Hierarchical cultures stifle innovation, say experts


Wow! You mean flatter organisations where employees are empowered are more innovative?! That's radical. Has he read Tom Peters and Nancy Austin's book "A passion for excellence", I wonder? It said ...

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​HR must steer away from hierarchical work cultures to survive uncertain times, according to director of learning at the Corporate Research Forum (CRF) Nick Holley

Speaking at Unleash London at the ExCel Centre yesterday, Holley focused his 'Disrupt or Die' talk on how taking risks in business can help organisations avoid becoming “victims” of a rapidly changing economic climate.

“HR should not just be about recruiting the best people; it’s about recruiting all sorts of people who can transform the workplace. To do that we need to actively encourage [taking] risks, and actively encourage the idea that failure and mistakes can be valuable,” Holley said.

He explained that by creating a culture where mistakes are accepted it's then possible to push ahead with new ideas and innovation.

He added that collaboration is a key factor in helping to change the workplace. “In HR we can spend too much time creating relationships that stop us from collaborating effectively. Collaborating is something we’re hardwired to do; it makes us feel good and helps us to perform at our best. But when we focus too much on what’s happening at the top we’re holding ourselves back,” he said.

Making organisational hierarchies flatter is key, said Holley. “Organisations like Netflix and Spotify are starting to realise the problems with ranking, and have reaped the benefits of introducing flat ways of organising their teams," he said.

“Zara has been successful through sourcing around 70% of ideas from people at the frontline of customer service rather than from those at the top. It's been able to get data on what its customers need through talking directly to its people on the shop floor, feeding this back to people in product design, and getting a quick turnaround of products.”

Dan Simpson, head of people and leadership for Europe at Siemens, added: “At Siemens we’ve completely rethought the way we organise our company. We know that hierarchy disenfranchises people. We’ve tried to eliminate levels completely and work within a holacracy – a system where everyone takes ownership of culture as if it was their own.”


I'd encourage people to focus less on delayering which only improves efficiency at the expense of significant disruption and more on shifting organisation model. Netflix and Spotify haven't delayered, they've reorganised, in the broadest sense of the word. And no, Siemens haven't implemented Holacracy (which isn't heterarchical anyway).


It is over-simplifying things to just say "make the structure flatter". The real issue I find is that organisations have not set a clear strategic direction and haven't designed a structure that enables that strategy to be realised. Within the structure, roles are poorly designed with imprecise objectives set out. I am always puzzled that managers' role profiles tend to have the objective concerning their accountability for their team's performance AND development listed last. Very often, too, role definitions do not provide adequate indication for how that role impacts on the end user's experience of the product or service. The organisations named in this article remain hierarchies; the CEO is higher up the pecking order whatever is claimed, otherwise why is (s)he earned 400x what the front-line engineer or sales assistant is earning?


Wow! You mean flatter organisations where employees are empowered are more innovative?! That's radical. Has he read Tom Peters and Nancy Austin's book "A passion for excellence", I wonder? It said the same thing in 1985... In academia this would be called plagiarism, in HR it seems it's called radical new thinking! Cheers, Graham


Whether it’s delayering, reorganising, re engineering, the major metric needs to be how many levels of authority are needed for decisions to be made? How many functions? How many job titles?


I think David makes a great point here too - hierarchical thinking and hierarchical rewards influence an organisation much more deeply than hierarchal layers.

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