Hierarchies are very good at aggregating effort, at coordinating the activities of many people with widely varying roles. But they are not good at mobilising effort, at inspiring people to go above and beyond. When it comes to mobilising human capability, communities outperform bureaucracies. This is true for several reasons. In a bureaucracy, the basis for exchange is contractual – you get paid for doing what is assigned to you. In a community, exchange is voluntary – you give your labour in return for a chance to make a difference, or exercise your talents. In a bureaucracy you are a factor of production. In a community, you a partner in a cause. In a bureaucracy, ‘loyalty’ is a product of economic dependency. In community, dedication and commitment are based on one’s affiliation with the group’s aims and goals. When it comes to supervision and control, bureaucracies rely on multiple layers of management and a web of policies and rules. Communities, by contrast, depend on norms, values and the gentle prodding of one’s peers. Individual contributions tend to be circumscribed in bureaucracy  – marketing people work on marketing plans, finance people run the numbers. In a community, capability and disposition are more important than credentials and job descriptions in determining who does what. And where the rewards offered by a bureaucracy, are most financial, in a community they are mostly emotional. When compared with bureaucracies, communities tend to be under managed. That, more than anything else, is why they are amplifiers of human capability.

Before you accuse me of me being a starry eyed idealist, or just plain goofy, let me be clear: I am not arguing that we turn every organisation into some version of the Boy Scouts. I’m not naive. I know it will be impossible to keep people coming back to work every day without the inducement of a pay check – warm and fuzzy feelings will not put food on the table and gas in the car. But hers an interesting thought experiment: suppose you knew in 12 months time, a looming financial crisis would force you to cut the salary of every employee of your company by a third. Assume further that your company is running very lean and that every associate is making an indispensable contribution. Now, if the goal is to minimise risk of a mass exodus  when the financial crunch finally hits, what changes would you  make over the next few months to keep your colleagues from jumping ship? Take some time with this question, be creative. My guess is that the changes you ultimately envision will be precisely those that would make your company feel less like a hierarchy and more like a community.

–          Gary Hamel from ‘The future of Management’’