The Hidden Cost of Leadership and Management As Usual

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Gary Hamel was recently ranked by the Wall Street Journal as one of the world’s most influential business thinkers.  Speaking on Innovation at the World Business Forum in Sydney in May he too offered a similar challenge to other speakers “are we changing as fast as the world around us?”.

He suggests that the world is becoming more turbulent, faster than the businesses are becoming resilient.  In 2008 Barron’s Magazine named the top 30 CEO’s in the world, five years later only five of those CEO’s remain in their current roles.  Microsoft, Intel, and HP, three major players in the technology space, all failed in their early identification of the rapid global shift to mobile technology.

He contends as companies grow larger and larger, they trade freedom to operate and to innovate for controls through ever increasing bureaucracy which is the most rational means of maintaining control over human beings.  In our work with organisations around developing performance cultures we see this repeatedly manifest itself in passiveness where people are more intent on being good and not making waves than focusing on activities that allow them to support their people to deliver excellence and drive clear outcomes.

Bureaucracy fosters hierarchy, rules, fear and precedent.

Take a moment to consider how much human potential is wasted every single day because of bureaucracy.  In tightly controlled bureaucratic structures:

• Strategies are set from the top
• People are systematically disempowered
• Remuneration correlates with position
• Resources are allocated centrally
• Innovation is discouraged
• People compete for promotion
• Conformance is promoted and valued
• Formal hierarchies are standard
• Standardisation is the norm
• Competitive effort is so often misdirected

Removing bureaucracy allows for momentum and for organisations to tap the intellect, initiative, imagination and passion of people at every level. To achieve this it requires organisations to fundamentally change their approach.  Here are some suggestions Gary Hamel offered for consideration:

• Reduce the span of control
• Promote meritocracy
• Flatten structures and abolish titles
• Crowd-source strategy by engaging all stakeholders at every level to allow them to have a voice and to make a contribution
• Work with differing ideas
• Be honest and open
• Promote experimentation and learn from mistakes
• Ensure financial transparency
• Allow people to elect their leaders
• Set remuneration through peer review
• Operate based on clearly defined actively lived set of Core Values

If we don’t face reality many organisations today will continue to operate under worn out management and leadership assumptions and the notion of business as usual.  Instead, if organisations are to be fit for today and tomorrow, leaders have to find new ways to build adaptable, inventive, and inspiring organisations, otherwise they risk the same fate as the dinosaur. What’s it going take?


Vivente Australia enables leaders and managers develop the bond between people and performance, creating a powerful advantage: the synergy between people, leadership, management, and culture, produces performance that allows your business to achieve its best.

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