As companies grow, it is inevitable that more hierarchies will be created.
This is because after a certain size, it is essentially impossible to keep track of the relationships between everyone and what everyone is working on.
Contrary to popular belief, hierarchy is not always a negative.
In fact, as Start-ups grow, they will eventually need to develop layers of management to stay productive and efficient.
However, as layers of management build up on top of each other over time, there is a danger of developing a “Ladder of No“.
And this ladder of No can have a devastating impact on an innovation culture within companies.
Essentially, every idea an employee has needs resources in order to be turned into an innovation project. Resources like money, a team and time away from an employees other duties.
And often, it is not clear who is allowed to allocate these resources.
It is not clear who can give a “Yes” to the employee.
Suppose we have an employee who has an idea for an innovation, and their chain of command in the company looks like this:
Employee → Team Lead → Project Manager → Program Director → Department Lead → Regional Vice President → Regional General Manager → Chief Financial Officer → Chief Executive Officer
Each layer of management is like a rung on the ladder climbing upwards in the corporate hierarchy
The employee is likely to be primarily in contact with their direct manager, which in this case would be their team lead, and ask them for the resources for the innovation idea.
However, the Team Lead might not have the authority to give those resources, so they ask their Project Manager.
The idea is outside of the Project Manager’s remit, so they ask the Program Director, who asks the Department Lead, and so on.
Often, it is only the senior positions who are allowed to make decisions around resource allocation, especially when it comes to changing what employees are working on. And the more senior the leaders are, the more likely they will want to see justifications for why the idea should be supported, using something like a business case.
So the employee would need to get 4, 5 or 6 “Yeses” in a row in the ladder in order to get approval.
And what happens more often in reality is that at least one person in the ladder will not want to support the additional work, say “No” and then the idea stops there. It never travels further because the first No on the ladder killed it.
This is why it can be so important to set up innovation pools where multiple small ideas can get the initial resources they need with minimal bureaucracy.
That way, you have far fewer people on the ladder who can say “no”, when all you need is one “yes”.
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