Friend and Foe: When to Cooperate, When to Compete, and How to Succeed at Both (9 page)

These differences were best expressed by two quotes uttered within three days of each other in the spring of 2010. In one, the sports columnist Bill Simmons referred to baseball as “an individual sport masquerading as a team sport.” In the other, President Barack Obama referred to basketball as “the quintessential team sport” on CBS's March Madness broadcast.

In other words, whenever individuals perform largely independent tasks, like baseball players, you can never have enough talent. But in interdependent settings like beehives, Wall Street research groups, and basketball courts, more talent can lead to lackluster performance.

The basketball, Wall Street, chicken, and testosterone data offer cases where hierarchy wins. The baseball data suggest that sometimes hierarchy doesn't really matter. But in some cases hierarchy can actually hurt, killing performance and people.

In studying when hierarchy helps versus when it hurts, we began to realize that the more
human
the task, the less useful hierarchy appeared to be. So what makes a task human?

Humans, more than any other species, have the capacity to learn from each other and produce insights that build off each other's knowledge. For us, the coordination required is often intellectual.

So when we say a task is human, we mean that it is cognitively complex. In these cases, the number of things that have to be attended to is so great that no one perspective can capture all of the necessary information. In complex tasks, from flying a plane to performing surgery to deciding whether a country should go to war, people need to process and integrate a vast amount of information while also imagining myriad possible future scenarios.

And the more complex the task, the more likely we are to make a mistake or miss something critical. The costs of hierarchy can exceed its benefits in tasks like these—tasks that go beyond instinct and physical coordination, and instead require intellectual integration. Why? Because to make the best complex decisions, we need to tap ideas from all rungs of the hierarchical ladder and learn from everyone who has relevant knowledge to share.

Often, the best insights come from the least powerful. But as we have seen with Father Pfleger and General McChrystal, strong hierarchies silence voices that upset the chain of command. When we need insights from disparate members of a group, hierarchy can be a barrier to success.

Steve Jobs understood the tension between voice and hierarchy. In 2010, he declared, “You have to be run by ideas, not hierarchy. The best ideas have to win.” In the companies he ran, Jobs tried to reduce hierarchy structurally. While at Pixar, he designed its headquarters to promote encounters across the rungs of the company; the front doors, stairs, corridors, all led to a central atrium that also contained the café and mailboxes. Contrast this with General Motors' headquarters, the Renaissance Center, in which executives had a separate elevator that also connected to their own private parking garage.

No firm appreciates the importance of empowering everyone at all levels of the organization to speak up better than IDEO, a top design firm in Silicon Valley. IDEO is considered to be one of the most innovative companies in the world, and they have won more
Business Week
/International Design Excellence Awards than any other firm.

IDEO wants ideas and lots of them. To produce groundbreaking innovation, IDEO limits the role of hierarchy in their brainstorming sessions. Founder Dave Kelley even went so far as to declare, “At IDEO, there is no corporate hierarchy and no management structure.” Despite wide ranges in rank and pay, the title on every business card simply reads “Engineer.” In their brainstorming meetings, there are no titles, only ideas.

IDEO's culture promotes something that Anita Woolley of Carnegie Mellon University identified as critical for a team's ability to be collectively intelligent: equal opportunities for sharing ideas. Woolley's research found that groups make more intelligent decisions when members participate equally in the conversation. Intelligent groups, in other words, benefit from the diversity of opinions of their members, whereas less intelligent groups are weighed down by a few individuals who dominate the conversation. When speaking time is concentrated in a few, a team becomes less intelligent.

There is a lot to be learned from cases in which hierarchy has silenced individual voices. Take the financial crisis of 2008. As we now know, the housing bubble that led to the economic meltdown in 2008 was fueled in part by a financial innovation called credit default swaps, financial instruments that function a lot like insurance. Investors could insure themselves against the risk of default by paying an annual premium that would protect them against the failure of their investment.

One company that offered this financial insurance was American International Group (AIG). AIG made unbelievable amounts of money insuring mortgage-based securities—as long as housing prices went up, they would get their premium checks and have to pay no claims. But as AIG was making a huge profit, storm clouds loomed on the horizon.

Unfortunately, the head of their Financial Products division was Joe Cassano, a man who suppressed the voices of employees who spoke out about the looming crisis. Cassano would express rage and bully people into submission when they presented information that challenged his position. He was especially critical of anyone who suggested that AIG's strategy of providing credit default swaps was no longer sound. Because he had so successfully suppressed alternative voices, Cassano's team was overexposed and completely unprepared for the financial crisis of 2008. As mortgage-based securities fell into default, AIG was responsible for honoring their insurance claims. Ultimately, the federal government had to bail out AIG, lest the entire financial market collapse, to the tune of
$182.3
billion.

And it wasn't just Cassano at AIG who suppressed concerns about the housing bubble. As chairman of the U.S. Federal Reserve from 1987 to 2006, Alan Greenspan was devoted to low interest rates and limited regulation, and was convinced that there was no housing bubble. He was also devoted to letting his colleagues know exactly where he stood on policy recommendations. When he met with bank presidents, Greenspan would open with an in-depth soliloquy about his own views. Greenspan would then open up the floor for comments, but few dared to challenge this economic savant. In contrast, his effective successor, Ben Bernanke, chose to offer his perspective
last
, after all other members of the committee had had a chance to speak first.

President John F. Kennedy learned the hard way to appreciate the importance of ensuring hierarchy didn't prevent the sharing of ideas. At first, he got it wrong with the disastrous invasion at the Bay of Pigs. Early in his presidency, Kennedy approved a CIA-orchestrated plan to overthrow the Cuban leader Fidel Castro. It involved training Cuban exiles to invade Cuba, with the aid of U.S. forces. On April 17, 1961, Cuban exiles landed at the Bay of Pigs, but after just two days of fighting, their forces were decimated; all 1,300 were either killed or captured. As a result, President Kennedy, only months in office, found his reputation severely compromised—the bungled affair made him seem young and inexperienced.

A major reason why the plan failed so spectacularly was a strong hierarchy that suppressed diverse perspectives. In deciding whether or not to launch the invasion, President Kennedy was present at all critical meetings and expressed a clear preference at the outset. That doesn't sound so bad on the surface, but his presence and strongly worded preferences served as subtle barriers that prevented others from expressing their own. Even his top aides held their tongues: Both the secretary of state and the deputy director of the CIA did not reveal their concerns to the president. Kennedy's advisors
felt certain that
the plan would fail, but no one spoke up.

A mere 18 months later, a more experienced Kennedy prevented nuclear apocalypse by changing the group dynamics that had crippled his planning for the Bay of Pigs invasion. The Cuban missile crisis was a high-stakes, fast-moving international drama—the epitome of complex, dynamic decision-making. As history buffs will recall, his first idea was to bomb the nuclear installations before they became operational. Yet, had the United States done so, the Soviets may well have countered with bombings of their own, possibly leading to a third world war, and a full-scale nuclear one at that.

Luckily, this time, Kennedy loosened the hierarchy reins, deliberately making himself absent from preliminary meetings and refraining from revealing any initial preferences. In describing the meetings held during the crisis, Robert Kennedy said: “We all spoke as equals. There was no rank, and, in fact, we did not even have a chairman.” Lower-level officials with relevant knowledge and expertise were given the floor and there was periodic involvement of outside experts and fresh voices.

By reducing hierarchy, novel solutions emerged. The president eventually decided against air strikes and instead set up a blockade that prevented offensive weapons from being delivered to Cuba. The United States and the Soviets eventually reached an agreement—the Soviets would remove any missiles from Cuba and the United States would promise to never invade Cuba. Nuclear war was averted.

We can learn similar lessons about hierarchy from mountain climbers who have attempted to summit Mount Everest.

Everyone knows that climbing Mount Everest can be deadly. More than 200 people have died attempting to summit its peak, which sits at 29,029 feet (8,848 meters) above sea level. In fact, part of the mountain is even called the “Death Zone.” But what many people don't realize is that high-altitude climbs are dangerous not only because they are so physically challenging, but because they also require a great deal of complex and dynamic decision-making. In order to be successful and avoid fatal errors, leaders and expedition members need to communicate frequently and coordinate not only physically but also intellectually. As a group, climbers need to assess the physical condition of each climber, monitor supplies, and navigate extreme and dynamic weather patterns. In other words, mountain climbing is the kind of activity that can suffer from hierarchy.

In May of 2006, when a storm hit during their descent, and two teams, one from the United States and one from New Zealand, lost five of their members, including the leader of each team, one factor that contributed to the fatalities was hierarchy. As one climber noted, “there was not…a sense of individual responsibility, rather, clients were encouraged to see the leader and guides as saviors.” The members relied too heavily on the leaders, never questioning their plan or contributing their own vantage point. Tragedy resulted.

Or consider the disaster that struck a ferry in South Korea in April of 2014. Things began to go wrong when the ferry began to list after making a sharp turn in the face of a strong current. All told, 302 people perished on the boat, and 250 of them were high school students. Many of these individuals could have been saved. Instead, as the ship began to sink they obediently followed orders from the crew to stay put…until it was too late. “A real tragedy of the disaster was that those students who followed the instructions died,” said Bark Soon-il, head of the Korea Social Policy Institute. In cultures that emphasize obedience to authority—like South Korea—hierarchy can be particularly deadly.

We conducted a study to test whether hierarchical cultural values would predict fatalities in a high-stakes situation. Along with Eric Anicich of Columbia University, we analyzed over 30,000 Himalayan mountain climbers from 56 countries on over 5,000 expeditions. We found that members of expeditions hailing from more hierarchical countries were more likely to die in the Himalayas. Why? Because in countries and cultures that are hierarchical, decision-making tends to be a top-down process. People from these countries are more likely to die on difficult mountain climbs because they are less likely to speak up and less likely to alert leaders to changing conditions and impending problems. By not speaking up, these climbers preserved order but endangered their own lives. Importantly, we isolated the role of
group
processes by showing that the higher fatality rate occurred for group, but not solo, expeditions. It was only when a group of individuals had to communicate effectively that hierarchical cultures produced disaster.

The Himalayan context highlights a key feature that creates complex decisions: a dynamic and changing environment. When the environment can change dramatically and suddenly, people have to adapt and come up with a new plan. In these cases, we need everyone's perspective brought to bear and hierarchy can hurt by suppressing these insights.

Even the military appreciates that in fast-paced situations that involve significant consequences, hierarchy must be minimized to prevent disaster. Consider the now famous, cover-of-darkness helicopter ride on May 1, 2011. Two helicopters carrying 23 members of SEAL Team Six flew into Pakistan with the mission to capture or kill Osama bin Laden, the mastermind behind the 9/11 terror attacks. This was an incredibly risky mission, and disaster nearly struck when one of the helicopters crashed as they approached the bin Laden compound. This elite team had to improvise in that moment: They needed to complete the mission, they needed to limit the amount of classified information they left behind in the downed helicopter, and they needed to get out alive.

The combination of complexity and unpredictability made the bin Laden raid a quintessentially human task. Because they had to make fast-paced decisions on the ground, they were empowered to act. Speed and adaptation, flexibility and improvisation—not top-down leadership—are what characterize SEAL Team Six.

For much of our discussion on hierarchy, we have described how the military is the epitome of a strong hierarchy because hierarchy helps it solve the problem of massive physical coordination. But SEAL Team Six, and the Special Forces in general, stand out for their
lack
of hierarchy. Because there are no privates or corporals, the hierarchy in Special Forces is, by definition, flatter than it is in other areas of the military. The Special Forces represent “a leadership organization, where you invite participatory involvement in decision-making; where people at every level, from the sides and the bottom, have a voice and a view, and are permitted and encouraged to provide feedback.”

The key lesson is that for human tasks that require knowledge to be shared and integrated in fast-paced, dynamic environments, hierarchy can contribute to catastrophic failure. In these environments, anyone in the team, even the lowest-ranked member, may have the critical insight that tips the balance.