, , , , ,

“Like it or not, effective hierarchy is more efficient than self-organized whatever.” @tom_peters

The Innovation and Bureaucracy Paradox

How do you create an organization where creativity is unleashed, morale is high and breakthrough results are consistently delivered? The answer: establish a better bureaucracy.

For many people, just the thought of creating an innovative culture through bureaucracy seems crazy. The conventional wisdom is that managerial hierarchy kills initiative, squashes creativity, and creates an organization resembling a Dilbert cartoon. However, as Tom Peters tweeted, there is a place for an effective hierarchy.  And as history shows us, the most innovative systems actually need bureaucracy to thrive.

Even innovation needs some structure

  1. Christopher Langton observed several decades ago that innovative systems have a tendency to gravitate toward the “edge of chaos”: the fertile zone between too much order and too much anarchy.
  2. 35 years of research convinced Elliott Jaques that managerial hierarchy is the most efficient, the hardiest, and in fact the most natural structure ever devised for large organizations to release energy and creativity, rationalize productivity, and actually improve morale.
  3. In his book, Where Good Ideas Come FromSteven Johnson noted that “Even with all the advanced technology of a leading molecular biology lab, the most productive tool for generating good ideas remains a circle of humans at a table talking shop” – the staff meeting.

Cover of "Where Good Ideas Come From: The...

Building an Effective Hierarchy

Setting up a system that balances control and anarchy is the key to building an effective hierarchy. Earlier in my career, I assumed responsibility for an organization that was fiercely independent and entrepreneurial, ie code words for an organization that fell on the side of too much anarchy. As I went about creating a managerial framework for the year, all the classic complaints came out;

  • this is too much bureaucracy,
  • you’re micromanaging me,
  • I don’t have time to get the job done,
  • blah, blah, blah.

After a few months with ‘visits’ and phone calls from Corporate, the organization began to turnaround (The Homebuilder Case Study). We started to see breakthrough results, increased morale, and innovative solutions to age-old problems. The framework that we implemented was based on the concept of “time span of control” which finds the balance between too much order and too much chaos.

Why does it work?

  1. Depending on the role, capabilities and experience, the time span of control allows people to work unsupervised and have an opportunity to win or lose before coming up for air – it stretched the staff personally and professionally.
  2. Formal meetings at fixed intervals ensured that the entire staff was available to discuss critical topics. Open discourse was encouraged and people were free to challenge each other exposing blind spots and identifying opportunities.
  3. These formal meetings brought people with different experiences and perspectives to the table that were applied to a problem set. The end result was that the collective team developed a better solution.

The idea of an effective hierarchy is all about balance. Too much hierarchy can clearly crush an organization’s spirit and the lone wolf innovator / eureka moments are rarities. Thoughtfully setting up a managerial hierarchy based on the “time span of control” allows people to succeed and fail, communicate with and challenge each other, and to take advantage of “knowledge spillover” which results in an innovative culture.

I agree with @tom_peters, given the choice between self-organized whatever and an effective hierarchy – I’ll take a well run bureaucracy anytime.

Related articles