Hierarchy is Fossil Fuel

‘This year we at Sony have been flooded, we’ve been flattened, we’ve been hacked and we’ve been singed [...] but the summer of our discontent is behind us,’ declared the Sony CEO, Sir Howard Stringer.

In 2011, this giant, multi-billion-dollar electronics and entertainment corporation had been beset by problems. There was natural disaster, unnatural competition and social unrest.

Leaderless, invisible attackers outwitted Sony’s traditional hierarchy. Its ability to move from noticing to reacting was exposed as it struggled to see the problems or adapt to them.

Traditional hierarchy has problems at multiple levels.

Traditional hierarchy has problems at multiple levels. Traditional top-down heavy hierarchy has its people locked in boxes of its own creation. Traditional we-all-know-our-place hierarchy never knows whose job it is but always whose job it’s not.

It’s the dominant form of organization despite its problems, costs, frictions and inefficiencies. As a structure it resists learning and institutionalizes self-interested behaviour. Why do your best when your best is likely to cause you problems?

Traditional industrial-age hierarchy was a revolution of sorts when it emerged in its bureaucratic brilliance from the stultifying constraints of leadership-by-birth aristocratic privilege. The old way held back the best and brightest with visible and invisible chains. The new way suggested influence and reward based on merit. And if not merit then on position where professional qualification was the key to each floor of the organizational chart.

Generations have invested their working lives in such hierarchies. Bureaucratic rules have structured the working days, lunch hours and toilet breaks of billions. Layers of managers piled up between boardroom and front-line. Work lives defined in theoretical job descriptions presented by human resources professionals with the best of intentions. Visions, values, missions and behaviours attempt to align intentions with actions and aspirations with events.

And since strategy and structure are so very interdependent, the hierarchy gets in the way of adaptation to circumstance. As a result, change internally in response to change externally can be pitifully, painfully slow. Groups adapt at very different speeds. The difference in speed depends on how effectively their cultures encourage or discourage autonomous behaviour.

Sony struggled with exactly this kind of adaptive challenge. In 2011, a relatively small number of US executives among their 168,000 employees decided to file a lawsuit against one individual – George Hotz, a 21-year-old American from New Jersey.

The company was unhappy that George – voted one of the top overachievers in the world – had outwitted them. He had publicly published his method of getting past the security on the Sony games console. The security had been set in place to stop people using the games console in any new ways that Sony did not directly approve.

Its main benefit to Sony was to encourage sales of new games by stopping pirated games and old games for previous games consoles working.

Nothing is unhackable

Sony’s system had the reputation of being unhackable but, as George explained to the BBC, ‘Nothing is unhackable.’ It was a remarkable achievement that required, according to our young genius, just five weeks. He managed to use hardware to create an insecurity in the console and use that insecurity as a door into the rest of the system. The technique meant he could make the PlayStation do pretty much anything he wanted including running other operating systems and homemade games.

Why did he do it? Curiosity. And a belief in open systems. Sony opted to respond to his idealistic interest by taking him to court.

Well, perhaps in the not-too-distant past, expectation would be for a corporate lawsuit aimed at an individual without billions at his disposal to achieve its aim of scaring him into compliance.

He was alone without corporate back-up. Those without institutional support are easier to crush, so the reasoning goes. The traditional imbalance of power is something that has encouraged lawsuits being directed at the relatively weak.

Corporations have aimed their legal might at grandmothers whose grandchildren have downloaded music and entrepreneurial innovators who have threatened the complacency of markets. But not this time.

Let’s see. There was the blog he started about the legal attacks, the professor at Craig Mellon University who issued a statement supporting Hotz’s right to free speech, and the rap video George posted on YouTube with the defiant lines:

Those that can’t do bring suits,

Cry to your Uncle Sam to settle disputes,

But shit man, they’re a corporation,

And I’m a personification of freedom for all.

What did Sony do this time? Well, somebody decided to force YouTube, through the law courts, to hand over the details of anyone who had viewed George’s videos about the hacking of the PS3. It was a move that was excessive. It was also counterproductive.

Its heavy-handed actions increased further the number of people likely to be unhappy with its actions. And some of those people were supporters of Anonymous, a leaderless movement that uses internet attacks to support its views concerning freedom on the web and elsewhere.

Attracting their attention seems unwise. It is difficult to fight a group without a leader. It was particularly difficult for Sony to win against people not playing by traditional rules or for the same corporate objectives. Those involved didn’t have a profit motive. They were not constrained by hierarchy and could move in a multitude of ways, faster, and in more unpredictably, creative ways than Sony could manage.

The emblem of Anonymous is a headless figure symbolizing their structure as having no one leader. They are a group that emerged in 2003 from discussions on the web-image-sharing board 4chan. They discussed the idea of people working together in an anarchic, distributed global brain.

They imagined a decentralized community acting together in pursuit of loosely agreed shared objectives. This form of organization proved to be remarkably fluid since it depended not on hierarchy but upon more-or-less shared beliefs to determine the ‘who, what, how, where and when’ of their actions. Their shared beliefs include freedom of speech offline and online. These beliefs guide discussion about what, and who, should be defended or attacked. Tactics, methods and targets are discussed and debated yet final actions are left to the individual.

When someone does something in the name of Anonymous they attribute the action to the movement. They do not want recognition individually. The ideals of Anonymous started with something akin to hedonistic, personal freedom yet in time this evolved into an interest in protecting the rights of others – even society. They added the Church of Scientology to the list of targets in 2008, seeking to highlight what they called ‘exploitation of church members’.

By 2009, they had turned their collective attention to the fight for free and fair Iranian elections. They created a support website called Anonymous Iran that allows communication despite government efforts to shut it down.

They have supported the revolutions in Egypt, Syria, Libya and in other countries throughout the Middle East. They have disrupted government websites in all these areas to draw attention to attacks on freedom.

And so when George Hotz was threatened, Anonymous also attacked Sony’s network. Not because he asked or because he was involved. But because the collective mind of Anonymous – the individuals who work loosely together – felt that his treatment was unfair and threatened freedom beyond a single individual.

The attacks by Anonymous from April 2011 demonstrated security vulnerabilities in Sony’s network. They gave someone the opportunity to copy 77 million user names which forced Sony to stop service to gamers for two months. The service disruption hurt its reputation although – as Sony claims – it may have ultimately improved the technology it was using. It has even added 3 million users to the network since the attack.

But their traditional hierarchy still made the wrong move at the wrong time. It was an avoidable misstep by one part of the hierarchy made without thought for the consequences. The collective mind of Sony was not engaged with this decision. The decision was made by a small minority without reference to the whole.

And the layers of decision making throughout Sony meant that it did not even recognize the seriousness of attacks until days after they had happened. The hierarchy survived but the emergent organizational form thrived.

This is not a defence of or an attack on Anonymous. It is impossible to know exactly what is being done by whom – that is kind of the point. Nor is it an argument that traditional hierarchy is dead. It is not. Instead, you should know that hierarchy is not the only – or the most adaptive – form for structuring human collaboration.

Before Sony managed to bring its network back online, it settled out of court with George Hotz. And the boy-genius is working for Facebook, a company that – so far – understands the limitation of hierarchy and the enhanced adaptability of alternatives ◾️

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◾️Read More about Thinking and Adapting Strategically Here