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Is the hierarchy of your business killing creativity?

by | Jun 7, 2019

Research shows that the structural makeup of a company plays a big part in how innovation flourishes or fails. Key takeout? Hierarchy kills innovation!

How’s this for a novel idea? Rite-Solutions is a US software and systems development company who came up with a kind of ‘stock exchange’ for ideas.

Employees are given a virtual $10,000 to ‘spend’ on ideas that have been posted by their colleagues who will back the ones they think have legs. This sees their ‘value’ rocket and will take them on to the potential for buy-in (and real financial support) from senior management.

It’s an innovative way to be, well, innovative.

What it also does is democratize the whole creative process. By removing some of the power of veto away from senior management, it allows anyone in the organisation to have the chance of gaining backing for a viable idea.

Clearing a path for creative ideas

As part of the development of our new Leading for Creativity programme I’ve been exploring hierarchical structures in business to see how they affected the flow of ideas.

An article in the Harvard Business Review about a gathering of several leading businesses (Google, Novartis, IDEO) for a symposium in which they all agreed that bureaucracy stifles creativity.

The discussion acknowledged that it whilst it would be difficult to do business without some kind of hierarchy, that based on the experience of these creative companies, the best people to make a judgement call about an idea were actually those closest to the idea in the first place.

If these individuals could be divorced from emotional attachment to the things they’d been working on, they could weed out those ideas that were ripe for culling. One suggestion was to offer them “kill fees”, which pharmaceutical company Merck offers to employees when they abandon ideas they have been working on.

Could a similar strategy be applied to idea-owners to encourage them to give up on those ideas of theirs that they love – but which they know, deep down, aren’t right?

Great ideas crushed by senior management

 “Supervisors often reject innovative ideas because the individuals who developed them understand the novelty and applicability of them better than supervisors.” David Burkus

There are alternative solutions to challenge the status quo like Rite-Solutions’ ideas ‘stock market’. Adobe Kickbox offers real $$$$ with its $1,000 plus a starter kit – a physical kit in a box with tools and techniques to help generate and support new ideas – open to anyone in the organisation to get innovation experiments up and running.

Going a step further, businesses can adopt a flat (or at least somewhat flatter) management style. These have become popular in Scandinavia, and they typically revolve around the creation of multiple self-managing teams. By removing traditional reporting lines, these teams can make decisions more quickly.

A non-hierarchical structure

Digital marketing company Fountain have embraced the idea – they operate on what they call “a non-hierarchical structure.” Teams are organised into pods, and there is no hierarchical management within that.

Their MD Rebecca Lewis Smith says: “One of my favourite things about our new structure is that it gives ownership, accountability and responsibility to people, and every single team member is behaving like the adults they are rather than being infantilised by a hierarchical system.

Giving employees more freedom works in bigger companies too. Netflix was born when it scrapped conventions in the video rental market – a flat-fee service for unlimited rentals, no late fees, no shipping or handling fees and no return dates. Flexibility and creativity are at the heart of the business.

The HR team ripped up the rule book on conventional HR policies too which they viewed as out-dated. Netflix aim “to increase employee freedom as we grow rather than limit it, to continue to attract and nourish innovative people, so we have a better chance of success.”

“Responsible people thrive on freedom and are worthy of freedom”.

Expenses and holidays done differently

Netflix doesn’t have a 9-5 working hours policy and many people work evenings, weekends without being ‘tracked.’ This inspired the now more-commonplace ‘scrapping’ of official holiday. With the bare minimum of rules people can take up to 30 days without approval.

Rather than have compliance departments, rules and checks the expense policy is just five words:

“Act in Netflix’s best interests”

Netflix focuses on getting high performance from its employees, which must include flexibility, and what they term creativity and discipline. If people do make mistakes the mantra is to fix problems quickly which is a common theme in innovative businesses like Pixar.

Whatever your current business model there are tried and tested team structures that support innovation that go beyond just having the initial idea. According to innovation experts Govindarajan and Trimble the most successful model is:

Ideas + leaders + team + plan = innovation

What I’ve noticed in working with many businesses is that whilst there is often a very strong requirement and ‘will’ for creativity, the ‘way’ is not always thought through and resourced for the long-term. This requires focus and leadership for ideas to become actions.

If you or any of your team are charged with leading creativity in your business, why not help support them with the knowledge and skills tools they need to lead a creative team? Our collection of creativity training courses has been carefully developed to suit a multitude of different needs – creative leadership training included.

Contact Lucy on 020 3146 5586 or email lucy@nowgocreate.co.uk for more.


Don’t let your organization’s creative potential go untapped. Join our small, residential creative leaders programme to up your creative confidence and learn how to lead a culture of creativity underpinned by well-researched principles and methods. Find out more here.