Management Go-Slow

In chaotic times, an executive’s instinct may be to strive for greater efficiency by tightening control. But the truth is that relinquishing authority and giving employees considerable autonomy can boost innovation and success at knowledge firms, even during crises. Our research provides hard evidence that leaders who give in to the urge to clamp down can end up doing their companies a serious disservice.

Although business thinkers have long proposed that companies can engage workers and stimulate innovation by abdicating control—establishing nonhierarchical teams that focus on various issues and allowing those teams to make most of the company’s decisions—guidance on implementing such a policy is lacking. So is evidence of its consequences. Indeed, companies that actually practice abdication of control are rare. Two of them, however, compellingly demonstrate that if it’s implemented properly, this counterintuitive idea can dramatically improve results.

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Furthermore, we’ve found that contrary to what many CEOs assume, leadership is not really about delegating tasks and monitoring results; it is about imbuing the entire workforce with a sense of responsibility for the business. This applies mainly to knowledge organizations, but even production-oriented companies can benefit from having employees who feel more empowered and engaged.

If abdication of authority is to yield value for the corporation, however, individuals must be self-motivated. CSC Germany does this by allowing employees to work on the one of five topics that best utilizes their talents and excites their interest. This involves joining a topic community, such as the one focusing on strategy and innovation. Issues are discussed in these groups until all participants come to an agreement, and leadership within the groups shifts frequently, settling on individuals who have the most competence in the areas of focus and are accepted by others as leaders.

We call such practices “mutualism.” It involves measuring workers not against revenue or other numerical goals, which we have observed to be ineffective as motivational tools, but against qualitative values such as trust, responsibility, and innovation. And it implies that leaders don’t dictate vision or strategy; instead, they enable employees to create a common vision through, for example, off-sites for discussion of strategic issues and regular feedback and education. Hitting numerical goals has been the natural outcome.

From "To Be a Better Leader, Give Up Authority," by A.D. Amar, Carsten Hentrich, and Vlatka Hlupic, in the December 2009 issue of the Harvard Business Review.

"No modern factory could function for twenty-four hours without [the] spontaneous organization of work that groups of workers, independent of the official business management, carry out by filling in the gaps of official production directives, by preparing for the unforeseen and for regular breakdowns of equipment, by compensating for management's mistakes, etc."

From "The Proletarian Revolution Against the Bureaucracy," by Cornelius Castoriadis, in the December 1956 issue of Socialisme ou Barbarie.