Designing an innovative organization doesn’t necessarily mean a “flat” organization. We tend to believe that innovation and hierarchy are antithetical, but in truth, innovation often thrives in hierarchical organizations.
Sam Ladner argues innovation and hierarchy can perfectly co-exist, provided a number of principles are adhered to.
Below are excerpts only, the original article has links, references, and examples.
(for the P2P Foundation’s point of view, see here, where we examine under what conditions peer production out-innovates hierarchical for-profit based innovation)
1. The argument:
“The reality is that large organizations in today’s global economy require some form of hierarchical control. This is a requirement of both capitalism and the sheer scope of modern corporate life. Alfred Chandler (1977) showed how the growth of the railroads required detailed project management, making 20th century management both rational and hierarchical. 21st century management must grapple with the same issues of synchronizing the schedules of employees across multiple time zones, and grappling with constant changes in the competitive landscape and the economy. “Democratic” innovation is messy, time consuming, and difficult to manage. For this reason, many companies like Apple have created controlled environments in which innovation can occur.”
2. Features of innovation that can be embedded within this hierarchical system
* Creating Flow Through Non-Time Measurement:
“Innovative teams are those that are insulated from time-based metrics of productivity. Working for one hour on a rote task is not equal to working for one hour on a groundbreaking project, yet oftentimes organizations treat these hours as exactly the same.
My research on time in interactive agencies found that time-based metrics frequently interrupt “flow,” making it difficult for designers to work creatively. Organizations that want to optimize creativity must abandon time-based metrics of performance.
* Stop Lying About Democracy
Rare is it today that an individual truly doubts the need for some form of hierarchy in a profit-seeking company. But pretending that hierarchy doesn’t exist is corrosive. Organizations that continually fail to live up to their democratic ideal must continually tell lies to mask this gap. Over time, this gap renders real democracy meaningless.
* Be Democratic When It Matters:
Creative people can take direction, even when it infringes on their work. But they must have a say in what infringements are negotiable. The biggest mistake managers can make is assuming that the bounds of hierarchy is understood equally by everyone; they are not. Accept that democratic rule can and should happen, even when it affects timelines. Be unfraid to collectively identify what is negotiable and what is not. Most people do not question the legitimacy of authority, but they do question the legitimacy of lack of debate. In the end, innovation can occur in hierarchical organizations. The democratic ideal provides an aspirational model but don’t be afraid to accept that it is an ideal, at times.”