This post is an edited excerpt from When Millennials Take Over: Preparing for the Ridiculously Optimistic Future of Business, by Jamie Notter and Maddie Grant. The book identifies four principles that will guide successful businesses now and in the future: Digital, Clear, Fluid, and Fast. This excerpt is from the chapter on Fluid.
There has been a long-standing love/hate relationship in the business world with hierarchy. It has helped us scale and get things done, and it also reduces complexity for us by providing a set of rules about who gets to decide on things, but it frustrates us by making us less agile and bogging us down in bureaucratic details. And although many call out for “flattening” the hierarchy, what we really need is for our hierarchies to be more fluid and flexible. When you look at the threads that connect the companies that have unlocked the potential of a fluid hierarchy, you will see that two fundamental building blocks can enable such a system in your organization:
- understanding what drives success, and
- investing in soft skills.
Understanding what drives your success may sound like an issue of strategy rather than organizational culture or structure, but it’s important to remember that there are different levels to understanding what drives the success of your organization. At the basic strategic level, you must get clear on where your company is going to compete and how you will win with your particular set of products and services. QLI [a healthcare company that we profile in the book] provides rehabilitation services to people with brain and spinal cord injuries, so its high-level success drivers revolve around providing high-quality medical care to patients. In that sense, it doesn’t need to be fluid. QLI could hire the best-trained physical therapists, speech therapists, and so on and put them into a rigid, vertical hierarchy and still provide high-quality healthcare. But QLI has figured out that there is more to their story
At QLI, high-quality health care is a given, but from the very beginning QLI staff realized that they were not just dealing with patients that had healthcare issues; they were dealing with people whose lives had been shattered. Rebuilding a shattered life requires more than medical attention. It requires a deep knowledge of the patient as a person and integrating that person’s life and passions into the medical care. It is that kind of intimacy with the patient that requires a flatter hierarchy, where the people know more about all facets of the patient’s life are the ones who get to make the decisions, regardless of their title. When they do this, they get better results. QLI does not choose to be fluid because it is a cool new management technique. It chooses to be fluid because that makes it more successful.
Take Zappos as another example. At a high level, all it does is sell shoes and other apparel online, so its success could be driven by solid logistics, good relationships with manufacturers, and effective marketing. But early on, Zappos figured out that giving the customer a “wow” experience is actually at the heart of its success. Zappos realized that it needed to draw people in with not just good customer service, but customer service that would blow people away. The kind of customer service where customers hang up the phone, and literally say “wow” out loud.
Understanding success at that level has implications for the culture at Zappos, particularly around being flat and fluid. To provide a “wow” experience, it had to give more power to people at the lowest levels of the hierarchy, the call-center employees, because they were closest to the customer. Zappos call-center employees make their own decisions about whether or not to upgrade a customer’s account or give them free shipping. They are famous, in fact, for being able to stay on the phone as long as they want with customers. (The record is more than 11 hours with a single customer.) Note that, despite this inefficiency, Zappos managed to grow from $1 million in sales to $1 billion in sales in just eight years.
We could try to scare you into being fluid. We could make a compelling case, actually, that the Millennial generation is going to storm into the workplace over the next several years and demand it. But you won’t access fluid’s true power by being reactionary. You need to look more deeply at your organization and your business model to understand what drives success and clearly identify how being more fluid does or does not connect to that.