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Network logic Table 1 Organisational forms and their associated exchange rates Organisational form ABCs of exchange Market Disinterested, non-repetitive Hierarchy Routinised by a governing authority Network Mutually interested, repetitive shared among those in authority. Therefore, organisations and their governance are directly shaped by only hierarchies and networks. In broad strokes, these organisational structures can be distinguished by a very simple rule of thumb. First, in a hierarchy one person can perform the work of one: work is directly related to the job assignment – one for one and one for all; second, in a network shared collective intelligence is exponential: two people can perform the work of four. This multiplier effect is a result of the leveraging of individual efforts through bonds of mutual trust and reciprocity, as evidenced by sturdy hunter-gatherers who daily survived overwhelming ecological odds through cooperation. Small groups everywhere share this ancient and larger-than-life capability with their Kalahari counterparts. Reciprocity is key to the power of networks, exerting a governing logic over them – the alchemy of mutual give and take over time turning to a golden trust. Primordially, trust was determined through face-to-face interactions, and to a large extent is still today. Therefore one needs to appreciate the profound truth that the face of trust is still a human face, a face that can mask a fundamental fear of differences. The stark truth about trust is that if you don’t look like me, or dress like me, walk or talk like I do, then I am not likely to know or understand you. This fetish for the familiar is fundamentally tribal and resistant to diversification. 10 A network of trust is the real invisible hand behind every act of deceit, fraud and betrayal. Trust is the caress of forgiveness and friendship, the unshakeable grip of family or tribe. 40 Demos
Towards a theory of government What happens when networks and hierarchy are misaligned? A bureaucracy is the logical but unfortunate result. Bureaucracies write over their past wrongs, exacting obedience by methodically numbing collective consciousness through the destruction or stoppage of careers. In fully mature bureaucracies, two people perform the work of one-half. This is the real truth behind budgetary shortfalls. So whether you are a hunter-gatherer or hunting and pecking your way through a bureaucracy, you are operating as you would in a network, not a market or hierarchy. Transactors and transactions change all the time in markets and hierarchies – in markets because the transactions are disinterested and non-repetitive, and in hierarchies because they are routinised regardless of who performs them. Although hierarchies are lauded, we’ve all heard the laughable refrain, ‘I’ve worked for five heads of department!’ Staying power is found not in who’s at the top but in who’s in the network. Ramifications for government Human networks have evolved from bands, tribes, ‘segmentary lineages’ and chiefdoms right up to the modern state. Government operations betray the signs of this evolutionary heritage, strikingly similar to a ‘segmentary lineage’ system. 11 When policies change or new needs arise, teams are created not from the ground up, but as sub-units of existing segments. As layers of hierarchy proliferate, units at each layer compete against one another, combining to work as a larger unit only when these too are drawn into competition. So within a government department one team jockeys for position with another, one directorate attacks another to protect its budget, and the department as a whole fights other departments to defend its turf. In these systems there is no internal structure or infrastructure to join the system as a whole; it is simply a network of hierarchies (vertically integrated silos). As such, they are never more than (and are often less than) the sum of their parts. Segmentary systems calculate power by comparing and contrasting their stock or status with that of other segments. Competition, not collaboration, is the watchword. Demos 41
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