The issue with the formula/process-based mindset that is prevalent in many traditional companies is that it places a high value on 'experience from seniors'...
In many cases, the seniors, while more experienced, are not all-knowing and it is simply impossible for them to come up with the best solution when they are not constantly on the ground. They tend to resort to a general list of tried-and-tested practices that often can be greatly improved upon (just ask the minions on the ground level for advice lol). The arrogance which comes with their position may also hamper their desire to explore shifts in different factions and lead the team to react accordingly..
In the few cases that experience is enough to ensure a high-performing team below, there is always the danger (and increasingly so) that this experience will become obsolete as new societal, industrial, technological advances arise.
So I would think, for a company to thrive in the idea economy, as flat a hierarchical structure as possible is best, and employees must be empowered. But if you are only a small or medium-sized business, how do you draw the line between empowerment and controlling potentially negative impacts of rash-decision-making or decisions made with the wrong motive or end goal in mind (i.e. empowered employees who abuse or play the system)?
I have been thinking about this, I think in a big part the reliance on tried-and-true formulas is about risk management. The assumption being that what worked before must work again right?
But in a rapidly changing world, if you don't check your basic assumptions of your formulas, you might face some nasty surprises.
The game has changed, what is perceived as low risk actually has a higher and higher risk of failure. And inversely things that seemed very risky before might pay off.
When talking about experience and seniority, I like the definition of experience as being the sum of the mistakes you made.
One assumes that a senior person in the company has made or seen most mistakes made and that makes him/her less likely to repeat it. So that seems like a person worth contracting because they represent a perceived lesser risk of screwing up (of course other factors play too)
In this day and age, with increased complexity, there are ever more ways of screwing up...
What is needed is constant experimentation, which is just as much about learning what doesn't work as finding out what does work. The point of the experiments is that you do it in a way that if it goes wrong, the losses are acceptable.
Companies that are too risk averse however don't allow this experimentation, hence the experience pool remains static.
By not experimenting they are massively increasing risk of screwing up something important because they haven't learned enough quickly enough.
This means that the biggest organisations which are the most rigid actually are the most vulnerable. The average time a company stays in the S&P500 for instance has gone down to 14 years, in company lifetimes that is a blink of an eye.