“Most of us are still victims of what my colleague in the Media Lab, Mitch Resnick, calls the ‘centralized mindset,’” says organization thinker Thomas W. Malone: that to manage things, it’s best to put somebody in charge, make somebody responsible, have somebody giving orders to other people.

But businesses and organizations are emerging that turn that idea around. Wikipedia and YouTube are the best-known examples of “collective intelligence,” where many people create a lot of different things independently. Similarly, InnoCentive is a web community that outsources companies’ research problems and invites answers from anyone who wants to contribute, awarding a handful to cash prizes to the best of the bunch.

Malone, the Patrick J. McGovern Professor of Management at the MIT Sloan School of Management and the founding director of the MIT Center for Collective Intelligence, has been thinking about outsourcing the non-core functions in companies and the use of intelligent agents for commerce for over 25 years. Through the Center for Collective Intelligence, he’s working to track the “genes,” or design patterns, of companies that are effectively using collective intelligence to innovate, and figure out how those patterns can be replicated best in other companies.

In a conversation with MIT Sloan Management Review editor-in-chief Michael S. Hopkins, Malone talks about the changes being brought on by advances in what he calls “coordination technology,” the new “paradox of power”: the idea that sometimes the best way to gain power is to give it away.

So much has been made of the ways that technology has evolved–computation, storage, communication, and now instrumentation—and how it has completely changed what companies can know. As a close observer of all this, do you see executives keeping up?

Well, sure, executives and everybody else knows about the new kinds of technologies that keep popping up. But there’s a key perspective that a lot of people don’t really get yet, which is that these new technologies change the essence of organizations.

An organization itself is, primarily, a huge human-based machine for communicating