As we move further into the new millennium, we are more aware than ever that innovation is key in staying competitive and profitable. Many companies are tempted to experiment with innovations in company culture and management structure as a means of gaining a competitive edge.
Be clear, there is a big distinction between company culture and management structure innovations. Some of the most successful companies have developed significant competitive advantage by developing unique and nurturing company cultures. I saw this first hand with Kinko’s under the innovative leadership of Paul Orfalea. During Orfalea’s tenure, Kinko’s was considered one if the most desirable companies in the world to work for.
Company culture innovations factor into some of the most productive business environments currently in existence. Companies such as Apple and Google are hotly desired by college graduates because of culture and environment.
But again, let’s not confuse culture with management. Although cultural innovations are wonderful, there is one best management philosophy that consistently rules the day. That philosophy is “benevolent dictatorship.” A benevolent dictator will establish an environment of open communication and creative thought. However, final decisions are made by the person of ultimate responsibility – be it the CEO or the branch manager.
Why should management be a dictatorship? The reason is because operating in a competitive business environment is like waging a war. What is the first thing that happens when a country is involved in a war, such as when Great Britain entered WWII? Most civil liberties are suspended and martial law is declared. You only need to look at the inefficiency of the US Congress today to understand that if democracy ruled company environments, decision making would be exceedingly slow, political, and mediocre.
If you want to be innovative with your company, culture is a great place to do it. But if you’re interested in management structure experiments, it’s best to leave it to academia or to watching bleeding-edge companies from the sidelines.
In the next blog, I will tell you about my personal experience in witnessing an alternative management style, and how it went awry.