My first business partner taught me something very valuable: The worth of captains and lieutenants in the military, which you can extend to the business environment. During the Cold War, NATO had a significant disadvantage in the number of forces it had versus the number that the East Bloc possessed. It was a widely held belief, however, not only among NATO leaders but also military academics, that the two sides were very evenly matched and in an actual battle the western forces would hold their own or prevail despite the numbers.
Even now, you see many of the forces that oppose the west (such as ISIS and al-Qaeda) score large successes against much better-equipped opponents. Part of this success can be attributed to the power of local commanders in these forces.
Midlevel officers make the difference
The strength of NATO’s mid-level officers was credited with closing this gap. While Eastern Bloc mid-level officers were taught to blindly follow orders from their superiors, or suffer harsh consequences, Western mid-level officers were given great autonomy to make battlefield decisions without waiting for direction or even contravening standing orders that were overtaken by events. By having strong leaders who had the independence to make decisions, western military forces were at a competitive advantage. (And let’s not forget, Captain Kirk never got into real trouble for crossing into the neutral zone and the Federation regularly beat up on the more militarized Romulans and Klingons.) Continue reading “It is about your Majors, Captains and Lieutenants”
Last month I wrote about how Haier fosters innovation in large part by eliminating middle management and having a very flat organization. For those who may have thought Haier was an outlier or that this was a uniquely Chinese situation, it was recently reported that Zappos (the online shoe store owned by Amazon) is employing a similar structure.
The system, known as Holacracy, removes all job titles and managers in a corporate structure, leaving nearly every employee on equal footing. Zappos will create approximately 400 “circles” made up of a group of employees that will be tasked with projects. The group must work together, without a formal control structure, to do their jobs.
Continue reading “Another vote for eliminating middle management”
I recently read an article in the Economist that credited Haier’s success to its CEO’s (Zhang Ruimin) decision to eliminate middle management. The move generated innovation that any Silicon Valley start-up would be proud of. I was not expecting a large Chinese firm to lead the way in being nimble and customer driven but it worked for them and I could see it helping many US companies, particularly game companies.
As a little background, Haier has sales of over $25 billion, is recognized globally for reliability and marketing expertise and has seen its market share grow from 3.1 percent to 9.6 percent.
Haier’s 80,000 employees are organized into 2,000 zi zhu jing ying ti (ZZJYTS), self-managed teams that perform many different roles. Each is responsible for profit and loss, and individuals are paid on performance. Continue reading “Consider getting rid of middle management”