Beyond Hierarchy

The following was excerpted from the book: "The Creative Spirit, by Daniel Goleman, Paul Kaufman, and Michael Ray. New York: Dutton (1992):

The need for hierarchy is, for the most part, an unquestioned assumption in the business world. As Anita Roddick observes, "Business is an institution that is deeply conservative. In England, it's run on the principles of hierarchy, much like the military. God help you if you park your car in the managing director's space."

While success in a hierarchy has its privileges, it can also exact a terrible price. Along with a top position comes the fear of losing that position. To protect himself, a hierarchical manager will often seek to eliminate threats by controlling the flow of information. Disturbing or disappointing information is suppressed. The inflated body-counts and calculatedly optimistic "light at the end of the tunnel" forecasts by those managing the Vietnam War are good examples of hierarchy run amok.

Climbing the hierachical ladder can mean keeping potential rivals in the dark, even if those rivals are co-workers with important contributions to make within the firm. It can mean devaluing or discounting information that doesn't confirm expectations or meet predetermined goals. The destruction of the Challenger may have been due, in no small measure, to management's unwillingness to give full credit to disturbing engineering information about faulty O-rings.

Traditionally, the allure of a hierarchical system has been that it permits those at the top to transmit instructions to large numbers of people, with little or no fear of contradiction. The ancient model for this was kingship, with its core assumption that all wisdom and knowledge emanated from a divinely inspired authority. As history shows, one result of this conceit was that hierarchical systems were shot through with deception and often murderous unrest as people struggled behind the scenes for power. Although the hoary tradition of unquestioned authority-once exemplified by the priesthood and the military-has never completely disappeared from business, it has clearly lost its usefulness.

One reason is that managers today rely not so much on instructional information. Jan Carlzon, president and CEO of Scandinavian Airlines System (SAS), explains that information is the opposite of instruction. "Instruction tells you what you're not allowed to do, what your limits are," he says, "But information tells you about your possibilities. A person who has source information cannot escape taking responsibility."

The style of management in which information is hoarded at the top and decisions flow only from the top down leads to work done mechanically, without inspiration. Jan Carlzon says, "We controlled people at work by giving orders and instructions, telling them down to every detail what they should do out there-although we never had any real feeling for or information about what the customer really wanted. The worst of it was that the instructions really amounted to telling people what they were not allowed to do; it was just a way of limiting their responsibility.

"But what you need to do today is open things up so people can take responsibility," Carlzon adds. "You have to give them the authority they need to make decisions on the spot. You do that by telling people where you want to get to as a company, and the strategy you want to use to get there. Then you give the people the freedom within the limits of your business strategy to act on behalf of the company."

Last updated 20 March 1999

by Duen Hsi Yen


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