The true nature of organizations where "information doesn't come up" - what delegation of authority and casual conversation taught us.
"For some reason, the most important information always seems to reach me the slowest." I encounter this problem surprisingly frequently when talking to executives and department heads. Someone on the ground must have noticed something was wrong, but it never seems to make the cut. Yet, trivial reports are dutifully brought up the table. I myself have encountered this wall many times while managing our Philippine subsidiary and delegating authority within the company. Today, I'd like to consider the true nature of "organizations where information doesn't come up" from a more multifaceted perspective, based on my own experiences.
Why is it that bad news takes so long to reach the CEO?
Many managers tend to think, "If information isn't coming up, it's because my subordinates are neglecting to report it." But I think this view itself isn't very accurate. Information usually doesn't come up because there are people who "don't speak up," but because the "standards for when to speak up" and the "atmosphere where it's okay to speak up" haven't been established.
This becomes a more serious problem for smaller organizations. The 2025 White Paper on Small and Medium Enterprises published by the Small and Medium Enterprise Agency indicates that companies that share their management philosophy, vision, and management information with their employees are more likely to contribute to fostering employee initiative, improving performance, and retaining talent.
Furthermore, companies with sales of less than 1 billion yen have a higher rate of efforts to eliminate dual roles and delegate authority to managers compared to other company sizes, highlighting how to relinquish job responsibilities that tend to be concentrated in the hands of managers as a common management challenge. In other words, information bottlenecks are not unique to any particular company, but rather a hurdle that almost all growing companies go through without exception.
A common example cited to illustrate how "the greater the power, the harder it is for information from the field to reach the pilots" is the data showing that while aircraft cockpits are designed for the captain and co-pilot to compensate for each other's mistakes, accident rates are higher when the pilot is an experienced one. It seems that even if a co-pilot notices something is wrong, they are hesitant to point it out to the experienced and authoritative captain.
Power and the visibility of information are often in a trade-off relationship. The author argues that this dynamic applies directly to "projects directly under the CEO" in Japanese companies. The more power and political influence a leader has, the more difficult it becomes for dissenting voices from the field to be heard.
One concept that explains this background is the "Power Gap Indicator (PDI)." This index shows how much people in weaker positions of authority within an organization accept unequal hierarchical relationships as normal, and Japan is said to have a higher score than the global average. This is said to be due to a national character in which people are less likely to contradict or dissent their superiors, and therefore, relying solely on rules like "report if you feel in danger" or the assumption of good intentions will prevent information that should be heard from reaching those in higher positions.
For me, "delegation of authority" and "information gaps" were two sides of the same coin.
This story is not something I can ignore. I once entrusted the management of the company's finances to the president. I thought to myself, "Now I've finally achieved true delegation of authority." However, after some time had passed, I realized that some of the figures were becoming less visible to me.
To be honest, I was a little anxious at first. I began to doubt myself, wondering if my intention to "delegate" had unknowingly turned into "neglect," where I was ignoring information that was inconvenient for me. At the same time, the thought crossed my mind that I was simply running away from confronting the details of the numbers.
Ultimately, we addressed the issue by bringing in an external financial consultant to visualize and organize the figures. What I learned from this experience is that delegation of authority itself isn't bad; rather, unless you simultaneously design a system for how the information delegated to the recipient returns to the person who delegated it, delegation of authority can easily create information gaps. If left unchecked, delegation and the loss of visibility can easily become synonymous.
Those who "go and get" information and those who "wait" for it — no need for sheep.
One phrase I often use in the office is "We don't need sheep." Sheep refer to people who don't act unless told, and who don't proactively seek out information. Being spontaneous and being proactive may seem similar, but they are completely different. Being spontaneous is an attitude of "waiting for instructions and going to listen for the next instructions," while being proactive is an attitude of "leaning forward and proactively making suggestions."
Whether or not all members of an organization understand this difference makes a huge difference in the speed at which information flows.
Organizational bottlenecks are often not caused by low-performing individuals, but rather by a group of people who have a passive attitude towards information. That's why, in my experience, it's more effective to establish a shared understanding within the organization that "information is something you go out and get, not something you wait for," rather than focusing on setting up information-sharing systems and tools.
Casual conversation is not "useless," but rather an informal information channel within an organization.
Here, I'd like to add another important perspective. To create a culture where people "go out and seek out" information, simply establishing official reporting routes is not enough. Rather, we need "unofficial channels" that pick up on small inconsistencies and ideas that would never be picked up through official channels. The prime example of this is what we call casual conversation.
Management consultant Shu Yamaguchi presents data from an assessment of executive candidates at leading Japanese companies, showing that approximately half of the leaders were either "command-and-control" or "proactive," styles that relied heavily on meetings and written documentation. Conversely, this implies that half of management functions will not work unless informal, one-on-one conversations are intentionally created.
The principle that positive feedback can be given quickly and by any means is acceptable, but negative feedback must always be given in person, ultimately boils down to how to create a relationship beforehand where people can say difficult things to each other.
Why global corporations deliberately design "accidental conversations"
There's an anecdote that nine Nobel laureates emerged from Building 20, a makeshift wooden barracks at the Massachusetts Institute of Technology (MIT) built during World War II, over a 55-year period, and that the history of the audio equipment manufacturer Bose also began there. Researchers from completely different fields gathered in the same building, and the casual conversations they had were said to have sparked numerous innovations. I think the root of Google's 24-hour open relaxation spaces and Toyota's encouragement of cross-departmental club activities is the same. It's about intentionally designing casual conversation as an integral part of the organization's infrastructure, rather than dismissing it as "waste outside of work."
To be honest, if you try to measure the effectiveness of casual conversation using short-term metrics like "this month's productivity increased by X TP3T," you'll usually conclude that "we can do without it." But I believe that the health of an organization is something that can only be seen over a much longer timeframe. There are hardly any conversations that begin with a calculation of whether they will be beneficial or not; most meaningful encounters and insights for me arise from chance conversations.
Creating an organization where information naturally gathers
Delegating authority makes information harder to see, and cutting back on casual conversation reduces serendipitous insights. Both are areas that are often the first to be cut in the name of efficiency, yet they are actually close to the lifeline of an organization. What I learned through managing the Philippine subsidiary and delegating authority within the company is that an organization where information naturally gathers is not one that relies on the assumption of good faith and waits for people to report anything, but rather one that intentionally designs both an environment where information is sought out and an informal setting that makes it easy to share it.
I believe this "sense of things becoming invisible" and the question of how to make them visible again are not limited to organizational development. Brands and business strategies, if left unchecked, will remain vague images existing only in the minds of the business leaders themselves. The process of verbalizing these into a form that others can understand and disseminating it to every corner of the organization has almost the same structure as the "design of information circuits" that I have written about today. If there are any business leaders who feel that important information and strengths within their company are becoming difficult to see both from the outside and from within, that feeling itself should be the best clue to thinking about the next step.
After starting his own business at the age of 26, he has over 20 years of management experience in the design and branding fields. In 2016, he moved with his family to the Philippines and established a local IT outsourcing company, leading its global expansion. Currently, as a "GLOBAL BRANDING AGENCY," he supports the growth of companies while also actively working on organizational reforms within his own company. Based on the real-world struggles and firsthand information he has faced in organizational development and overseas management, he shares practical branding and organizational theories that are thoroughly aligned with the perspective of business leaders.
