Or

How we should talk with each other

This was not an encouraging opening for a conversation. Alice replied, rather shyly, “I—I hardly know, sir, just at present—at least I know who I was when I got up this morning, but I think I must have been changed several times since then.”

What changed in the last essay was that hierarchy is not the only — always right — answer to how organizations can work. We can also work together. And we looked at different ways this is possible. But it was all about the setup, the structure and what is needed to make the setup work. What we haven’t looked at is people actually doing it. That means first and foremost people engaging with each other. And most engagement at least starts with communication. Secondly, doing cooperation means using all the mechanisms, the design principles Ostrom and Benkler have explained to us. Now using these requires individual people to reason. Individual reasoning only becomes useful for cooperation if it is transformed into information being shared with others. Again, communication or — because it is the most apparent manifestation of communication — talking with each other. So how we should talk with each other is the topic of this essay.

OK, easy, we all know that one. Especially all the managers will go, yeah, I can do that, I talk all day, no problemo. The issue is we use this skill that most of us have a basic understanding of very casually and without real knowledge of its depth. Frederic Laloux in his 2014 book “Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage in Human Consciousness” looks at quite a lot of it. Things like cooperative decision-making, constructive conflict resolution, and a safe environment are things he found in studying next-level organizations. Now, Laloux, although not a classical academic — he is a former McKinsey associate partner and executive coach — is a brilliant collector of good practices. He can in his reflections sound a bit new-ageish sometimes, but we’ll stick to his concrete, useful observations rather than his more new-age framing, and that starts a bit further down. One of the best things he found was the minute of silence that is a custom at the beginning of meetings in some companies. Not a form of spiritual meditation but just a practical way to have a fresh start to a discussion with the help of a one-minute absence of discussion. Works every time, believe me.

Let me start exploring “good” communication in organizations with my favorite early management theorist Mary Parker Follett. In the collection of essays “Dynamic Administration,” posthumously published in 1941, she has this beautiful sequence: Conflict → Integration → Giving of Orders → Power-with → Coordination. For all Follett fanboys: I know Integration is not in the “official” sequence, but damn, it is the coolest takeaway from the whole thing, so it needs to be named.

Follett knew already a hundred years ago that conflict is not the problem. And I hope we today are all aware of that. Differences in opinion are to be expected and should not be suppressed, because they can be potentially productive. She distinguishes three ways of dealing with them. Domination is when one person gets what they want and the other person just gives in or is forced to do so. Compromise — and since I am Swiss, I am the expert on this one because our whole political system is basically built on this — is when both parties surrender something in order to create an agreement. Both domination and compromise are basically loss situations. Either it is win-loss or loss-loss. In a cooperative organization this is not a favorable way to progress. That is why Follett came up with a third option. Integration is finding a solution in which the underlying interests of both parties can be satisfied. She has this famous example of her working in the university library. She wants the window to be closed so there is no draft. Another person wants it open to get some fresh air. The practical solution is to open another window further away, allowing air to come in but far enough not to produce a draft. This is of course only possible if the two people talk to each other and find out what the other’s interest is. Only this allows them to find a solution that satisfies both interests. So communication is a prerequisite for integration. Follett thus described what we would today call a win-win situation, something that has often been misused since — you know, by just adding it to your preferred solution without going through the whole integration work.

Follett then goes on to the situation in organizations when a boss would usually order a subordinate to do something because “I say so.” Since we have discovered that we can talk with each other, we should try to discover what the situation requires, what’s best according to the circumstances. She calls this the “law of the situation.” So it is basically the situation that decides or gives the order, not the boss. But situations of course cannot really decide, so it is rather the knowledge of the situation. Knowledge is not just in the hand — or head, or heart — of one person. So the boss might know something the subordinate does not and the subordinate might know things the boss doesn’t. So only by taking their knowledge together can they make the best decision. Authority becomes tied to knowledge, not position — or it becomes functional.

Now it gets even cooler, because this means that the traditional conception of power — you know, the whole hierarchy thing — can be overhauled. Because if people do come up with stuff together, the traditional model of the boss making the subordinate do something — A → B — will become two people together enabling the act of doing something — A + B → capacity to do stuff. She describes this as not power-over — the hierarchy — but power-with — the collaboration. So two people together understand the situation, integrate their different knowledge and determine what the situation requires. And nobody needs to dominate the other.

Cool, isn’t it? But the caveat is that this only describes one individual interaction. Organizations contain hundreds or thousands of these activities and most of them are somehow connected to each other. This is where Follett describes how organizational coordination works in four easy principles. First is coordination by direct contact, meaning people whose work affects each other should communicate directly — horizontally — rather than everything having to go through the vertical channels of hierarchy, because that just takes too much time and is too complicated. Second is coordination in the early stages, which means that coordination or communication should start from the beginning, while plans are being developed, before everything has already been decided and basically shit has already happened, and untangling it would be complicated again. Third is coordination as reciprocal relating — OK, what? This just means that causality in organizations is circular, not simply linear. Or if that doesn’t help: The work of A affects B, B affects A. C affects both and they affect C. And don’t get me started with D. It is a concept that should be logical, but we still think too much in those damn linear process diagrams, which have a start and an end. But that is just an incomplete fragment. Activities in organizations look more like circles. We will talk more about this when we look at Systems Thinking. Lastly, the principle of coordination as a continuous process states that coordination is not a meeting or a management workshop; it is happening all the time everywhere in the organization. How this coordination changes the practical work of managers we will look at in the next essay. With this sequence — Conflict → Integration → Giving of Orders → Power-with → Coordination — Follett gave us the backbone for how interaction and communication in cooperative organizations can work.

Now Follett is so important to this whole discussion thing — heck, to modern management theory as a whole — that I want to add some detail points and tidbits — and yeah, I am kind of a fanboy of hers, I admit. First, a really good real-life example for integration: the Smith/Panotti case. Smith sued Panotti, who was a small fruit dealer, for a 40-dollar debt. Having to pay the whole debt would have put Panotti out of business — remember, this is a hundred years ago. So the judge ordered a repayment in installments from Panotti’s earnings, allowing both Smith to recover his money and Panotti to remain in business. A perfect example of how opposing interests do not need to be incompatible.

When it comes to gathering information on the situation — remember the law of the situation — cooperative fact-finding becomes really important. Pre-existing knowledge is fine, but as we have seen in an earlier essay, gathering information in a joint process resolves real disputes.

Also important to Follett is the distinction between muddle and difference. The latter is a real difference in interests, needs, perspectives or purposes between people. Muddle, on the other hand, is confusion created when apparent differences have not been clearly identified and separated from assumptions, misunderstandings, emotions or poorly defined issues. Muddle can be cleared up in order to make the real differences visible and concrete. This should happen before integration is started. Remember the example that we have to first be clear whether what we see is a snake or a fallen branch on the ground before us.

A bit more complicated is the concept of X and X’. That is Follett pointing out that when we interact with each other we change. And every subsequent interaction is with these changed participants — and in a discussion that means mainly the opinions that have changed. So, in my shorthand, it is not A → B → A → B but A + B → A′ + B′. Now this gets really complicated when it is not just A and B but also C, D and E — and therefore also C′, D′ and E′. What can happen — and this needs to be avoided — is that people refer back to an opinion that has already changed, therefore hindering the progress of the discussion and just confusing everybody in the room.

There is also what I would call the mis-scoped question. This is important because Follett found that in discussion — and she was sort of a professional mediator, especially between employers and unions — people often do not argue about the exact same point; they are mis-scoping the discussion topic, which of course leads to misunderstandings.

Another issue is that it is difficult to impose standards and data on all the participants in a discussion if these were handed down from the top. How can we possibly think that things like that just get accepted? Why should they? They first have to be integrated into the reasoning of all participants — or even better, collected and created cooperatively, but that is not always possible. OK, example needed, I get it. KPIs and targets, for example. People need to understand what they measure and why this is important and why a certain target value is worth achieving. Or even harder: a certain process standard. We all have them and we kinda think they are important. But you cannot just post them on a wall. Everybody involved needs to understand why it is important to do something the way it is described. There might be quality, safety or environmental reasons.

Eventually it comes down to two things. First is from Follett and is just that fighting is lazy: it is the easy way of doing things, same with domination; integration is genuinely hard. So I don’t want to oversell anything here. But remember intellectual laziness. It’s again that. And this also brings me to the second point, and it’s from Laloux, not Follett: This needs to be learned. Nobody can expect good discussions and good communication to happen without training. This applies to transforming companies and newly created companies, and to CEOs, frontliners and new hires, of course. Many of the organizations he studied train every new person in conflict resolution and in their ground rules.

Information sharing is also a point that Laloux looked at, and in the companies he uses as examples, this works quite differently from what you might be used to. See, in the absence of classical hierarchies we have seen that decisions are made by many — or all — not by a few managers. That means the team also needs access to full information. You and I, we are used to the need-to-know way of sharing information. But the point is that this is part of our vertical power structure; horizontal structures don’t need that to function. This also brings us back to Benkler’s analysis of how badly this restrictive information handling actually works: a lot of it is simply lost or not available when it is needed in hierarchical organizations.

I can hear you think: “But, but, this is also about organization. How should we organize information sharing if the managers don’t filter?” I understand you, and it goes along with another fear that goes something like: “But I am already overwhelmed with information today. So many emails and newsletters. Now I have to deal with all information within the organization.” The solution is quite simple — and it comes from my own experience, not some book. The problem is largely caused by today’s poor sharing of information. Information is usually pushed into the organization by memos — or emails or newsletters or Teams messages, nicely worded by a communication expert with some nice pictures or maybe even in a video. The main misunderstanding here is that information within an organization is a good that needs to be marketed and sold to people. That is of course wrong. Information is a resource for work, like steel or electricity or capital. It needs to be in a usable form. That means we can skip all the nice fluff and persuasive niceties. Information needs to be true, reliable and to the point. We are not newspapers trying to sell copies. We just need the thing, the information. That also means that organizations should stop pushing information. In organizations where people are trained to communicate and decide — and as we have seen need information for that — they will get — or pull — it when they need it.

There are two potential issues with that. First, how should people know what information is available — for example safety points or what kind of data has already been collected? On the one hand this is knowledge — sort of knowledge about knowledge. People need to be trained in what information to look for and how to look for it — and what not to forget to look for. And then all information needs to be organized, indexed, possibly also bundled with a simple alert system. The second potential issue: How would that work if they are not filtered and prepared nicely? Nowadays there are really more than enough technological possibilities for that. I mean, when was Wikipedia founded? 25 years ago? Nowadays we would have even more advanced methods to do the same. I recently read a user comment asking Microsoft if they could not fully integrate Copilot into Teams and make it sort of a record holder of all knowledge in an organization, including all chat histories and documents and data published in SharePoint. I am sure this is actively being worked on and would of course make information pulling a lot more efficient.

We already saw Follett’s proposal for decision-making from a hundred years ago, and in general integration is still the best approach. In Laloux’s observations there are additional ideas from organizations that are worth looking at. Especially one from a software company where the governance meetings, in which the roles and rules of the organization are decided, follow a clear process and serve as an example for Follett’s integration. One person will present a proposal followed by a round of clarifying questions — the facilitator will block any hidden reactions. Then all participants can individually react to the proposal but without a discussion. The presenter will then amend and/or qualify his proposal. Only then follows a round with real, very specific objections, should there be any. If any objections surface, the facilitator leads the group in reworking the proposal to remove the objected parts while preserving the original intent. This is almost what Follett was aiming at with integration; what is still missing in this example is finding the true interest behind people’s objections and working that in.

Now let me just be transparent: Laloux selected some very special organizations, not the normal ones. His sample is not representative in any way, but it shows what is possible, and that is exactly why I like his work. 

And where Laloux’s observations really become interesting is when decision-making faces special circumstances such as a crisis situation. In crisis we might not have time for all that communication and cooperation stuff, right? Actually this might be underselling people’s ability to adapt. A car-part manufacturer, which was very cooperatively organized, was faced with reduced orders in 1990, in the wake of the First Gulf War. The CEO decided not to go all boss man and fire all the temp staff but literally stopped the machines and stepped on a soapbox in the middle of the plant. He then explained the situation to the staff. Within an hour the employees had proposed a temporary collective 25% pay cut to save the temp staff, put it to a vote, and unanimously agreed on it. This was possible because these people were used to making decisions jointly in normal circumstances. So they were enabled, so to speak, to also do it in a crisis.

There are other examples, usually involving organizations having to take shortcuts like giving teams options, not the possibility to discuss the whole problem in a crisis situation. But organizations that are used to communicating, and to discussing with the intention to solve or decide, can do the same in a crisis. And why not.

Another area where it is interesting how communication is used in next-level or cooperative organizations is conflict resolution. An American tomato-processing company has a very detailed structure for this — but elements of it can be found in many of these organizations. First of all, they have ground rules — as many of these companies do — on how to work in general and together in particular. In their case it’s “never use force against other people and honor your commitments.” Another example is “People are of equal human worth; people are essentially good unless proven otherwise; there is no single right way to manage corporate issues.” Both work as very simple guidelines that can be understood by everybody.

That of course doesn’t mean that conflicts do not emerge. The tomato company has a clear escalation ladder. But escalation does not mean I report you to your boss; it means who gets involved to solve the conflict. Firstly, the parties have a private conversation in which the complaining party makes a clear request, not a judgment or demand. This can then be met with a yes, no or a counterproposal. If they cannot resolve their issue, a mutually trusted colleague is asked to act as a mediator who supports but cannot judge or rule. If that doesn’t help, a panel of topic-related colleagues is asked to do the same as the mediator did. As a last “escalation,” the company founder will be added to that panel, further adding to the moral weight, but still he cannot impose anything. In this way, more and more assistance is provided for conflict resolution, but the involved parties still have to agree on a solution themselves. Sounds like a lot for a bit of interpersonal conflict. That is because every kind of conflict in this company is handled that way, whether it’s technical, personal, performance-related and so on.

Other companies have found that making team assignments more flexible and giving people the possibility to switch teams easily works as a relief valve. When, for example, your team leader starts to act too bossy, you can just leave that team. In other organizations, team leads or other hierarchical positions are elected by the team members.

This is all fine and well, but you might interject — as did I — this sounds like all the people in these organizations are nice, holding hands constantly and singing Kumbaya all the time. What about people not playing nicely? What about having bad actors in the organization? This is an important point, and there are three types that we have to distinguish. First, opportunism — or free-riding and shirking — which Ostrom, whom we know from the last essay, covered in detail. A lot of her design principles for successful self-organization address exactly that point. In short, it is important to remember that self-organization is not the absence of control; it is a different allocation of control. Meaning the members of the organization do the controlling themselves — you know, like the Japanese villagers themselves patrol the woods, and the violators’ fine of good old sake goes to the patrolling villager as compensation.

The second category is more malicious behavior that we can describe as destructive and/or non-rational. This often cannot be handled as gracefully. It is when controls or fines don’t really take effect. That is why even in Ostrom’s commons and in next-level organizations there are still exclusion or firing mechanisms. Sometimes, if all reasoning fails, you just have to let people go. Making this short statement is sort of an exclusion itself and we will come back to this in a bad things happen essay, I promise.

The third type of bad acting is power-seeking and manipulation by individuals within the organization. This would be stuff like controlling the agenda, coalition building, and monopolizing airtime within discussions. This is a tricky thing. So much so, I have to bring up one of my least favorite German philosophers and sociologists, Jürgen Habermas. He actually has very good ideas, I just have an early student trauma of having to read his forever-ongoing arguments in far-too-complicated gibberish. One of his central subjects, his social theory, touches exactly on this manipulation problem in particular, but is relevant for the whole topic of communication in cooperation.

Habermas — kidding aside, his ideas are truly brilliant — first of all gives us the names for the different communication methods we were looking for. Communicative action is what we want because it tries to reach an understanding or agreement. Strategic action, on the other hand, is communication aimed at getting the outcome I want rather than at reaching understanding. Done openly, like haggling over a price, that’s fine. Done in disguise, it’s manipulation — the manipulative bad actor. The disguised kind is quite difficult to spot because both look like communication. Manipulators do not need to scream and shout or have a title; they just have a hidden agenda — see, hidden as in hard to see. My practical version of this is a test in the spirit of Habermas, which you can use. If in doubt about manipulative elements, you can ask yourself: Would this argument have the same weight if somebody else had made it?

To understand the issue a bit better, we have to look at the structural source of it. So let me quickly explain Habermas’s social theory. He divided the social realm into the lifeworld and the system. The lifeworld is the part that is coordinated primarily through communication and mutual understanding. People talk, interpret situations together, come up with rules, build trust and arrive at shared meaning. Ha, sounds exactly like our cooperative organizations. The system, on the other hand, coordinates via impersonal mechanisms, mainly money and power. This is what markets and bureaucracies mainly do. Now the problem he saw was that mechanisms belonging to the system increasingly invade areas that ought to depend on communication and mutual understanding. In our case it is status, money or power creeping into a discussion that should be about understanding, and the manipulator is the person who uses it while pretending to reason.

Habermas was mainly thinking of whole societies, with their economies and states, but his solution can still be applied to an individual organization. Yet it is not a “perfect” or absolute recipe. He doesn’t want to just get rid of the system. He proposes roughly — again I have to apologize to all the hardcore Habermas fans for some simplification — two responses. The lifeworld should be protected by not replacing communicative processes with impersonal mechanisms like power struggle and bureaucracy. And communication has to be strengthened by making decisions and rule-making part of a process that involves the affected people, with claims questioned and justified through reason rather than authority or status or money or coercion.

This will prevent some of the manipulative forces, but the danger always remains. But it also answers the big question behind all of this cooperation talk: Can social order exist among autonomous individuals? Individuals who are not told to or forced to do something. Habermas’s answer is clear: Yes, by using communicative action and discourse as the mechanism for social integration — rather than money or power.

I’m not a big fan of summaries, but let me try it this time to hammer these really important ideas into your heads: Cooperation does not just magically appear when job titles are removed. It requires a different coordination mechanism, which we all know: communication. But constructive communication is not just talking. It requires us to learn about information sharing, integration, decision-making, conflict resolution and safeguards against manipulation. And by learning how to really talk with each other, we as autonomous people can create order together.

But remember, with all the talk about teams and cooperation, we have seen again that it all depends on reasoning. Reasoning is what keeps communication and cooperation from failing. And who does the reasoning? Exactly, you do, and so do I, and Alice, and the caterpillar, although with all the puffing maybe not.

Don’t just take it from me, here is some good stuff to read:

Carroll, Lewis. “Alice’s Adventures in Wonderland”. 1865.

Follett, Mary Parker. “Creative Experience”. Longmans, Green and Co., 1924.

Follett, Mary Parker. “Dynamic Administration: The Collected Papers of Mary Parker Follett”. Edited by Henry C. Metcalf and L. Urwick. 1941.

Laloux, Frederic. “Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage in Human Consciousness”. Nelson Parker, 2014.

Habermas, Jürgen. “The Theory of Communicative Action”. Vol. 1: “Reason and the Rationalization of Society”, translated by Thomas McCarthy. Beacon Press, 1984. Vol. 2: “Lifeworld and System: A Critique of Functionalist Reason”. Beacon Press, 1987.

Finlayson, James Gordon. “Habermas: A Very Short Introduction”. Oxford University Press, 2005.