There might be an infinite number of ways to design an organization, and many different models have been suggested ”from the basic pyramid to the matrix to the lattice to the flattened organization. Yet, the most significant distinction, and most telling for the organization's long- term success, is whether it is a rank-based or peer-based organization. So, a factory, a bank, a high-tech company, and a government institution might have very different designs and organizational charts , but if they follow the logic and practices of the rank-based myth of leadership, they will, regardless of design, share in the same culture. This rank-based culture leads to inevitable consequences that are easily identified in most organizations today:
Victim mentality ” employees feel they have no role in decision making
Entitlement ”employees feel that management or the company owes them
Cynicism and a lack of vision ”employees see no connection between their work and the larger strategic goals of the organization
Tradition valued more than innovation
Constant crisis management
Low trust between individuals and departments
Competitive "CYA" attitude between interdependent groups or departments
Inconsistent messages from management
One-way, top-down communication
Silo culture ”turf protection and turf wars
Failure to reward creativity
Difficulty managing priorities and projects
Bureaucratic rules and regulations that tend to stifle creativity and innovation
Technology failures ”systems and processes are broken and not repaired
Loss of customers, suppliers, vendors , and more
Loss of key people; brain drain
These consequences were all in evidence at the company where I was consulting ”resulting in decreased productivity and higher costs, which added up to lower profitability. Unfortunately, because many of this company's leaders believed in the myth of leadership, they were taking actions that just made the situation worse . The root problems and solutions were obvious to the rank-and-file employees I spoke with, but due to the rank-based thinking of senior management, no one was listening.
What I've discovered consulting with and training hundreds of employees with dozens of different organizations is a real desire on the part of the employees to make significant contributions. We all share in a desire to make contributions and be recognized for them. We all want a feeling of self-worth. Many organizations are structured to make this nearly impossible , resulting in consequences like those listed above.
Solutions to the problems addressed by senior management are often known by employees further down in rank. But because of the assumptions of the myth of leadership, including rank-based logic and rank-based practices, no effective avenue exists for feedback to go up the hierarchy. As mentioned earlier, genuine communication will only occur between peers. Leaders, by virtue of possessing a "superior" position, are prone to assume also that they possess superior wisdom and insight. This attitude, one produced by the myth of leadership, has dominated business and other organizations throughout history. Perhaps reviewing this history will be helpful in both recognizing rankbased thinking in our own organizations and replacing it with peerbased thinking.