How Corporate Caste Systems Kill Innovation and What Leaders Can Do About it

In way too many organizations employees are given the not so subtle message that they should know their place. For all the talk and money spent on innovation and employee engagement, too many employees learn early and often that bucking the system or thinking a little too different can be career limiting. Expected to learn our roles quickly and not venture too far into someone else’s turf feeds an environment that kills the very factors that create innovation and engagement.

Illustration by John Grimes

Take for example the language we still use. While some of the messages about our status are subtle, many are often explicit and unambiguous. Try eating in the executive dining room if you don’t rate. Have we ever figured out why many promotions necessitate a slightly larger office, fancier desk, exclusive perks and may even ‘real art’? And just listen to what we call one another: direct report, hourly employee, bargaining unit, human capital, executives, full time employees (FTE’s) part time employees (FTE’s). These words still reflect a traditional command and control structure that demonstrates the differential treatment of different classes of employees. Such labels reflect a mindset where order and obedience in the hierarchy go unchallenged. Yet, we have known for decades that breakthrough innovation, products and services that often change entire marketplaces, almost always come from a team or an individual outside of the inside group. All too often, these individuals leave the corporate caste system for other cultures that appreciate and understand the importance of everyone’s contribution. Ultimately the responsibility for abolishing the corporate cast system comes down to the leader. Here are 7 ways to begin its destruction:

1. Structure Drives Behavior: Downsizing and flattening organizational hierarchies won’t work if you don’t change the structures (and often times the people) that created the problems in the first place. How are information, ideas, and complaints, filtered before it gets to you? Why? What can you do about it?

2. Change the message and be dramatic: Make everyone aware that innovation and good ideas are expected to come from every level in the organization. Reward contribution and ideas from all levels. What steps can you take as a leader that broadcasts people should not know their place?

3. Learn to love weird: Every week seek out the counsel of someone who thinks different from you. Encourage everyone on your team to do the same. Different thinking and weird ideas have led to every major innovation in history. You have to build the culture to value diverse thinking.

4. Make professional development of employees’ job 1 in the role of every manager: Setting goals, making numbers, launching products and meeting deliverables are imperative to success. However, making sure the pipeline is filled with talent is insurance for innovation. Be strategically unreasonable and demand that every manager develop, encourage, mentor and sponsor those they lead.

5. Get outside in the real world: In the television series ‘Undercover Boss’ where the CEO goes disguised inside the belly of the company always leads to surprises.  While going undercover might be over the top, devise ways to get out and with employees and customers at least monthly and do it alone—not with a traveling band of managers. Experience firsthand what employees and customers live with every day.

6. Be diverse from the board room to the mail room: Diversity matters for many reasons but for innovation diversity is an imperative. Research shows that diversity in the Board room, in senior executive roles not only makes for better ideas but leads to nearly a 32% increase in profitability. The bottom line is that diversity pays in profit margins, in morale, in innovation. Take steps today to make diversity work in your organization.

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