6 Ways Corporate Hierarchy Is Destroying Your Business

An Op-Ed by Dan Price First Published By Inc Magazine

Do you remember playing the telephone game as a child? You and your friends would sit in a line and one person would whisper a phrase to the person next to them. This would continue until it reached the final participant who would say the phrase out loud. This usually resulted in the entire group laughing.

Why?

Because along the way, the message would get distorted. The final interpretation of the message is completely different than what the first person originally intended. This is the exact same thing that happens when you have a traditional corporate hierarchical structure.

A corporate hierarchy creates barriers between executives and frontline employees. Typically, frontline employees are the ones who interact with and have the most knowledge about a business’ clients, not those at the top who are far removed from the day-to-day operation.

So, why shouldn’t those with the most information be the ones making strategic decisions for customers? At my company, we have a flat hierarchy because everyone is a strategic decision maker.

There are many ways in which a traditional corporate hierarchal structure can destroy your business. Here are six:

1. Having your leadership team in private offices

Private offices help you as a leader because they give you the ability to focus, but because of human nature, when a door is closed, your team members tend to distrust you.

Pull leadership teams out of their offices and put them out with those on the front lines. When you lock people behind doors, it creates an “us versus them” mentality and they don’t see themselves as part of the team.

2. Reverse delegation

When your colleagues ask you what they should do, instead of telling them the answer, ask them to come up with an analysis and recommendation on what they believe is the right thing to do.

This puts the responsibility in the hands of the person with the most information who can make the best decision possible for your company or client.

3. Not acting upon feedback immediately

When you have the opportunity to follow through on a request you receive, do it–especially small ones. Instead of going up through a hierarchical chain, have the one receiving feedback act upon it immediately.

For example, at my company, we had a team member who requested a noise machine in the bathroom because it made them more comfortable. We put one in the bathroom the same day.

According to TINYpulse–a one-question weekly survey we use–the action most correlated with employee satisfaction is leadership listening and acting on employee feedback. You can’t act upon every single thing, but if you can, do it instantly.

4. Leading from behind

You can’t manage salespeople from behind a desk. You have to be out in the field selling alongside them. You can’t manage software developers from behind a desk. You’ve got to be up there out front, learning alongside them.

We all want those inspirational leaders who are willing to go do the work. We don’t want managers who sit behind a desk and tell us what to do, but don’t contribute themselves. People will pay attention to what you say, but they’ll really pay attention to what you do.

5. Under communicating

There are a lot of things I don’t like about Goldman Sachs. But did you know the CEO, Henry Paulson, did one powerful thing on a daily basis?

Prior to email, he spent a couple of hours every night calling people to leave FYI messages on their voicemail with no action item required. By doing this, he recognized that keeping everyone in the loop leads to gold mines.

As a leader, you need to be completely obsessive about your communication. Make sure every single person in the organization knows what everyone and every department in the company is doing.

This is especially important when there are two departments that don’t work closely together. Too often, we don’t want to bother each other, so we forget to loop others in.

With the power of email, we have the opportunity to over communicate. And I don’t mean just adding someone to CC or BCC–that’s abuse. Keeping someone in the loop should be you specifically writing them a note saying you think it’s important they’re filled in on something.

6. Not having a mission your team cares about

At Gravity, we want to make credit card processing fair. We work hard every day to fulfill that mission because independent businesses make our lives so much better. Sticking up for them is what matters.

When you have a cause, people are passionate about, you can all be accountable in a different way. It’s less about top down accountability and more about accountability to a cause. This allows everyone to feel like an equal player in the success of the company.

This article first appeared on Inc.com.

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