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The Sweet-and-Sour Relation between Organisational Hierarchy and Innovation

Imagine a random day at HP; like any other tech giant, innovation thrives at its business’s core. Under the shadows of its office desk, an employee plotted a creation. An employee, an innovation, and a five times disapproving grant from higher-ups – that’s all it took for Steve Wozniak to start Apple, a company that redefines innovation in its every move. This decision of Wozniak is considered a pivotal move for the thriving innovation of Apple Inc. that we witness today. But it also gives the portrayal of the organisational independence it requires for innovations to flourish. In today’s organisations, hundreds and thousands sow the seed of innovation, dreaming of revolutionising society and the lives around them. But in most cases, the stretched-out ladder of a stiff organisational hierarchy stands prominent, making the climb more challenging than it should be.

Think of any facility around you, the super shop where you run back and forth for necessities, or the workplaces you dream of landing on one day. The need for a hierarchy is innate in any organisation’s existence. But one question remains unanswered: is the hierarchy hindering the best of its potential in the process?
Traditionally, organisational hierarchy is a management tool. It is implemented to give the people a clear idea of their roles and purposes in the organisation. The organisational hierarchy is important for the control and compliance of a business, but frequently, this order discourages disruption and innovation. One important context in this manner is about finding the perfect balance between these two from an industry perspective. When a tech company prioritises innovation, the banking or healthcare sector requires more compliance and adherence.
Finding this distinct industry-specific balance is tough for organisations. And the result? Some of the major business failures shook industries. A poor organisational hierarchy does not just fail its businesses; it fails the consumers who see innovations as an indication of the company’s consumer centrism. What can be a better example than Kodak, the company revolutionising photography? While our Instagram stories proudly promote Kodak filters, Kodak failed to keep up with the wave of digital in an era where Kodak’s risk avert management focused on film-based production, considering the stable nature of its revenue. But soon after, this decision ‘not to go digital’ cost Kodak its whole business, leading it to bankruptcy. And Kodak was lost, leaving away the story of a rigid hierarchy that discarded innovation.

Then there’s the infamous Nokia; the durability and quality products offered by Nokia made the company a booming company in the scene. But its rigid structure, along with its internal politics, cost the company the first mover advantage on touch screen phones. Nokia, which took the market by surprise by acquiring Motorola, turned into an irreversible failure when its hierarchy refused to embrace change and innovation. A late attempt to follow the path of its competitors without much innovation to survive, Nokia only recalled its doom.
There are thousands of examples, from tech giants to the ones still in infancy, that failed because of a rigid organisational hierarchy. And most of it gets blamed on the ingrained organisational culture and authority bias faced in the process. Often, there’s a silent rule for the newer employees of the organisations,’ Listen to your company for at least a year before it listens to you.’ This stifling culture silences the newer recruits or the lower management who are considered full of potential yet comparatively fresher in the scene.

For similar reasons, employees with highly specific job responsibilities and non-flexible schedules are often left out of the innovation landscape.
But the list hardly ends here. Organisations that put policies and regulations over employee well-being and discard easy communication methods often find themselves in the loop as well. Another significant problem with the situation is the authority bias. For obvious reasons, management values the expertise of employees that comes with age.

This reliance on higher-ups creates a top-down communication system, causing an authority bias. This silences and discourages the opinions of the aspiring leaders and innovators who are the drivers of the company. Organisational hierarchy does not limit them, but a rigid organisational hierarchy shuts down the driving force, creating dooms for a company.
Stifling innovation by sticking to rigidity is easy, but overcoming the problem by embracing strategic management and change is what makes a workplace exceptional. As shown in multiple types of research, the bias that stifles innovation by adhering to traditional perspectives can be broken by reshaping the organisation around a few principles. A major part of it requires a matrix structure with a high level of collaboration and a decentralised information flow. Making enough room to curate innovation requires a balanced approach to people management as well.
While adhering to the rules is important for business, giving employees autonomy and freedom is also important. An organisation’s traditional hierarchy creates a ‘necessity evil’ when innovation and consumer needs are at stake. But in most cases, the perfect result hides in balancing the sides and most of it depends on the management that runs the core. It is said that only change is constant. Welcoming change can transform businesses with success. However, embracing change requires diligence and collaboration. So, are you brave to embrace it?

Author- Subeh Tarek

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