Preface: This turned out a lot longer than I thought it would. Guess I just got carried away.

Earlier today I was reading some case studies about various business that have failed. The case studies basically showed that corporations fail because of ďcreative accountingĒ and management. Then I got to thinking, the general internal structure of most businesses is probably one of the main reasons most businesses fail. Itís usually setup in a hierarchal, top-down fashion, with everyone reporting to the CEO. I donít see this structure as really allowing for much integration of day-to-day activities. Power is usually in the hands of one person and one person alone; the CEO.

If there are any major problems at the worker level, the workers donít have the authority to make decisions on their own, even if they know how to fix the problem. They have to report to their supervisors, who in turn have to report to department managers, who in turn have to report to executives, who finally report to the CEO. Adding to this are the sometimes strict rules and regulations that the workers must follow. An example Iím reminded of is an airplane crash in 2001. I donít remember the exact details–watched it on the Discovery Channel a while back–but one plane from Russia was flying directly towards another cargo plane. The onboard instruments detected they were on a crash course and told the Russian plane to dive, while telling the cargo plane to increase altitude. Minutes later, a traffic controller recognized that the planes were on a crash course and told the Russian plane to increase altitude, which he thought would fix the problem. The problem is that rules and regulations stated that if there was a conflict between what the onboard instruments said and what a traffic controller said, pilots should listen to the traffic controller. So the Russian pilot did what he was trained to do. Needless to say, both planes collided, killing everyone onboard–including all the children on the Russian airline who were on their way to a vacation.

What corporations should do is get rid of this hierarchal structure, or at least make it leaner. Whatís even better is the main person in charge shouldnít be at the top of the business structure but rather in the center. The focus should be on creating good relationships among employees in which hierarchal rank and distinction didnít have such a prominent role. This would also open the lines of communication, including everyone in decision making. This would help the CEO and other executives receive a wide range of ideas pertaining to a particular issue. Who better to come up with new ideas and solutions to problems than the front-line workers?

Another advantage would be that the person in charge (CEO, founder, president or whoever) would be a the center of the organization rather than at the top, whereby emphasizing accessibility and creating a sense of equality. The sense of equality is very important in any corporation. Individuals are happier working for people they see as their equals. Now donít get me wrong, Iím not saying that everyone should be equal because there has to be someone who is in charge and running the show, otherwise there would be pure chaos. Imagine a McDonalds outlet that wasnít run by a manager. Those teeny bopper employees would run amok.

Also, if workers see their mangers working and helping out on the front-lines, they will be more productive workers. Just like in war, solders arenít going to follow a captain whoís shouting orders from behind a tree, safe from all the bullets. The captain has to be leading the platoon, showing that he is confident in his plans, his abilities, and the ability of his fellow soldiers.

Running a successful business is equivalent to leading your army into combat with the enemy. A good leader, whether a platoon leader or a manager, has to command the loyalty and respect of his/her subordinates. In order to do this, a leader has to demonstrate two things:

  1. A leader has to show they know more than the subordinates. As a leader, you must show that you possess knowledge that subordinates donít possess, and that you are trying to teach them. Iím not saying go walking around strutting your stuff and showing off. No one wants to work for a pompous jerk of a manager. There are more subtle ways of showing your knowledge.
  2. As a leader, you have to demonstrate a genuine concern for your subordinates. You have to make sure they know you see them as living, breathing human beings and respect them. Once subordinates realize you have a real genuine concern and respect for them, you can rest assured that they will follow you into the jaws of death.