Innovation needs to be intrinsic and instinctual within our organisations if we are going to be able to adapt and thrive when met with future challenges.
As we move from a knowledge-based economy into a creativity-based economy it is initiative, creativity and engagement that will be sought out in the work force. Yet the internal hierarchal structures in our companies are inhibiting, rather than aiding this.
Gary Hamel, one of the world’s most influential business strategists and leading advocates for management innovation states that this will never be achieved unless we do away with the bureaucratic structures within our organisations.
“To build organisations that are adaptable at their core, we will need to rework every management process so it enables, rather than frustrates, breakthrough thinking and relentless experimentation.” – Gary Hamel
In his recent article Why bureaucracy must die, Hamel outlines that top-down management systems:
- Add overhead – by creating multi-tiered structures where hundreds of managers spend their time managing other managers.
- Create friction – by forcing new ideas to run a multi-level gauntlet of approval that creates significant lag time.
- Distort decisions – by giving too much power to senior executives who often have an investment in older processes.
- Misallocate power – by rewarding those who are the most politically adept rather than those who are the most capable leaders.
- Discourage dissent – by creating asymmetric power relationships that make it difficult for subordinates to speak up.
- Misdirect competition – by encouraging individuals to compete for promotion and political advantage.
- Thwart innovation – by over-weighting experience and under-weighting unconventional thinking.
- Hobble initiative – by throwing up barriers to risk-taking.
- Obliterate nuance – by centralising too many decisions and demanding compliance with uniform rules and procedures.
Organisations spanning a diverse range of industries are making progress in addressing these restrictions: employees are nominating their own leaders, larger companies are fragmenting into smaller autonomous centres, employees at every level are participating in open innovation process to build company strategy.
However this is the still the exception and not the norm; most leaders are still “fiddling at the margins” – acknowledging that something needs to change, but doing very little to enact any.
We need adaptable organisations now more than ever. The market leaders of the future are going to be those companies who have revolutionised their internal structures in preparation of the challenges ahead, not in reaction to them.
“In any social system where authority is concentrated, you find a lack of adaptability.” – Gary Hamel
Read Gary Hamel’s full article; Why bureaucracy must die here