LinkedIn co-founder Reid Hoffman on why the best leaders “manage the chaos” and encourage “freewheeling experimentation”

LInkedIn and Microsoft

LinkedIn chief executive Jeff Weiner, Microsoft chief executive Satya Nadella and LinkedIn co-founder Reid Hoffman. Source: Supplied

Finding a balance between chaos and orderly management can be a challenge for companies looking to push the barriers of innovation.

LinkedIn co-founder Reid Hoffman tackles the push and pull of these seemingly contradictory forces in a recent episode of his Masters of Scale podcast, arguing that the best managers “manage the chaos”.

Discussing the topic with Eric Schmidt, executive chairman of Google parent company, Hoffman notes that ‘management’ and ‘chaos’ are not necessarily mutually exclusive.

“If you want an innovative company, your job is to manage the chaos,” he states.

“Managing chaos may sound like a contradiction in terms. Shouldn’t it be the opposite? Isn’t the manager’s job to wring order out of chaos? Not always.”

Hoffman argues that suppressing management is required “to invent something new, or reinvent something at a spectacular order of magnitude”.

“Let your employees pursue wild ideas that may raise your eyebrows,” he advises.

“It’s not for you to judge whether their ideas are good or bad. It’s for your employees to prove it through freewheeling experimentation.”

Better networks

Hoffman emphasises that ideas come not just from individuals but networks of people, noting the rarity of an idea springing into existence in perfect form.

Some people are more innovative than others. However, rather than being reliant on one or two people to generate ideas, it is “always better to have a number of people working on ideas simultaneously”, he says.

Active networks in turn provide support for the development of an idea and companies should guard against the development of a silo mentality.

“No one in your organisation has a monopoly on good ideas, particularly when you’ve hired thousands of smart creatives,” Hoffman observes.

Get in quick

During the podcast, Hoffman describes Schmidt as pushing “the anti-management philosophy to its outer limits”. Schmidt, in turn, notes the value of speedy decision making.

Schmidt acknowledges that mistakes will be made, however, the priority should be on being decisive at short notice.

“Most large corporations have too many lawyers, too many decision-makers, unclear owners, and things congeal — they occur very slowly,” he observes.

“But some of the greatest things happen very quickly.

“We made the decision to purchase YouTube in about 10 days — incredibly historic decision — because we were ready, people were focused, we had a board meeting, we wanted to get it done.

“So I always tell people, somebody is running your company. What are they doing? Why don’t they just make this decision? Even if it’s the wrong decision, a quick decision is better in almost every case.”

Empowering employees

Both the leaders agree that empowered employees can keep ideas momentum flowing with a business.

Hoffman notes that Schmidt had “granted employees the freedom not only to choose their projects, but openly defy their managers along the way”. Google instituted a rule that any employee could devote 20% of their working week to any project they wanted.

Schmidt notes that “many, many initiatives” have come out of 20% time ideas.

“Much of the mapping work, many of the search ideas, many of the advertising, many of now the AI work, have come from people working and practising in new areas,” he comments.

Hoffmann recommend leaders developing an understanding of how a staff network operates.

“You have to first recruit the right people who tend to swap ideas and tackle challenges together,” he comments. “To effectively manage the chaos, you have to hire people who thrive under chaotic circumstances.”

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