In chaotic times, an executive's instinct may be to strive for greater efficiency by tightening control. But the truth is that relinquishing authority and giving employees considerable autonomy can boost innovation and success at knowledge firms, even during crises. Our research provides hard evidence that leaders who give in to the urge to clamp down can end up doing their companies a serious disservice. Although business thinkers have long proposed that companies can engage workers and stimulate innovation by abdicating control -- establishing nonhierarchical teams that focus on various issues and allowing those teams to make most of the company's decisions-- guidance on implementing such a policy is lacking. So is evidence of its consequences. Indeed, companies that actually practice abdication of control are rare. Two of them, however, compellingly demonstrate that if it's implemented properly, this counterintuitive idea can dramatically improve results.
