As functional hierarchies grow larger, they tend to become more rigid, pushing decision-making authority up the hierarchy and away from where customer interactions take place. In this system, no single team or leader owns the full end-to-end product and customer experience, making it exceedingly difficult to implement customer-centric innovations quickly and effectively. As a result, frontline employees, who have the insights and inspiration to drive innovations where they are needed most, grow disillusioned and disempowered over time. Each time a team member comes up with a new idea, they are forced to push through a brutal gauntlet of approvals to get anything done. As this pattern repeats itself, teams and individuals eventually lose their will to innovate; the pain isn’t worth the gain.
Authors: Allison Bailey, Amanda Luther, Charles Gildehaus, David Allred, Sesh Iyer
Source: Boston Consulting Group (BCG)
Subject: Organizational Behavior
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