The Difference between a New Theory and a Paradigm Shift

Traditional organizational structures are based on mechanical models of organizations from the Frederick Taylor days of industrial management and leadership. As late as the 1960s, the literature surrounding organizational structure described it using mechanical language—cogs on a wheel. While the mechanical command-and-control leadership models are still alive and thriving, technology has forced us to confront a new reality—organization structures cannot be understood in purely mechanical terms. There is a natural order to the flow and structure within an organization that now calls for correction and a fundamental shift in the understanding of leadership. It is a shift to a model where knowledge and intelligence is distributed throughout the organization from the periphery of the system to the center of the system—a shift that allows us to look at a more integrative model between individuals, work units, and the organization. Rather than seeing each as separate, mechanical entities or organizational silos, the shift to P2P allows us to see combinations of natural, organizing entities.

Those of us who practice or teach leadership have lulled ourselves into a false sense of security with the proliferation of new theories and new books on leadership, but these theories are largely remiss in detailing the fundamental change in landscape sculpted by the rise of informal networks. This failure to see the P2P future threatens to push organizations who embrace traditional leadership structures into a reactionary corner rather than a position of being able to leverage the powers of this new, natural order.

As early as 1935, Kurt Lewin wrote of the importance of the interactions between individuals and their environment. More recently, Ira Chaleff spoke of the shift in the balance of power between leaders and followers and how leaders can no longer ignore the influence of internal and external stakeholders. There is now recognition that broader context and all constituents are critical—not just customers, employees, and shareholders; not just founders and donors.

Informal networks have become as powerful as traditional hierarchies—and in some cases, more powerful. Organizations have responded in a variety of ways that range from putting constraints on employees’ use of services like Facebook and Twitter to doing nothing at all. In attempts to bring parity between leaders and followers, organizations are beginning to recognize this as a futile effort given the current structure of organizations and many governments, but few if any have tried to harness the power of peer-to-peer architecture in the very structure of their organizations.

In most organizations, relationships and information flow are organized in some form of hierarchical structure, but this doesn’t need to be the only model. From popular movements in Tunisia and Egypt to Occupy Wall Street (OWS), the influence of an integrated network of equally privileged participants sharing information is producing a radical paradigm shift in the way we connect and relate to one another. People in social networks act much like “peer nodes” in P2P network architecture. The world no longer must rely on traditional hierarchical order to transmit or receive information.