"If you want to hire great people and have them stay working for you, you have to let them make a lot of decisions and you have to, you have to be run by ideas, not hierarchy. The best ideas have to win, otherwise good people don't stay."(Found here.)
It's a great bit of wisdom and business insight, and certainly describes one of the differences between great work environments and places that just think they're great work environments. I've learned over the years, though, that the devil is in the details; more precisely, every boss thinks that s/he is creating an environment in which ideas triumph over hierarchy, but the basics of human psychology almost always get in the way.
It's kind of like favoritism. If you work in an organization where the boss appears to be playing favorites, it can be infuriating. The entire office is full of people who are busting their asses to get the job done, but the same few people somehow always end up with the rewards and recognition. Nothing can kill employee morale faster than favoritism, so why do bosses do it? Because, to them, it's not favoritism -- they're just recognizing excellence. From their point of view the "favorites" are simply the office's highest achievers.
And so it is for ideas. Show me an office in which ideas are stifled by hierarchy, and I'll show you an office in which the boss is honestly convinced that s/he is only saying "no" to bad ideas. It could be that s/he honestly believes that the most talented people are also the most high-ranking, and so the higher you go in the org chart the better the ideas become. It may be that the boss listens to ideas from all corners but unconsciously gives the most credit to ideas that come from the people s/he trusts -- which is to say, the same people s/he's already promoted into leadership positions.
Despite what generations of bad movies have told you, no one is a villain in their own mind. There are plenty of business leaders who build organizations in which hierarchy, not ideas, triumph, but they do so in the full belief that they're doing the right thing every step of the way. To realize Steve Job's ideal, therefore, it isn't enough to just tell yourself that ideas should win. You need the self-awareness, the perspective, and the capacity for self-criticism to consider ideas even when they come from the least promising people.
Jobs was famous for criticizing his employees harshly; he had a "Bozo bit" that would flip in his mind and convince him that a valued employee had suddenly become an idiot. Jobs was also famous, though, for coming around to accept and advocate ideas that he initially criticized. Maybe his real gift was the ability to separate the idea from the person who suggested it, and place it in a mental space in which he could see its full potential.