Building Systems That Don’t Contradict What We Say We Believe
Designing beyond hierarchy means questioning the logic underneath.
Why do so many organizations that claim to empower people end up reinforcing centralized control?
They demand ownership—but withhold real levers.
They promise autonomy—but deliver overwhelm.
They speak the language of trust—but design systems that quietly assume the opposite.
Over 60 years ago, Douglas McGregor showed how our assumptions about human nature shape the systems we create—and how those systems then confirm the very behaviours we expected. What we believe about people becomes the design of our organizations. And that design, in turn, shapes how people show up.
In part one of this series, I proposed a contemporary reading of McGregor’s Theory X and Theory Y: a way to surface the hidden beliefs behind even the most progressive leadership practices—where care, coaching, and empowerment still mask hierarchical control.
This second part continues that distinction — and explores what each logic implies for system design in complex, self-managing organizations.
Not as a moral question.
But as a practical one:
What kind of structure are you building—whether you mean to or not?
1. Dealing with Complexity
What Organizations Must Handle Today
Complexity is no longer a side issue—it’s the normal state of modern organizations.
Successful leadership can no longer rely on the experience, the intuition, or the decision-making power of a few individuals. What matters today is the ability to integrate different perspectives—without getting stuck in endless discussions or decision paralysis.
Some organizations respond to this dynamic with even more control and steering. Others recognize the need for a different mode: more like a well-rehearsed jazz band—listening to each other, improvising, and staying oriented through shared timing, structure, and direction, without a fixed score.
How an organization interprets complexity says a lot about its view of human nature. And this view, in turn, shapes how it deals with complexity.
Theory X: Leadership Means Controlling Complexity
Those who view organizations through a Theory X lens might assume:
Most people are overwhelmed by complexity.
They can’t fully grasp the context of their work, only see their narrow section, or make decisions from a limited perspective.
That’s why you need leaders with an overview—people who coordinate, prioritize, and “translate” complex issues into manageable parts. Work is broken down into subtasks; employees are given clearly defined areas with tight boundaries and guardrails.
But this leaves the core problem untouched: the belief that someone must have the full picture. When that fails, we don’t change the system — we replace the person.
Instead of acknowledging structural overload, the pressure is individualized: If you’re overwhelmed, you’re seen as not fit for the job. The result is bottlenecks at the top, untapped potential elsewhere, and ongoing dependence on supposedly “strong personalities.”
This narrative overlooks that the real issue isn’t only individual capacity — but also systems design that best suits (and grows) the current capacities.
Theory Y: Complexity Requires Collective Intelligence
A Theory Y perspective recognises:
The world is too complex to be fully understood by any one person — even the most competent leaders. This isn’t a weakness—it’s the starting point for new forms of leadership and decision-making.
Taiwan’s digital minister Audrey Tang describes democracy not as majority rule, but as collective intelligence—emerging when diverse perspectives are integrated in a structured way, without personal dominance.
The same is possible in organizations:
Not by simplifying complexity, but by making it visible and actionable—through structures that allow people to contribute their perceptions and reach decisions through dialogue.
People contribute their knowledge and concerns when they know that their perspective will be heard – and when they do not have to fear suffering disadvantages as a result. This must be possible without creating arbitrariness. A system based on Theory Y weights contributions according to relevance – not status.
What a Theory Y System Must Provide
A Theory Y organization accepts the limits of individual control and builds systems that make collective intelligence possible. Such systems:
Distribute decisions across many roles—not just a few heads
Ensure that different perspectives become visible and accessible
Localize authority where context knowledge is strongest
Weigh input based on relevance—not on status or personal relationships
Differentiate the act of sensing from the act of deciding—without subordinating one to the other
Maximize transparency and visibility of information to enable shared coordination
Such systems are not chaotic—they are differentiated, process-oriented, and emergent.
And they are not idealistic.
They are a realistic response to the challenges complexity poses for today’s organizations.
2. Personal Development
From Deficit Thinking to a Culture of Development
When people managers talk about “enabling” people, they often mean HR-led trainings, workshops, or evaluation cycles.
Skills and feedback do matter—but they’re not enough. In a world where change is not only faster but more fundamental, learning is no longer just about solving familiar problems with known tools.
What’s needed is adaptive development: the ability to engage with novel challenges that don’t have ready-made solutions.
This distinction—between technical and adaptive learning—was introduced by Ronald Heifetz and Marty Linsky. Technical learning can be designed and delivered externally. Adaptive development cannot. It engages the whole person—not just their expertise.
True development happens in action.
Like climbing with a rope: the safety equipment provides support, but you still have to climb the rock yourself — with real responsibility, real choices, and the possibility of failing (safely).
Development becomes the core process of future-ready organisations—and a litmus test for the underlying assumptions.
Theory X: Learning as Deficit Compensation
A Theory X mindset might assume that
people don’t really know what they’re capable of—or what they lack.
They overestimate or underestimate themselves.
They need correction and evaluation from those with more experience or perspective.
In this view, enabling means identifying gaps and closing them—through training, tools, or pedagogical intervention.
Development is seen primarily as the transfer of technical knowledge—a way to compensate for deficits.
Those who want to grow need guidance. And those who struggle need more of it.
The result is a kind of well-meaning paternalism:
learning becomes synonymous with instruction, and responsibility for development sits with managers, coaches, or consultants.
Individuals become the objects of improvement, not the subjects of their own growth.
Theory Y: Development Through Participation and Shared Reflection
A Theory Y mindset sees development differently:
not as the accumulation of knowledge, but as maturation through participation.
Those who learn how to face, interpret, and co-navigate new challenges gain more than competence: they develop judgment, agency, and a sense of orientation.
This is adaptive learning—driven not by instruction, but by experience, reflection, and meaningful responsibility.
Chris Argyris called this double-loop learning:
Growth doesn’t just happen on the behavioral level (“How do I do this right?”), but on the level of mental models (“Why am I doing this at all—and what do I believe is possible?”).
Carol Sanford argues that real development isn’t something others do to you. It happens through you—when you reflect on your impact, take ownership of your role, and connect your actions to what truly matters. For her, feedback isn’t about fixing behavior, but about having meaningful conversations about intention and effect—always tied to the value you’re creating.
In this light, coaching and feedback are not hierarchical interventions.
They happen in peer-based dialogue.
To “enable” others doesn’t mean to develop them—it means to design systems in which development becomes more likely. For everyone. Not just for “talents”.
What a Theory Y System Must Provide – When It Comes to Development
A system based on Theory Y does not treat development as a way to compensate for deficits, but as a structurally embedded learning process. It:
fosters adaptive learning by using tensions productively, not avoiding them
replaces performance evaluations with frequent, contextual peer feedback
recognizes each person as the subject—not the object—of their own development
enables peer reflection and learning partnerships without hierarchical dependence
3. Empowerment
Why Empowerment Often Undermines Agency
Empowerment is one of today’s most popular leadership buzzwords—and one of the most misunderstood.
What sounds like encouragement or growth often creates subtle dependencies: someone else gives you permission to show up, to take space, to lead.
But real agency doesn’t grow from emotional encouragement. It grows through shared rules, transparent roles, and structures people can shape together - like a game that only works when everyone knows the field, the rules, and how to play.
Especially in self-managed settings, it’s worth asking: What does empowerment really mean—and what view of people is hidden underneath?
Theory X: Empowerment Needs Empowerers
Theory X assumes that people can’t fully hold responsibility on their own. They hold back, play it safe, stay beneath their potential.
To take on responsibility, they need someone to encourage—or empower—them. Empowerment becomes an act of leadership: a manager or coach who “sees potential,” “builds confidence,” or “gives permission.”
Well-intentioned as this may be, it keeps people small —and systems trapped in a quiet hierarchy: a caste of empowerers, endorsing those that get to step up.
Theory Y: Agency Emerges Through Transparent, Shapeable Structures
Theory Y flips the script.
It doesn’t treat agency as a gift to be granted—but as a capacity that emerges when the system is designed for it.
People experience empowerment when they operate in a system that doesn’t hand out permission situationally, but provides default access: to clear roles, shared rules, and decision-making processes they can actually co-shape.
These rules aren’t rigid—they’re open to change, through a process that invites reflection and participation.
Empowerment, then, isn’t about someone believing in me. It’s about knowing how to influence my work and my context.
As Carol Sanford puts it: Empowerment cannot be given. It must be claimed—not through systems that reward compliance, but through those that enable contribution.
What a Theory Y System Must Provide – When It Comes to Empowerment
A system based on Theory Y does not treat empowerment as a gesture.
It enables shared responsibility through structural access.
Such a system:
Creates clear rules and processes that apply equally to everyone
Makes decision pathways transparent, consistent, and traceable
Provides legitimate, accessible ways to change the organisational structure itself
Decouples participation rights from relationships, status, or communication style
Enables conversations about power and boundaries—without individualising or suppressing them
4. Belonging and Connection: Between Emotional Needs and Structural Conditions
Belonging is a deep human need—and one of the most sensitive topics in organisations.
Those who don’t feel included tend to withdraw.
Those who don’t feel safe rarely take ownership.
Trust, openness, and the courage to contribute emerge where people feel seen, respected, and part of something.
It’s like a fire in the centre: people gather voluntarily because it offers warmth.
They move closer to be more in connection, not from a sense of obligation—and they are free to step away.
But this is also where well-intentioned efforts can backfire.
Belonging can’t be prescribed.
And connection doesn’t grow through motivational appeals.
Genuine resonance always contains an element of unpredictability.
The way organisations approach this reveals a lot about the human assumptions behind their systems.
Theory X: Belonging Requires Emotional Safety—Created by Others
A Theory X mindset assumes that people need a safe harbour before they can show up, take responsibility, or risk failure.
And this feeling of safety—so the thinking goes—can be actively created by leaders:
through emotional care, relationship-building, or deliberate trust rituals.
The implicit expectation: that leaders or coaches should generate belonging by opening spaces, facilitating connection, and modelling vulnerability.
The downside:
Those who don’t want to participate in such formats—or prefer different expressions of connection—may be perceived as difficult, distant, or relationally lacking.
When a sense of belonging becomes a prerequisite for responsibility, this creates subtle pressure—along with fear of social exclusion.
Theory Y: Belonging Emerges Where Spaces Are Voluntary and Co-Created
A Theory Y perspective recognises that social needs vary—from person to person, in form, in importance, and in timing.
Belonging and connection do not arise because someone creates them.
They emerge where people themselves can shape how and where they meet one another.
This requires a conscious distinction between operational and social spaces:
between collaboration and connection.
When role clarity, decision-making, and coordination happen in clear structural processes,
social spaces are freed up—for voluntary participation.
Each person can then choose their level of closeness, exchange, or personal connection—
without being rewarded or penalised for that choice.
Belonging no longer becomes a requirement for participation—
but an experience of agency, relevance, and respected difference.
What a Theory Y System Must Provide – When It Comes to Belonging
A system that aims to enable belonging rather than manufacture it creates conditions that:
Clearly distinguish between social and operational spaces—and make both accessible
Tie participation to roles and processes—not to relational investment
Respect behavioural diversity and the freedom to opt in or out of emotional openness
Offer social spaces without enforcing them—and never punish withdrawal
See belonging as the result of co-creation and shared relevance—not its precondition
5. Dealing with Change - From Change Management to a Culture of Change
Most organisations today accept that change is constant.
Structures, customers, strategy, focus, and processes are all evolving—often simultaneously.
Change is no longer a project with a beginning and an end. It’s an ongoing process of navigation.
You can’t control the wave—you can only learn to ride it.
That takes practice, balance, and a good feel for timing.
But how an organisation deals with change depends heavily on its underlying view of human nature.
Theory X: Change Must Be Managed and Guided—Or It Will Overwhelm
A Theory X mindset sees change as a potential threat—something that unsettles people, creates resistance, and must be managed through communication and leadership.
The assumption: even if people rationally understand the need for change, they still need emotional support, repeated explanation, and someone to make sure no one is left behind.
This puts a heavy burden on leaders:
Change must be orchestrated, explained, and psychologically accompanied.
Employees are seen not as active participants in shaping change, but as vulnerable to withdrawal, confusion, or refusal.
The result: overextension on one side and disengagement on the other.
Theory Y: Change Is Normal—And Becomes Useful Through Meaning and Participation
Theory Y starts from a different premise:
Everyone in an organisation is, in principle, capable of adaptation.
People encounter change in their daily lives—sometimes as opportunity, sometimes as challenge.
The key is not whether something changes, but whether people are given the chance to make sense of it and influence how they respond.
Organisations that regularly create spaces for shared meaning-making—through transparent strategy work, participatory decision formats, or retrospective learning—actively foster this ability.
They enable people to connect their personal experiences with broader developments—and to see themselves as capable of action within them.
This increases not only individual resilience but also the organisation’s collective adaptability.
What emerges is not fragile steering—but something closer to organisational antifragility:
a system that grows stronger by integrating, not resisting, change.
What a Theory Y System Must Provide – In Times of Change
A system that doesn’t aim to manage change centrally, but to make it usable across the system, must:
Create regular spaces for reflection and shared meaning-making
Make strategic and cultural shifts transparent and contextually relevant
Treat change as a normal part of organisational life—not an exception
Acknowledge individual sense-making processes—without pathologising them
Distribute responsibility for adaptation broadly—through roles, not relationships
What Kind of System Are You Building—Whether You Mean To or Not?
From complexity to change, from development to belonging—every organizational practice reveals a belief about people.
And that belief finds its way into the smallest design decision:
Who gets to decide what?
How visible is relevant information?
Where can someone say “no”—and still belong?
Most organizations don’t struggle because they lack good intentions.
They struggle because they unconsciously recreate systems based on outdated assumptions—while using the language of participation, trust, and empowerment.
But the good news is:
We can design for something else.
Theory Y is not a utopia.
It is a different starting point.
It asks:
What if people are capable of more than we assume—when the system doesn’t get in the way?
This shift is not about changing people.
It’s about building systems that don’t contradict what we say we believe.
🧪 Run this Week’s Experiment: Explore a Different Relationship to Control 🎛️
This week’s experiment involves reflecting on assumptions you make when collaborating with others in your group/team/organisation and their impact, exploring options for new and different ways of doing things, and getting feedback from others about them.
Next Week: In Part 3 of this series, we turn our focus to leadership. In line with the Theory Y distinctions, we look at leadership not as a personal quality, but as a system function—distributed across roles and processes.
We’ll explore what it takes to lead in self-managed contexts and how to calibrate responsibility.
Because beyond hierarchy doesn’t mean without leadership. It means a different kind of leadership altogether.
