Hierarchy is a huge impediment to collaboration. In organizational cultures that emphasize hierarchy, people feel compelled to go through channels. This prevents front-line people from contributing to decisions and also discourages leaders from getting real-time, unfiltered information from the field. Smart organizations encourage collaboration across levels, functions, business units and regions.

I was glad to read in yesterday’s Wall Street Journal that SK Telecom of Korea has taken fundamental steps to reduce the role of hierarchy. Evan Ramstad writes in his "Managing" column headlined “Pulling Rank Gets Harder At One Korean Company” that SK Telecom has replaced the five ranks that employees used to address each other with one rank, manager. You can read the article here (reg. required).

I live in California, where people in business typically call each other by their first names. For somebody to call his or her boss “Director Jones” would seem absurd. But even in Silicon Valley companies with supposedly reduced hierarchies and relaxed environments, trappings of position exist such as triple-sized cubicles. In other regions, hierarchy is more pronounced. People address senior leaders as “Mr. or “Ms.” and they talk of vice presidents in hushed tones as if they might get in trouble for even uttering the names of big shots.

As growth has slowed, SK Telecom has begun encouraging more debate and input from all levels. The idea is to spark more creativity and risk-taking, which are certainly important to collaborating. South Korea’s business culture has traditionally concentrated decision-making with senior executives “to protect their power” as Ramstad notes. Clearly, SK Telecom has realized that, in Bob Dylan’s words, the times they are a-changin’ and that a hierarchical culture was costing the company money.

Other companies should take notice that reducing the role of hierarchy and instilling the culture of collaboration is in vogue—and will create value.