How can big businesses get back to the innovation and execution efficiencies they need to compete in the aggressive global markets of today?

In my last blog, I discussed the role of growth in cities and big business and concluded that big businesses across the world struggle to grow, due to inefficiencies in their operating model.  Furthermore that this was driven by falling transaction costs and that now was a more important time to innovate than ever before.

I’ve recently been listening to Creativity Inc. the story of Pixar told through the eyes of its president, Ed Catmull.  One of the key themes he discusses is the idea of empowerment of its employees, but how does one stimulate this whilst not losing control and momentum.  Enabling people to feel empowered through accountability and responsibility for their work yes, but there is also need to create passion.

Reflecting on many big businesses that I see today, hierarchy and operational performance metrics take passion away from frontline employees, who wish to deliver for their customers.  Whilst many managers want their employees to have this empowerment and passion, they also have concerns that creating these ‘flatter’ structures may destabilise the operating model into chaos and losses.  So how can this be avoided?  Holocracy may hold the key not just to getting the business to be more passionate about its customer, but also to unlocking innovation and growth.

Holocracy is an organizational operating model that removes hierarchical control within an organization whilst delivering clear accountability.  The holocracy model actually has more structure than the traditional hierarchical managerial models, but does this through creating smaller highly accountable and empowered teams with clear remits.  It shouldn’t really be a surprise that this model has emerged, considering the paradigm forces that advances in communication technologies have driven (see my previous blog).  There are many examples of businesses that are seeing success and sustained profits using this model, from Uber and Airbnb to Zappos and even Ed Catmull describes Pixar’s success through an organizational model such as this.

In my previous blog, I also discussed the role of social networks within cities as a key driving force for faster innovation rates and how innovation is generally much slower in big businesses in comparison.   So here’s the kicker, if senior managers want their businesses to innovate and grow faster they need to create ‘flatter’ organisational structures that empower their employees to take responsibly and become empowered so they can in turn empower their customers.

At Market Gravity, we are experts at empowering teams in big businesses to work together and make big ideas real, if you’d like to find out how get in touch.