Reward managerial innovation

Opportunities to simplify communication and processes are most prevalent at the base of a company where the product is made and client interactions occur. The people best equipped to innovate with customers are also at this level, since they are the most familiar with the current processes and can elicit direct feedback from customers about changes they have made or intend to make. Nevertheless, an inverse relationship often happens in a company: the top leaders are the most innovative and the lowest managers are the least. Etzkorn and Siegel’s research has found that “among executives and managers, the lower the position in the company, the higher resistance to innovation ((Siegel, pg. 158)).” Why is that?

I propose it’s the inverse power relationship present in most organizations that perpetuates the absence of innovation at the lowest ranks. Middle managers feel they must justify every change to their superiors and often settle into a rhythm which causes the least friction. In the rare event change does take place it’s the result of the top leadership’s directive and is therefore unquestioned. Thus, the people most connected to innovation opportunities are shut down while those least connected are able to enact changes unchallenged.

When innovation is stifled where the customer interacts and the product is built, a company has only a short time before it’s driven out of business by a company able to innovate. It’s not sufficient for the CEO to be innovative in any company over a couple dozen employees since the CEO can no longer faithfully understand every role in his growing company to make worthwhile changes to each role. Instead it’s critical that the CEO pass along the authority to innovate to his direct reports and communicate to the entire leadership structure that he wants them to innovate in their areas and gives them full authority to do so. He’ll probably also need to find and reward the first to respond at the lowest level because there’s the greatest pressure to minimize innovation at that level.

I have found simplicity a difficult argument to make in the positions I’ve had. Managers tend to assume that someone higher up has specific reasons for the current process gained from their wide vantage point. In practice, those higher up spend no time thinking about what I’m doing and will only squak if changes I make affect them. It doesn’t take many rejections before I stop making recommendations and keep what innovations I make within the limited purview of my day-to-day work.

If I make it possible for innovators to enact changes in their area of expertise, that can be an effective way to add value to an organization. This type of consulting work, where I can assist the top of an organization communicate with the people connecting with customers and building the product, is something I’m excited to participate in.

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