The problem with corporate leadership successions

Leadership successions in large companies are similar to those in autocracies. That's nuts.

Leadership successions in large companies--with their series of carefully-staged management reshuffles and "horse races" between contenders for the top job--are remarkably similar to those you regularly see in autocratic regimes.  Today's Wall Street Journal article about this dynamic playing out at Morgan Stanley provides the perfect encapsulation (note-may be paywalled):

It's a "four-way race to one day succeed Chief Executive James Gorman," writes the author of the piece, Peter Rudegeair.  I imagine these four execs will henceforth be referred to as members of the "leadership team." But how much of a "team member" can you be if you're competing with your peers in a zero-sum game?  

In the bureaucratic model prevalent in most large organizations, megawatts of emotional energy get wasted on petty battles, data gets weaponized against adversaries, collegiality gets shredded by promotion tournaments, and decisions get corrupted by artfully concealed self-interest.

There are alternatives to this model--ones in which formal hierarchy (positional authority, defined top-down) is replaced with multiple natural, dynamic hierarchies (built bottom up, and with authority ebbing and flowing based on value-added).

As we write in our book's chapter on the principle of Meritocacy, there are a number of successful organizations that have embraced the idea of natural,  dynamic hierarchies.  These include Haier, WL Gore, Moning Star, and Bridgewater Associates.  Yes, they still have a formal hierarchy--but it's significantly smaller, flatter and less influential.  In these organizations, people spend less time competing for scarce promotional opportunities, and instead compete (and collaborate) to add value for the customer and other stakeholders. Influence and compensation is far less correlated with your title, and more with you contribition.  

If you want to emulate these organizations, and reduce the politicking and infighting that distract people from maximizing their contribution, you need to move away from a pyramid of positional power.