Examples of limited freedom included micromanagement and excessive approval processes for employees; complexity and rigidity of client contracts; inflexible requirements for vendors; and little transparency with community members, among other things.
What she found was that “high-freedom” companies outperformed “low-freedom” companies financially, creatively, and in long-term success. And, not just slightly outperformed. High-freedom companies were over 10 times more likely to be financially successful and 20 times more likely to innovate and be successful long-term.
Strikingly, only 21 percent of companies studied met the high-freedom criteria, and over 50 percent were indexed as low-freedom. Highly controlled relationships in any of the four groups mentioned above influenced profitability, often with poor relationships in one area preventing healthy relationships in another. In other words, half these companies’ relationships are stunted because they are used to control employees, suppliers, vendors and community members rather than giving them the space to innovate. By controlling the relationship, companies are not utilizing major assets, “the character and creativity of employees, the values and aspirations of customers, and the innovation and flexibility of supply chain partners,” as the report puts it. And as such their financial success is not nearly what it could be.
The Takeaway: —from employees to suppliers—is not just an exercise in HR management or public image. It is critical to reaching maximum success.
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