Empowerment is essential to innovation
Have you heard of Holacracy?
In 2018, I was the leader of a rapidly growing startup. We were still small but our revenue had increased 500% in the last year and we’d rapidly expanded our team.
Only two years earlier, the company had consisted of… well.. me and I was still used to making all the decisions.
At one of our weekly all-hands, my colleagues pointed out that I risked becoming the bottleneck. Slightly taken aback by the idea, I invited the team to organise and run a series of workshops on how I could empower them.
Holacracy
One of the more radical ideas that came out was holacracy. By replacing top-down control with a system of overlapping, self-managing teams, holacracy aims to abolish hierarchy. In a holacratic organisation, there’s no “boss”, so employees have the autonomy to make decisions. In theory, it leads to increased satisfaction and better adaptability.
Of course, the reality is that holacracy is often disempowering. With no one in charge, decisions end up being made not by the most senior person but the loudest. Or decisions aren’t made: which leads to stasis or chaos, which can be just as disempowering.
It turns out that perfect empowerment is disempowering.
Empowerment
But that doesn’t change the fact that empowerment is the secret sauce in the recipe for innovation.
The most senior people in an organisation are often the least connected to the end user. They are also often the busiest. They won’t see the customer pain points that the organisation is creating, and won’t have time to solve them.
But the people who do see those things will often feel it’s not their job to solve them, or not have the resources to do so.
Given that most senior folk recognise that the best ideas come from the front line (even if, when saying so, they’re often simultaneously focused on forcing through their own ideas), companies set up suggestion boxes (or digital equivalents) to try to harvest all these good ideas.
But the problem with this is that the person who’s identified the problem may not have a fully worked-up solution. They may not even be able to properly articulate the problem. They just know that it’s not quite right and, given the chance, would probably be able to follow their nose to make things better.
But when confronted by a wall of business cases, templates and the requirement to be able to articulate exactly what the idea is, they crumble.
Empowering isn’t expensive
When I was a graduate trainee, I spent a week doing customer service at Derby Station. Three train companies served Derby: Midland Mainline, Virgin Trains and Central Trains. The first two allowed the station staff to incur costs on their behalf (e.g. book taxis). But Central Trains required us to phone to get permission.
This was time-consuming, and always when delays were worst: exactly when we needed to be with customers, and Control needed to focus on the bigger problems. Instead, Control was tied up approving taxi requests
The great thing about this was that it was a natural experiment.
Central Trains’ hypothesis was presumably that staff would be wasteful if there was a lack of controls. But from everything I could see, my platform staff colleagues took exactly the same approach with all three companies. They were as protective of company money as the company itself.
Now I’m older, this doesn’t surprise me.
At various companies, I’ve led schemes to empower staff to spend company money in order to help customers. The challenge is never that they spend too much - it’s that they’re fearful they’ll “get it wrong” and they don’t spend it at all.
Moreover, the sign-off was pointless. Central Trains Control rarely said no. How could they? The information they had was from the station staff, so if the station staff said they needed a taxi, they needed a taxi.
So all this policy did was cause customer frustration and poor service.
Judgment doesn’t have to be Perfect
And, of course, the people who created the control were right: the station staff might get it wrong.
It was about judgment.
Judgment can be flawed.
The question isn’t whether the Midland Mainline / Virgin Trains empowerment was a perfect system, it was whether it was better than the alternative.
And having seen both in practice right next to each other, my conclusion is that it was.
“The Daily Mail test”
While organisations will often justify disempowering policies on the grounds of financial risk, it’s often reputational risk that’s actually driving the behaviour.
At least public sector organisations are explicit about this. Many subject everything to a mental “Daily Mail test”: how would this look written up in the Daily Mail? These organisations are disempowering by culture primarily because of the fear that something could end up embarrassing their political leaders.
As an example of the kind of thing that could happen, let’s use the DPD haiku.
Back in January 2024, DPD tried out a large-language model-powered chatbot. Unfortunately, its linguistic prowess was not equalled by its self-esteem. For example:
This was discovered via a customer tweet that went viral and was picked up by the BBC, Guardian, etc.
I can just imagine the shitstorm in DPD’s head office that day.
But - looking back with the benefit of hindsight - does it matter?
DPD’s still in business.
I don’t know how empowering or not DPD was as an employer in early 2024. But let’s imagine that they were empowering enough that someone could have a go with an AI-powered chatbot, despite the fact it could (and did) go wrong.
That obviously had consequences, in the form of negative press coverage. And that negative press coverage will have had a consequence in lost sales.
But as we can see, the lost sales can’t have been very much. And their reputation will be far, far more impacted by the quality of service experienced by their customers in the delivery of parcels.
But if their reaction to the haiku was to disempower their staff, they will have ensured that the quality of service will gradually get worse as local managers find themselves unable to get on with fixing problems.
A minor reputational problem (being on the front page of the BBC) will have been elevated above a major reputational problem (ongoing service delivery being suboptimal). It’s just that the major reputational problem (because it occurs every day) ceases to be visible.
It’s a bit like car crashes and plane crashes. More people die in car crashes but we’re more worried about plane crashes: precisely because they’re rare.
In our organisations, we are so fearful of reputational plane crashes that we allow daily reputational car crashes.
Fear of the Daily Mail is the biggest brake on innovation and customer experience excellence we’ve got
Take Action!
Entrepreneurial organisations are “biased for action”. What can you do?
If you’re a Leader
Review the day-to-day rules your people work under. Which ones exist only to protect against reputational “plane crashes”? Do they increase the risk of daily “car crashes”?
Replace suggestion boxes with permission: let frontline staff try things.
Give explicit backing for small spends to fix customer problems and make it clear that “getting it wrong” is acceptable if the intent is right.
Replicate the Derby station test. Experiment with removing the rules in one location side-by-side with existing controls. Which delivers better service? Does anything go wrong?
If you’re a Team Member
When you see a customer problem, don’t stop at reporting it, fix it. Even if you don’t have permission.
If you’re unsure about spending company money, ask “what would I do if it were my own?” and act accordingly.
Share stories of small wins from empowerment with colleagues - they build confidence that it’s safe to act.
Remember: judgment doesn’t have to be perfect. It just has to be better than the alternative of doing nothing.
