Freedom Vs. Permission

Six Sigma betters an organization at all levels. At the highest level, this involves moving the entire organization from three- or four-sigma business processes to six-sigma business processes, which requires reducing defects by a factor of more than 20,000, completely transforming the organization’s culture. But this can’t be accomplished by simply tweaking the process; it requires creativity. And the greatest enemy of creativity is hierarchy.

Because hierarchy in a traditional firm controls all of the resources–material and human–an individual employee must obtain permission from someone to use

any resource. If the resources required to pursue a creative idea are controlled by several positions in the hierarchy, the employee must get permission from each. And when one asks permission, only a “yes” answer moves things ahead.

Getting permission is like passing through a series of filters. Each non-yes blocks further progress. Perhaps the employee’s immediate superior is a kindly person who gives her permission half of the time. In fact, let’s assume that all of the people in the chain give their permission to half of all employee proposals. Consider a project requiring resources from five departments and permission from two people in each department. This is a pretty simple project and pretty flexible management.

Yet 99.9 percent of the creative projects will be rejected by this system. The hierarchy doesn’t seem so much a creativity filter as it does a black hole. Nucor Steel’s Chairman Ken Iverson puts it succinctly in his book Plain Talk (John Wiley & Sons, 1997):

“It is hard to picture any idea–no matter how wonderful–actually making it all the way up from an hourly employee through 10 layers of management without being fatally diluted or commandeered by a higher-up. And executives wonder why employees are sometimes apathetic about suggestion systems. The reason is clear–far too many of the ideas that people offer lose momentum and die, like spawning salmon forced to scale too many waterfalls.”

Permission is less likely to be forthcoming when the creative idea is a threat to someone in the permission chain–and it always is. A creative idea, by its nature, is destructive to the status quo. In a firm, as in the economy as a whole, the creative is usually the destructive as well. Perhaps it will eliminate the need for some process step; then it’s a threat to whomever’s responsible for that process. Maybe it’s a totally new product, which is a threat to everyone making existing products because they may lose resources to the new product. It’s difficult to conceive a creative idea that isn’t perceived as a threat by someone, and if that someone has the authority to stop the creative endeavor, they usually will.

One way of dealing with the filter and lag effects of hierarchy is to form a high-level team with the authority to quickly approve creative ideas. However, it’s been shown that forming such team alliances is made more difficult by having a multi-

layered hierarchy. Basically, the levels and divisions of a hierarchy are analogous to placing distance between people. The more functions or layers between two, the greater the distance between them.

There is another way of dealing with the problem: Eliminate the hierarchy.

When New Englanders beheld the amazing steamboats in the early 19th century, protesters claimed that steamboats would ruin the river sloops, the packet-lines and all New England’s sailing-ship industries. They would destroy the jobs of all the river workers, sailors, ships’ carpenters, rope-makers; they would wreck all of New England. The Connecticut Legislature voted to exclude steamboats from Connecticut’s waters.

But the Supreme Court declared the laws of the state legislature unconstitutional. Within 12 years, Americans covered the western waters with steamboats and launched the first steamer to cross an ocean. And the effects on the old industries were just as devastating as predicted. “The industrial revolution destroys,” author Rose Wilder Lane observed in The Discovery of Freedom (Fox & Wilkes, 1993). “It is a stream of living human energy as ruthless as nature itself, destroying to create and creating to destroy. It makes all forms of wealth as impermanent as life.”

One reason commonly given for forbidding change without permission is that the person with the idea lacks expertise. Although experts can often provide useful guidance, guidance is entirely different than permission. By all means, let the experts have a look at it, but don’t give the expert the power to destroy an idea by withholding approval. Remember, when it comes to someone else’s new idea, the expert is always on safer ground saying no than saying yes. Permission carries with it some risk of failure. Creative genius has always had to contend with the cynicism of experts. The experts either pooh-poohed the idea or predicted dire consequences should it be allowed (usually both). Consider the following statements and predictions made by experts:

“I think there is a world market for maybe five computers.”–Thomas Watson, IBM chairman, 1943

“This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”–Western Union internal memo, 1876.

“640K ought to be enough for anybody.”–Bill Gates, 1981.

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