I often ask CEOs, “Who in your company is responsible for process innovation?” Nine times out of 10, the answer comes back, “It’s me” or “It’s our VP of _____ (fill in the blank with any combination of terms: Lean, Six Sigma, Quality, Engineering, Process Excellence).” But in my experience, the bottleneck that throttles innovation and excellence is almost always located at the top of the bottle. Even in today’s post cold-war world, most companies are still organized like the old Soviet Union: There’s a central hierarchy that is cleverly disguised as a perfectly sensible “review” process. An idea fights its way up through various levels of skepticism until someone near the top decides whether or not to invest in it. (For a cold-war era case study of this process, see Karen Wilhelm’s article about Chrysler’s “suggestion system” from the 1960s.)

During this multi-level review, an idea must pass rigorous financial hurdles by promising an almost certain chance of quickly creating a minimum amount of savings ($2,000 - $5,000 within a year with little risk is typical). The problem is, having a centralized review process with rigorous acceptance tests discourages both small and large, “game changing” ideas - a sure fire way of preventing any sustainable competitive advantage. (See Robinson and Schroeder’s accompanying article, “Big Results from Small Ideas” for their non-intuitive observations about this.)

An organization that is trained to look to the top for innovation is an organization where the vast majority of people have abdicated responsibility for improving their company, their job, and their professional life. When the power to implement ideas is narrowly held, organizational renewal inevitably falters.

The Soviet Union’s Politburo learned the hard way 15 years ago that centralized control doesn’t work. Unfortunately, most American companies still don’t get it.

The question is: Does yours?