse, small-scale businesses tend toward stagnation because they lack the efficiency, focus and power to generate robust flow. Similarly, [ ] economies built primarily of extremely large, highly efficient organizations tend toward concentration, brittleness and loss of resilience because such organizations tend to create “positive feedback cycles”, [ ] that drain money and resources from the smaller organizations, thus eliminating diversity and making the system more fragile.”
The Turquoise, Fractal Future Of Platform Ecosystems
Let’s return to the question that led me down this fractal path — “What’s the future of organizing in a hyper-connected world?”. As connected technologies transform value chains and dissolve boundaries across traditional industries, platforms are emerging as a dominant force in the future of organizing. In fact, seven of the ten most valuable companies in the world are platform companies.¹ Applying turquoise thinking to the platform space, one can see a fractal pattern emerging. To demonstrate, I’ll leverage the Unified Digital Market Theory (UDMT) created by Boundaryless, which explains how value chains evolve from traditional industries into platform ecosystems. UDMT categorizes markets and value chains into three areas, summarized in Cicero’s triangle:
- Infrastructure providers that make essential components cheap and ubiquitous;
- Aggregators that utilize platforms to become trusted advisors that connect producers and consumers;
- And the long tail, which comprises a diverse mix of niche providers who create a near-infinite variety of specialized experiences for interest-based communities.
The theory suggests that incumbents will experience pressure on cost as infrastructure becomes concentrated and pressure on differentiation as long tails become fragmented. That leaves aggregation as the most attractive strategy. Aggregation strategy has driven the emergence of enormous algorithm-centric platforms like Google, Facebook, and Amazon that facilitate hyper-efficient connections between producers and consumers.
In flow theory terms, one can see how Cicero’s triangle depicts the efficiency and diversity aspects of a fractal.
To date, ecosystem strategy has centered primarily around the lower half of the fractal — that is, creating a defensible, algorithm-centric platform that generates network effects and exponential growth. This strategy has proven to be very lucrative for FAANG companies like Google, Facebook, and Amazon, but very risky for countless platform initiatives that have failed to emulate them.² Yet, flow theory suggests that complex systems that are too efficient will eventually collapse if value flows cease to circulate robustly among the diverse portion of the fractal. And we are beginning to see a move toward diversity that balances the FAANG companies dynamic that has dominated platforms to date.
Vertical Marketplaces, Micro-enterprises & Community-centric Ecosystems
Three diversity trends are emerging to build out the upper reaches of the platform ecosystem fractal. The first two represent ways diversity arises out of competitive market opportunity while the third trend highlights a shift toward emphasizing the role that community plays in ecosystems.
Managed & Vertical Marketplaces
In a recent research update on the future of organizing, Platform Design Toolkit founder Simone Cicero describes the emergence of managed and vertical marketplaces that provide unique, personalized experiences. These marketplaces emerge when algorithm-driven horizontal marketplaces become too large to satisfy the variety of their growing user base’s unique needs. Andreesen Horowitz partners Jeff Jordan and D’Arcy Coolican elaborate:
“In all but a few circumstances, the broad horizontal verticals eventually break. They become a victim of their own success. As the platforms grow, their submarkets grow too; their product gets pulled in a million different directions. Users get annoyed with an experience and business that caters to the lowest common denominator. And suddenly, what was previously too small a market to care about is a very interesting place for a standalone newco. Like clockwork, a new wave of innovation begins to swell, picking off the compelling verticals the new horizontal players cannot satisfy.”³
Managed and vertical marketplaces are a natural evolution toward diversity resulting from the need to better serve the specialized needs of rapidly fragmenting markets.
Micro-enterprises
Micro-enterprises represent another shift toward diversity. A micro-enterprise is an autonomous entrepreneurial team that’s corporate-funded and empowered to collaborate across organizational boundaries to serve customers. This model was pioneered by Chinese giant Haier, which transformed itself from a centralized hierarchy to a decentralized network of 4,000 micro-enterprises. Haier did this to adapt better to rapidly changing markets and to motivate its employees to be entrepreneurial. Micro-enterprises complement platform aggregation strategy and are a natural competitive response for organizations to keep pace with the network effects of open innovation. They also foreshadow the dissolution of corporate structures: as industries transition into ecosystems, the boundaries of their components (i.e., corporations) are dissolving also.
Community-centric Ecosystems
In addition to the diversity that’s emerging out of networks of small, adaptive, and vertical/niche-focused organizations, there is also a shift toward the community aspect of ecosystems. In this shift, participants increasingly identify with the ecosystem over themselves or their organization. This mindset emphasizes the value of relationships and the community rather than viewing the ecosystem simply as leverage for competitive advantage. I’ve previously likened this identity shift to a redrawing of one’s circle.
“A simpler way to define an ecosystem is to imagine drawing a circle around the individuals, organizations, and things that share or complement your interests. Why you draw your circle and how big you draw it depends largely on your mindset. [ ] All of [our] interests involve interactions within and across organizations, industries, or multiple sectors of the economy. Yet, how we define “our circles” influences how effectively we interact to create value.
This broadening of how someone defines their circle (and community) is not only emerging within nascent movements like commons-based peer production, blockchain, and platform cooperatives. It is also taking hold in mainstream businesses like Chobani, Shopify, NER Group, Buurtzorg, and Communo. Members in these ecosystems view themselves as caretakers of their community, rather than value chain optimizers and marketplace facilitators.
The Future Of Organizing
The moral of this story is that the future of organizing is the same as it is today and has always been. The countless number of ecosystems that have persisted throughout history have done so as complex adaptive systems that balance efficiency and diversity and promote the robust circulation of energy, resources, information, and value among participants. In many ways, the future of organizing is a story of human development as we awaken to the timeless wisdom in nature’s structures that our mindsets have kept hidden in plain sight. Our challenge is to overcome the limitations of our own development to embrace these universal principles. As Wes Jackson, founder of the Land Institute and leader in sustainable agriculture, asks:
“How do we act on the fact that we are more ignorant than knowledgeable? Embrace the arrangements that have shaken down in the long evolutionary process and try to mimic them, ever mindful that human cleverness must remain subordinate to nature’s wisdom.”
And we may need to be open to the idea that the future of organizing is something that we can never really know or control. Clare Graves, who spent his life studying human development, summarized what he observed about those with the most advanced thinking about life:
“Sacrifice the idea that one will ever know what it is all about and adjust to this as the existential reality of existence.”
Maybe, the future of organizing is not a model at all. Perhaps, it’s a process of continuous adaptation to the never-ending challenges that arise from life’s conditions in order to go on living.
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