Can Organizations Be True Meritocracies?

Meritocracy has been a major topic of discussion in the corporate world of late. And why wouldn't it be? It is an admirable goal to reward your highest achievers with the best positions, compensation and considerations. Empirically, it seems like things should always work that way.

However, now that start-ups and small firms have become such a driving force behind our nation's economy -- many of them lending full-throated support to the pursuit of meritocracy-- the concept has gained further strength. Even still, a system that seems to make so much sense on its face has been the subject of recent controversy.

Beyond the startup world, more organizations are adopting this concept and trying to make it their own. Many are moving away from making career advances and promotions based on seniority, legacy and tenure and instead are embracing talent, passion and ambition. There is a way to install a proper meritocracy while avoiding its inherent pitfalls.

Consider Kraft Heinz Co., a mainstream consumer brand majority-owned by the famously merit-focused 3G Capital. Besides having a culture of ownership, the company follows a performance-based approach. As employees at every level deliver results, they are rewarded and can blaze their own trails within the company, allowing them to take control of their own careers. In this case, meritocracy has proven successful not only for its employees, but also for the company, which reported a 61 percent increase in profits for the first quarter of 2016.

What does this example tell us about "merit" and "talent"? What does meritocracy really mean for a business organization? And, how can a company truly succeed at it?

The idea of meritocracy in the American workplace first took hold in the U.S. during the late 19th Century when the Pendleton Civil Service Reform Act mandated that government jobs be awarded based on merit. The term in its modern use was coined in Michael Young's The Rise of Meritocracy in the 1950s. However, since then, it has evolved to mean slightly different things to different people.

For some, a meritocracy is a system where leadership and responsibilities are assigned based on an individual's abilities. For others, meritocracy should provide an environment that motivates people to try new things and recognizes great ideas, regardless of a person's age, tenure or experience. And for others, such as Jim Whitehurst, CEO of Red Hat and a pioneer of meritocracies in Silicon Valley, a meritocratic business is one that encourages people to express their opinions freely; nonetheless, it gives priority to the ideas of those who have built a reputation within the company and achieved substantial results.

The interesting thing I find is that, as these views diverge, they all have some truth attached to them. In fact, a true --and successful-- meritocracy should be a combination of all of them. In other words, employees' growth within an organization should be based on merit as well as the ideas they bring to the table and their track records.

However, it is very important to note that for this structure to work, it needs to be flexible. First, it has to provide employees room to innovate, take controlled risks and even fail. Empowering employees allows them to build on their talents and consequently perform better.

Second, your meritocracy must be dynamic. Today's business world is defined by constant change and movement. As such, younger generations of employees are also becoming more complex workers, mastering vast skill-sets to be effective in their professional roles. Basically, they now know more about different things and can wear many hats. For example, more and more, marketing executives today are expected to possess a mix of creative and technical abilities, ranging from content creation and brand expertise to analytic, SEO and social media experience. Some of these practices didn't even exist a decade ago in the corporate world. How many people in your office were proficient in Photoshop 15 years ago?

As employees evolve and the business world keeps spinning faster, our understanding of "merit" and "talent" change too. Defined by the circumstances of the moment, a set of skills or abilities may gain more relevance over others at a given point in time. This means that all employees should be given a chance to grow, succeed and be heard. Through inclusion and engagement come true leadership and a corporate culture of ideas.

Finally, your meritocracy should embrace diversity. This may sound paradoxical to many, especially since we are talking about a structure that focuses on a merit-first approach. Let's be honest here and give voice to the struggles of so many hiring managers across the world: finding diverse candidates for onboarding or promotion can be difficult, not because they don't exist--the absolutely do--but because we are trained to look in the same places we always have.

Embracing diversity in a meritocracy can seem like anathema to the goal of simply rewarding the best. But consider our national pastime, baseball. For decades, the best players in the game were from places like Baltimore, Georgia, and Pennsylvania. It wasn't until Ozzie Virgil, a U.S. Marine born in the Dominican Republic, took the field for the New York Giants in 1956 that a trickle of Latin American-born players began to enter the big leagues. By the 1980s that trickle was a flood of talent, and today, about one in three Major League Baseball is Latin.

For the better part of a century, professional baseball, perhaps the purest meritocracy there is, was not interested in looking in the right places to find the best talent.

To identify top talent, a company's workforce needs to be representative of the community where it operates. After all, talent comes in all shapes and forms. Additionally, a meritocracy that is built on diversity has a stronger potential. Diverse teams offer unique insights and expose the business organization as a whole to new viewpoints and notions.

Meritocracy is a useful concept. It brings out the best in people, allowing them to succeed based on their merit and dedication. If implemented correctly, it can move any company forward, helping it produce great work and enabling it to innovate and expand outside of its comfort zone.