To start that part of our conversation, can you articulate what they are so readers can kind of be level set in terms of our discussion?

Definitely.

Hierarchies tend to break in three predictable ways.

They tend to be ultra-competitive, unjust, and unstable.

And I want our listeners to think about these as three interrelated symptoms, and I'll explain in a minute how we can diagnose them before we start treating them.

But these are three interrelated symptoms that jointly create this syndrome of the broken hierarchy.

The primary feeling that you might get if you're working in an ultra-competitive hierarchy is that you're being punched from all sides by your peers.

What advice do you have around navigating those potential challenges or conflicts that come in particular roles?

How can leaders create these conditions so that they and their employees can thrive?

So let's start with the common value principle.

The common value principle has two aspects to it.

The first one is we want a hierarchy that reflects who we are, who we wish to be, what we believe in, right? And so in addition to a meritocracy, a leader can create a virtuocracy based on virtue.

You will promote people who show kindness, who are great in active listening, who support others, who mentor them, right? So we can add that to the ability and achievements and accomplishments based on which we promote.

The way you structure your evaluation systems, your incentive structure in the organization really shapes kind of collective value and can reflect the fact that we are a team first kind of organization.

Let's say, Matt, that you have $10,000 available to you and you can use that as rewards to motivate your team.

What advice and guidance do you have for how communication can be used effectively in hierarchies?

So I wanted to use those maybe as an example, and when does ranking near like motivate performance and when does it turn coworkers into competitors who feel like when they're looking at their peers that their success comes at my their success comes at my expense

thank you for sharing these experiences i think there is a very long history of using forced ranking systems in a lot of organizations in the industries you mentioned right whether it's in consulting or other spaces i think to get to the kind of last portion of your question i think it works well when people take it upon themselves to improve how they get work done and improve the quality of the work they produce or the pace they do.

And by the way, we're seeing it right now.

I think I'm talking to a lot of young people.

Some of them were former students of mine in the context of the AI revolution.

And I think they're experiencing a lot of pressure to not just perform more, but faster and significantly high expectations and so on.

And so when you try to improve as a result of this kind of force tracking system, it can work well.

What can a large organization learn from that improv ensemble about creating genuine connection and a feeling like they matter?

But how much do you recommend that people try to manipulate that? Or is that playing with fire and dynamite?

It's a great question.

So some people are actually advising young people, Gen Z or people kind of lower in the organizational hierarchy to try to navigate the hierarchy or manipulate the hierarchy.

And some of the advice that I'm hearing is actually very Machiavellian.

Right.

So get the information you're not supposed to get.

Maybe stop people in the back, make them look bad because it's all relative comparison and so on.

How does that relate to some of the concepts we've been talking about in the earlier part of the conversation?

Why is that? And I guess that raises the broader issue is how can these broken hierarchies continue to survive in the marketplace in a competitive environment, both in terms of hiring people and in terms of delivering to their customers?

So these dominant kind of power-seeking people who might be kind of somewhere in the dark triad, right, in terms of narcissism, Machiavellianism, and psychopathy, are also taking actions in parallel, right? It's not just kind of others acting on these leaders.

These leaders are also taking actions sometimes to reinforce or really solidify their control over power and so on.

So there is a back and forth there.

Multiple forces are at play.

One of the solutions is kind of they loot the influence of these leaders and organizations through a dual strategy.

or multi-leader kind of structure, right? So let's think about captains in collegiate sports, right? So let's say you have one captain who's really dominant.

To what extent is that sort of an emergent property? And to what extent is that a top-down program that the leaders kind of impose on the organization? Yeah.

Let's flatten hierarchies." Is that a good option?

It's a really, uh, interesting question.

I think I definitely see it here in Silicon Valley, and startups definitely start more egalitarian.

Um, everyone is helping with everything.

So you might do operations and marketing and, um, other things all at once.

Uh, it really becomes a challenge when you start to scale, right? So when you go from, uh, twenty employees to two hundred to two thousand, when you get to this two thousand mark, but even before, it's really difficult when you don't have a clear sense of direction.

Who's setting the vision? How are we going to coordinate work? How are we going to incentivize, uh, employees? Um, even kind of, uh, very successful companies who claim to be flat, like Valve, the kind of video game company, um, they do have informal hierarchies like any group, like any team, right? People might get more respect if they recently had tremendous success.

Mm-hmm

But maybe you could help explain to the audience the sort of relationship between power, status, and authority, where it really comes from, and, and what you might tell to people who are leading teams or organizations about what is the most effective way to do that based on the research, based on what you've seen.

It's a, a very important question and one that people in organizations grapple with all the time, right? So I think, uh, one of the reasons we see a lot of confusion is that, uh, there are so many different sources of influence, of authority, uh, in organizations.

Um, it might be the fact that you're controlling certain resources that people need.

It might be the fact that you have decision-making authority.

It might be your social network, right? You have such influential connections that you can get things done and achieve things through that.

And, uh, when I teach negotiation here at Stanford, I, uh, try to encourage my students to think about sources of power in negotiation, for example, in a multidimensional way, right? So they might say, "Well, I don't have strong alternatives right now," or, "I don't control a lot of resources right now." So I ask them questions about their expertise, about their connections, about other alternative sources of power that might, um, make them more-- having stronger sense of self-efficacy at the bargaining table, right? And we can take it to the same context of leadership.

There are different bases of leadership and influence, uh, in organizations, in teams, and I would encourage the listeners to, A, lean into those kinds of resources and tools that have worked well for them in the past, and B, learn new tools.

Hmm.

Nir, did you have something to add?

Yeah.

I would just add that in these conflict situations or potential conflict situations, it's important to rely on a diverse toolbox, right? So we can rely on our identities, our emotions, our relationships, our strategies, our ethics, right? And if we just focus on one kind of bucket in this kind of five types of tools, then it's going to be quite challenging for us, right? And sometimes it's about building a relationship, right? So we're going with relationship.

Sometimes it's about bringing fairness to the front, right? So ethics.

Sometimes it's about planning ahead, right? That would be a strategy.

Or regulating emotions that...

So if we have a diverse toolbox, I feel that we can rely on a lot of different tools to make it work, and that's important to keep in mind.

And I'm wondering if you can share with us some of the advice that you're giving the athletes that might apply to everybody in this room as well.

Thank you.

Um, I love sports, my family loves Stanford Athletics, and, um, one thing I've learned, um, is that our teams are great, uh, in creating a culture of pluralism.

What do I mean by pluralism? I mean an environment where, uh, multiple people can thrive, ascend, and lead through different skills by enacting different characteristics and showing up in different ways.

So I'm currently trying to, uh, work with Stanford Athletics, uh, a little bit with the coaches and with the athletes, on maintaining, nurturing, developing that environment.

I'll give you one concrete example.

I don't know how many people know this in the room, but a lot of our teams have multiple captains.

Nir, how are you using AI?