Kill The Hierarchy!
Transitioning People Through Constant Change
In my last four posts - Game On! - I explored the roles needed to be in place within the organisation to assist the successful transition of people through constant change.
For an organisation to survive and thrive in a world of constant and uncertain change, the organisation has to be one in which leadership is important, but MORE important is a collaborative workplace in which transparency and creative freedom reign over hierarchical boundaries. This enables innovation, creativity, experimentation, rapid decision-making, agility and employee ownership, engagement and influence. There is widespread autonomy and everyone leads.
No one ever did anything awesome or great just because they were told to!
The ‘Kill the Hierarchy’ model shown the diagram below, illustrates the changes needed to move to a flatter structure, and it is these changes that we shall be exploring in this series of posts.
Moving to a flatter structure
The only way to enable a ‘faster’ organisation that can respond to constant change is to flatten the structure. It needs to move away from a structure of hierarchical control to a flatter structure that removes the bureaucracy that slows organisations down.
It not about having no structure at all and having no hierarchy – I think there will always be an element of hierarchy.
There are organisations such as Valve Corporation – a leading video game developer and digital distribution system, and Morning Star – a leading food processor, that have decided to move to a completely flat structure.
There are others that have moved to a ‘flatter’ structure such as W.L. Gore – an international industrial products company –, which has a structure that has basically three levels in the organisational hierarchy - the CEO (elected democratically), a handful of functional heads, and everyone else. Facebook, Pixar, and Toyota are other examples of organisations with a flatter structure.
Whether organisations move to a completely flat structure or a flatter structure, informal hierarchies will emerge just as they do in nature. However, this type of hierarchy is very different from the social constructs we impose with the sole intention of ‘keeping control’.
I don’t believe that ‘flat organisations’ are truly ‘flat’. They are just flatter than tall organisations. Tall organisations shift the responsibility up the management ladder whereas flatter structures empower employees to make decisions and feel responsible for the organisation’s success.
Characteristics of flatter structure organisations include an increased level of communication between employees and management, greater democracy and a greater level of innovation. Communication is usually faster, more reliable and more effective than in tall structures. Direct employee input leads to more support for decisions and fewer behind-the-scenes power struggles and disagreements.
Who’s doing it?
W.L.Gore, one of the most successful organisations in the world, has more than 10000 employees. All decision-making is done through self-managing teams of 8-12 people. The Gore website states:
“Leaders may be appointed, but are defined by their ‘followership’. More often, leaders emerge naturally by demonstrating special knowledge, skill or experience that advances a business objective”.
At Morning Star, rather than pushing decisions up, expertise is pushed down. In many organisations, senior executives trained in the science of business analytics make the key decisions. They have a wealth of data at their disposal and analytical prowess, but what they lack is context – an understanding of the reality and facts at the coalface. This is why decisions that appear absolutely brilliant by the top-level executives, are seen as idiotic by those on the front line. Roughly half of the employees at Morning Star have completed courses on how to negotiate with suppliers, and financial analysis. This makes the doers and the thinkers the same so that decisions are faster and wiser.
Valve, considered one of the most successful companies within its industry, has approximately 250 employees and an estimated worth of USD$3 – $4 billion. Rather than assigning permanent managerial staff, Valve rotates its leaders on a per-team, per-project basis. Rather than creating permanent departments, Valve allows employees to chose the type of work that they want to do.
Why are they doing it?
According to researcher Tim Kastelle, this flatter approach is great for organisations that are looking to innovate, need to respond to a rapidly changing environment and have a shared purpose.
In what is now termed a volatile, uncertain, complex and ambiguous (VUCA) world, organisations will have no choice but to be able to respond to constant and unpredictable change.
When employees have influence and can actively participate in decision-making, they have a sense of ownership.
The flatter structure empowers employees, and as they take on a bigger role within the organisation, they become increasingly motivated to be successful. Reducing middle management means there are fewer layers between the most senior level and the front-line employees – making it easier to communicate and drive change.
As stated in the Morning Star article “What Is Self Management?”
- People are generally happier when they have control over their own life (and work)
- It doesn't make a lot of sense to give the decision-making authority to the person that furthest (literally) away from the actual work being done
- When you give good people more responsibility, they tend to flourish
- The traditional hierarchical model of organizations is not scalable—in fact, it's a recipe for a slow painful death
- There's an undeniable link between freedom and economic prosperity in nations around the world—and, further, an undeniable link between lack of freedom and corruption at the national level. The same is true of human organizations in general.
To successfully transition people and the organisation through constant change, we need to remove the bureaucracy, flatten the hierarchy, speed up decision making, empower and involve and employees and give control to those that are the one actually doing the work.
This post has been an introduction to the series of posts exploring how organisations need to consider structural as well as cultural changes to bring about a serious respond to a world of constant disruption.
Upcoming posts in this series entitled ‘Kill the Hierarchy’ will continue to explore how we flatten the hierarchy in order to achieve rapid and decentralised decision-making, employee engagement, high levels of collaboration, widespread autonomy, trust and respect, and an environment in which everyone leads.
More posts on their way over the coming weeks and months, exploring how we need to take a fresh and radical look at organisational change management, and the changes we need to make if we are to thrive.
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