In organizations where trust exists, ideas trump hierarchy

Be wary of anyone who believes the trad'l org pyramid will be an effective form of human organization in the future–'cause they're wrong.

— Gary Hamel (@profhamel) August 6, 2014

One of the best articles I’ve read about culture and innovation is from HBR: First, fire all the managers. Written by Gary Hamel, it’s a very good and practical read, the idea of doing without managers shouldn’t surprise you if you’ve read his book The Future of Management. I won’t get into the specifics of the article (make sure you read it!) but I’ll just say that I also believe managers should not exist; but do believe that in some cases some management is necessary. More importantly, I believe organizations should be run by ideas, not titles.

There is ample evidence that the vast majority of people like the security a hierarchy provides them because it helps them cover their butts when responsibility is spread, also because it provides clarity. But, for various reasons, the benefits of hierarchy become irrelevant once bureaucracy creeps in and slows decision making. Fast decision making just doesn’t exist in hierarchical organizations when bureaucracy is pervasive; that’s a fact of most organizations.

The benefits of less hierarchy are also evident, but it doesn’t fit every type of business; even the most innovative in the world. Many innovative organizations are organized hierarchically, with a single leader pushing boundaries. But organizations like these are outliers, Microsoft (when Bill Gates was CEO), Apple, Google, Amazon and Tesla immediately come to mind. The belief is that people at the top of these organizations are so revered that people will graciously follow them, but the truth is these leaders have done a good job of building a healthy hierarchy that keeps bureaucracy at bay.

The purpose of a healthy hierarchy is to defeat bad bureaucracy: to install and sustain a good bureaucracy http://t.co/Ct1QQRrXF9

— Bob Sutton (@work_matters) August 27, 2014

When traditional hierarchies breed bureaucracy

In Mexico, hierarchy that breeds bureaucracy is the norm. A few years ago I had a situation with a client precisely because of their bureaucracy creeped into their hierarchy. The client gave us complete control over the execution of the project, but in one week in particular we had an unexpected event we could’ve used as leverage to execute some of those ideas, so we quickly proposed some new ideas; but we needed to move quickly.

The problem was that all decision making was from from their HQ in Monterrey, not here in Tijuana. That’s a two hour difference that makes a world of difference when you need to move fast!

Anyway, I sent them a couple of emails on a Tuesday and didn’t get a specific response until Friday (the day of the event). On Friday, with some tome left to make the moves necessary to take advantage of the opportunity, I still had to probe further to see if they had discussed the ideas we proposed. The answer was no. The person’s superiors were not briefed on the matter and the person responsible (decision maker) for these particular activities was out of the country. So that was that, opportunity missed.

I know, you’ve probably heard this same response a bunch of times. It sucks because this sets the stage for everything else we did moving forward. When people don’t have the power to make a decision individually without the need to ask everyone else for permission and then wait until they feel like ok’ing it, it slows the whole operation to a crawl.

Everyone is the CEO of something

A persistent problem in large organizations is nobody knows that the strategy is, the big picture. So, a good rule of thumb is to make sure everyone understands the organization’s strategy, not just the C-suite. A well communicated strategy is a guide to behavior, and can do wonders to help people everyday actions without the supervision of managers.

Every type of organization can and should trust the judgement of their employees and let them make decisions on their own. This is what it means to have no managers: Everyone is a manager when they can make decisions on their own for the betterment of the organization.

Organizations like Morning Star, W.L. Gore, Zappos, Nordstrom and Starbucks trust their employees to make the right decision without having to ask for permission. What you can learn from these organizations is that when employees feel trusted, they are much more likely to be creative. This in itself will help drive innovation because they’ll feel their ideas an input are valued which will then create enthusiasm and engagement in employees.

This is the point I want to make, when employees feel their ideas are valued and know hierarchy won’t stand in the way, they’ll take smarter risks. So if your organizations wants to innovate, ask yourself this question: Do my employees have decision making power? Do they have permission to do the right thing?

Bottom line: An organization that wants to have a culture of innovation needs to breed trust in its people. In organizations where trust exists, ideas trump hierarchy.