Bureaucracy is the enemy of innovation – here’s how to grow while keeping your firm’s entrepreneurial flair intact.
As startups become the new incumbents, their bureaucracies grow too, wringing from them the creativity, agility and entrepreneurial flair that made them successful. But need this be the case? Writing for Harvard Business Review, Gary Hamel and Michele Zanini explain that, while the average American working for a large company labours under eight layers of management, at the world’s biggest electrical appliance manufacturer, Haier, there are just two.
US firms have seen their productivity whither to almost nothing, but the Chinese firm goes from strength to strength, growing its gross profit by an average of 23% per year since 2010. The key, says Haier’s “renegade” CEO, Zhang Ruimin, is to “let everyone become their own CEO”. Here’s the blueprint.