Moonshot under the Microscope: Eliminate the pathologies of formal hierarchy

Formal Hierarchy

“After all the machinery of bureaucracy—detailed operating procedures, narrowly defined

roles, close supervision, and clear approval criteria—keeps employees in check. Undoubtedly,

everyone would be better off today if bonus-chasing bankers had been kept on a shorter leash.

Control is critical, but all too often it comes at the cost of initiative, creativity, and passion—the

essential building blocks of organizational success”. (Hamel, 2010) That being said, the goal of

tomorrow’s corporate strategists should be to inspire and unleash talent wherever the potential lies.

All too often, young, ambitious professionals such as myself, embark on careers in large,

prestigious companies that have strong, salt of the earth kinds of names only to meet bureaucratic

impasses where instead there should have been free-form idea incubators. Hamel’s description of

a highly “boxed” workplace, as Yves Morieux is oft to say, works perfectly well in an environment

that thrives on equilibrium--that is, the absence of change--or pointed decline. However, assuming

that firms are able and willing to pursue change that will result in improved market position,

enhanced financial standing, and increased employee well-being/satisfaction; a new model is

needed.

In the early days of my time at company, I had the energy and desire to exhaustively curry

favor with various leaders in middle management who I felt had the power to enable me to bring

my ideas to fruition or at least the political capital to influence those who truly did have that

authority. However, time and time again my initiatives were quite diplomatically dismissed at face

value, due largely to the fact that I was a new member to the team but also due to the inherently

onerous nature of bringing about change in a strictly vertical power structure. The latter of course

was the most pernicious of the two because people who still had the unfortunate spark of

innovation after having spent many years at company, those who intimately knew what changes

were needed to make it a great company, were jaded by the stifling corporate policy. Therefore

instead of taking initiative, they continued using the wrong tool or executing an inefficient process

in accordance with protocol. This takes an eventual toll on the morale of employees en masse

regardless of job description, department or even pay grade. This is a most insidious effect because

it is so fleeting and therefore cannot be measured in a Key Performance Indicator or corrected by

Root Cause Corrective Action analysis. Instead it metastasizes into the tribal knowledge of the

workforce that if you have a bright idea, this place isn’t for you. It largely retards the growth of

individuals which in turn keeps the entire organization from reaching its full potential and

capturing growth opportunities. It also leads to a disjointed effort when attempting to manage

change and complexity which are general facts of life in business. Therefore, “firms organized

around small, autonomous teams are much more nimble than large hierarchies. This makes it easier

to respond to change”. (Kastelle, 2013) Thus even in a most regulated industry such as aerospace

manufacturing, the efficacy of stringent, formal hierarchies which were designed to restrict

spontaneous creativity and innovation especially from the lower rungs of the organizational

construct; just don’t cut it in today’s complex business ecosystem.

Moonshot

“It’s far better to rely upon a broad base of individuals and leaders who share a common

set of values and feel personal ownership for the overall success of the organization. These

responsible and empowered individuals will serve as much better watchdogs than any single,

dominant leader or bureaucratic structure.” (Kelly, 2013) Therefore, I see this moonshot as not

only viable but widely applicable to a panoply of business profiles operating in disparate industries.

Many detractors point out that most successful companies who are able to employ flat structures

are tech-oriented and are more heavily reliant on continuous innovation and design centric group-

think. So a horizontal hierarchy shouldn’t have blanket applications to firms that produce standard

goods and rely more heavily on consistency and routine. However, one shining example, in

operation since 1958, is W.L. Gore, maker of Gore-Tex and a host of other remarkable materials

with countless applications that serve a multitude of industries. They face the same constraints that

any other original equipment manufacturer does yet they maintain their impressive market position

under the leadership of a democratically elected CEO. That’s right, an executive that the employees

actually want to make the high-level strategic decisions that invariably affect them in some way.

Gore is composed primarily of self-managing groups of 8-12 members and as CEO Terri Kelly

alluded to in the previous quote, power is more uniformly distributed, which enhances initiative

and accountability of a more inspired workforce.

To fully understand Gore’s story and its atypical structure, one must understand a bit of its

history. Bill Gore, a chemical engineer who left one of the biggest corporations of historic and

current times, DuPont, and founded W.L. Gore & Associates with his wife--which in itself evinces

his proclivity to share--wanted to establish a company that would encourage creativity and the

conception of new ideas through open collaboration. “He wasn’t simply interested in inventing

new materials or selling products, he was bent on creating an entirely new kind of company—one

that unleashed and inspired every person in it, one that put as much energy into finding the next

big thing as milking the last big thing.” (Hamel, 2014) Gore wasn’t thinking as much about P&L

as he was concerned with organizational culture and its members that formed a self-regulating,

free-body. One that determines its own course and exhausts its own creative inquiries, which

ultimately benefits the whole company as a natural by-product. If W.L. Gore, whose business plan

is largely aligned with the brick and mortar widget makers of yesterday, can realize the benefits of

flat hierarchy, product-service mixed and strictly service oriented businesses of tomorrow are hard

pressed to follow suite.

Works Cited Gary Hamel, Innovation Democracy: W.L. Gore’s Original Management Model, MIX http://www.managementexchange.com/story/innovation-democracy-wl-gores-original-management-model Tim Kastelle, Hierarchy is Overrated, Harvard Business Review //hbr.org/2013/11/hierarchy-is-overrated/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%253A+harvardbusiness+%2528HBR.org%2529&cm_ite=DailyAlert-112113+%25281%2529&cm_lm=sp%253Adan%2540danerwin.com&cm_ven=Spop-Email Lisa Wirthman, Is Flat Better?, Forbes Online http://www.forbes.com/sites/sungardas/2014/01/07/is-flat-better-zappos-ditches-hierarchy-to-improve-company-performance/