I recently took part in a planning session at work. The team had been debating competing approaches for nearly twenty minutes when a member of our executive team expressed his preferred tactic. Discussion ended instantly. The team aligned itself with the executive as if his opinion meant more than any other – and outweighed all others combined.

I work for a large global high tech company, but this dynamic – where subordinates reflexively defer to the judgement of managers – is the norm at American organizations of all sizes and across all industries.

Despite the common misconception, smaller organizations aren’t more progressive or agile than larger ones just because they have fewer layers of bureacracy. In fact, they are often more hierarchical than their larger competitors. Whether your organization has 100,000 employees or 10, there’s a 100% chance that your organization is essentially autocratic and feudal.

Between American political correctness and a US culture that encourages acquiescence to superiors, it is hard for people to openly contradict colleagues, scrutinize managers, and give equal weight to opinions expressed by those at the lowest level of authority. This dynamic leads to avoidable missteps, missed opportunities, stifles debate, discourages innovation, limits options considered, and inhibits the ability of an organization to make vital course corrections rapidly.

A strong hierarchy benefits an organization in the short-term, but most research suggests that long-term success depends on decentralized decision-making. 

As Americans, we are proud to live in a country where everyone – irrespective of socio-economic standing – is equal under the law and where the majority rules. But we abdicate these principles and rights the moment we enter the workplace.

To achieve the level of business agility, operational excellence and long-term competitiveness that ambitious organizations seek, personnel at all levels of the organization need to have an equal voice in decision-making.

Given our culture, it may seem like a waste of time and a little bit dangerous to give a new employee with 1 year of professional experience the opportunity to critique and re-shape a CEO’s 5-year plan, but this is the kind of dramatic change in corporate culture that is required to achieve business agility and be competitive in the 21st century.

I am not calling for a corporate Tea Party, promoting mob rule, suggesting we elect CEO’s by popular vote, or believe we should abandon modern corporate organizational structures that have served us well for decades.

But a new approach is needed. For over a decade, there have been efforts to transform traditional organizations – that are based on 19th century thinking and 20th century management systems – into learning organizations and high performance cultures. Despite the substantial amount of resources invested and executive sponsorship, progress has been limited to incremental improvements in niche areas like decision-making, accountability, innovation, or leadership development.

Leading experts have been unable to fully realize and implement their vision of high performance. To a large extent, this is because they lack a real world example of a large organization that epitomizes the characteristics of a learning organization and a mature high performance culture.

As a result, corporations, government agencies, and the military are left without clear guidance on best practice approaches or a proven method for transforming organizations into high performance cultures.

One organization does epitomize the character traits and organizational behaviors of a learning organization and mature high performance culture, but it isn’t a corporation and it isn’t based in the US. It is a well-known foreign organization that has successfully employed this model for over 60 years – the Israel Defense Forces (IDF).

Although counter-intuitive, the IDF is more agile and less formal than a Silicon Valley start-up. A private and a general are on a first-name basis. The IDF systematically and continuously empowers a private to impact the organization’s strategy and tactics. And as is well-known, the IDF has demonstrated an uncanny ability to consistently adapt quickly, learn from mistakes, and defeat emerging threats.

The IDF has a traditional hierarchical structure – that is responsible for creating strategy, setting priorities, managing processes, ensuring unity of effort, running operations, and overseeing growth. At the same time, the IDF has a parallel bottom-to-top framework that has equal influence over all decision-making.

Generals can’t adopt new strategies without the endorsement of the privates who will be implementing those policies in the field. Privates and Sergeants are also duty-bound to critique the strategies and tactics that are championed by their superiors. Most briefing sessions – where senior leaders explain their plan to subordinates –lead to changes in strategy, tactics, and even force structure due to questions and suggestions by soldiers of the lowest rank. Privates, who are on a first name basis with Generals, are trained to think critically and encouraged to constantly scrutinize their leaders.

The relatively seamless integration between these two decision-making frameworks – one that is top-to-bottom and the other which is bottom-to-top – enables the IDF to rapidly adjust to changes in the competitive environment. This capability also enables the IDF to replicate success across the entire organization and nearly eliminate risk of repeating past failures.

A culture that encourages decision-making through consensus, as opposed to an organization chart, creates additional challenges for leaders, but it also requires subordinates to perform at a much higher level than would otherwise be expected. 

Within the IDF and the Israeli public, there is widespread recognition that the bottom-to-top framework is the locus of all innovation, the key to quality decision-making, and the engine for ensuring continuous competitive advantage over the IDF’s opponents. This recognition makes it easy for senior leaders to trust subordinates and respect them as equals.

As compared to any other large organization, the IDF benefits from an unrivalled level of trust between the senior leadership and the lowest ranking members of the organization. This is the result of another cultural trait that is unique to the IDF – public accountability of failures, mistakes, and misjudgments.

In most organizations, individuals at all levels within a hierarchy fear public exposure of mistakes because they assume that missteps will reflect poorly on their judgment and will potentially place their professional growth at risk. The IDF emphasizes the criticality of public accountability and has created a system that encourages new recruits, young officers, and generals to clearly identify errors and discuss lessons learned. This system dramatically improves the relationship between leaders and subordinates while helping to ensure that an organization doesn’t replicate past mistakes.

The IDF, which operates on a scale that is comparable to the world's largest corporations, is not perfect – no organization is – but it has achieved success and leadership in a field that requires constant adaption. Its unique culture empowers soldiers to think critically and take command – as opposed to just following orders.

For organizations that are attempting to transform themselves into a learning organization with a high performance culture or are focusing on leadership development, the IDF provides insights that extend well-beyond standard research on these topics.

In addition, the existence of a real-world example may enable leading practitioners in this field to move beyond the relatively narrow scope of current efforts and finally achieve the fundamental changes they have sought for over a decade.  

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The Coming Tsunami of Employee Attrition and How to Avoid It

Given the breadth and depth of the ongoing economic crisis, it makes sense that everyone – from business leaders to entry-level employees – has been focused on corporate and personal survival.

Even the current hope that the economy will soon stabilize has not reigned in the frenzy since businesses are attempting to bridge financial gaps and take out competitors.  

But despite the relentless focus on short-term financial health, many leading corporations are starting to transition from crisis management to future planning. For these companies, employee retention is a top priority since the war for talent will sharply escalate once the recovery begins.

In the past, organizations could preserve and grow market share by focusing primarily on top performers, especially those directly responsible for revenue generation. When a member of the bottom ninety percent left, it was often seen as an opportunity to acquire fresh talent that would bring new enthusiasm and ideas to the organization.

Focusing on top performers still makes sense, but organizations that retain the largest percent of their current employees will gain the greatest competitive advantage. Since most employees are already working at or beyond capacity, the loss of any team member – whether considered a high performer or not – will impact an organization’s ability to meet planned objectives, deliver quality service, innovate, and grow.

A tsunami of employee indifference to corporate well-being and a wave of attrition are fast approaching.  Many high performers are already investigating new opportunities and the vast majority of the workforce, which has been fearful of job loss for nearly a year, has been actively job-seeking as a hedge against a potential layoff.

Organizations that are able to increase employee motivation and prevent extensive workforce attrition over the next six months will thrive as soon as the recovery materializes and strengthen their position in the market. Those that aren’t proactive today will find that they have survived the economic crisis, but lack the personnel and the spirit needed to turn red ink black.

Traditional retention methods will be far less effective than usual since employees will find equivalent financial incentives elsewhere as well as the promise of a better work-life balance, more job security, rapid professional advancement, and a fresh start.

Decisions to stay or go will be based primarily on how individuals feel about their organization, colleagues, and management performance during the economic crisis. Organizations at the greatest risk for widespread attrition experienced infighting for scarce resources and relied heavily on employee willingness to shoulder larger workloads to weather the economic storm.

To ensure short-term competitive strength and market share growth, management and Human Resources need to develop a more comprehensive strategy for employee retention that extends beyond the traditional promise to increase compensation and accelerate advancement. 

An experience I had twenty years ago, as a new recruit with the Israel Defense Forces, still informs my approach to motivating the teams I manage. My unit was conducting patrols and ambushes against terrorists trying to enter Israel through the Jordanian border. The intensity of these operations made basic training seem tame by comparison. Within a week, the team was rife with tension due to lack of sleep, stress, and the perception that not everyone was contributing equally. Dissension and resentment was also directed at our leadership for placing demands on us that most considered unreasonable. 

Like any good leader, our commander recognized that his team was in trouble and responded quickly. He did something that seems especially unusual for a military organization, but is also rare at most corporations. He didn’t just facilitate a conversation on core issues; he candidly admitted his error in judgment, validated grievances, and increased his workload to reduce ours. He also gave his subordinates near-equal influence over the development of a new approach that enabled us to achieve all objectives in a way that met team concerns.

Even though the actual workload only decreased slightly, the level of dedication, trust, and collaboration increased dramatically. From that day forward our unit outperformed all other teams, and set a new standard for excellence.

A unit similar to ours was sent to Nablus. They experienced the same type of stress we did, but their leadership merely pushed them to meet near-term goals. When they left Nablus, they were divided into cliques and consistently under-achieved. Their best people transferred to other units.

For me, the lesson learned is that when subordinates play a critical role in decision-making and when management leads by personal example, team bonds become unbreakable. Individual and team performance also improves exponentially because individuals are self-motivated to achieve excellence and collaborate unselfishly with colleagues.

To substantially reduce attrition rates and create high performing teams, HR leaders should develop and execute a comprehensive assessment of corporate morale in a way that identifies the extent to which employees at all levels of responsibility are satisfied with their organization, managers, peers, and level of input into decision-making. An analysis of the data will help corporate leaders devise an effective method for retaining current employees, recruiting new talent, and benchmark the extent to which they have created a high performance culture.

The tsunami is coming, but organizations can still build a bulwark against it, and gain competitive advantage, by making corporate bonds so strong that critical teams won’t break.

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