I once worked with the new CEO of a well-known global firm that was barely breaking even. His mandate from the board was to improve profitability.
To do this, he planned to institute global manufacturing platforms so that product “families” would have the same core design no matter where in the world they were sold. The cost reduction would save tens of millions of dollars.
This initiative would take a few years of hard work, so the CEO tapped the president of the North American division to take the lead on a full-time basis.
The president, let’s call him Bill, had been with the company for many years, understood the engineering and supply chain issues, and was highly respected by everyone.
The only problem was that Bill thought the assignment would be personally embarrassing.
“Look,” he said, “I currently have 10,000 people reporting to me and responsibility for the largest P&L in the company. If I ran a task force, everyone would think I was being put out to pasture. It would be better if you just fired me.”
The shocked CEO stood his ground and argued that Bill was the perfect fit for the assignment and that it was critical for the company. Eventually Bill gave in and his new position was announced. Sure enough, in the days that followed, Bill received dozens of e-mails and calls offering consolation on his “demotion” and help in finding a new job elsewhere. The head of human resources even asked the CEO whether Bill’s job grade and performance bonus should be reduced. Not one person congratulated him.
Why do people assume that a big title trumps a value-creating initiative? The answer is that hierarchy is more than just a way of designing the organisation.
It drives how we think about relationships, contributions, careers and success. Most of us have grown up assuming that career success is vertical.
We climb the ladder and move from junior positions to senior ones. As such, we implicitly compete with others because there are fewer positions as we advance. It’s like the reality TV show where people get kicked off the island.
The problem with this paradigm is that today’s work is no longer divided up into small tasks that require higher and higher layers of management to put together.
Instead, most work is accomplished through horizontal processes that cut across different functions, geographies and specialties.
Therefore, real success comes less from controlling the people who report to you, and more from the ability to align the stakeholders who surround you.
Given the hierarchical structures of most organisations, we will still have upward career paths.
Ashkenas is a managing partner of Schaffer Consulting and a co-author of ‘’The GE Work-Out’’ and ‘’The Boundaryless Organisation.’’