Over the past two and a half years, we’ve seen companies of all sizes embrace remote and hybrid work as a permanent part of their business models. This trend, in turn, is helping to accelerate the decentralisation of businesses that once operated in a monolithic and hierarchical manner. As a result, we can expect to see business structures become flatter and more egalitarian in the years ahead.

In a flat organisation, there are fewer layers of management between business leaders and employees. Employees are given more autonomy and responsibility, gaining the power to make decisions they’d refer to a middle manager in a more hierarchical organisation. They are seen as adults who can be trusted to get on with their jobs and make wise choices, without being micromanaged.

Proponents of flat organisational structures point to a number of potential benefits:

  • Decisions can be made quicker when they don’t need to go through multiple layers of bureaucracy. People at the coalface can respond rapidly to customer needs or changing market conditions.
  • Needing to employ fewer middle managers may help to bring overheads down.
  • Giving people autonomy and accountability might spur creativity and innovation.
  • Collaboration and transparency might be enhanced in a more egalitarian organisation.
  • Top talent may be eager to work for a company where they are empowered to make decisions.

However, flat organisational structures also have their critics, who claim that flat structures seldom work when a business begins to scale. One danger is that people might not know where to turn for help when they need it. Fewer people will make the really big decisions, which could lead to inertia. And in the absence of a formal hierarchy, unaccountable, informal power structures may replace it.

Consider the example of Valve, the owner of the Steam PC gaming storefront. It promised new recruits that there would be no managers to report to and no stifling bureaucracy. Instead, ex-employees describe how powerful and unaccountable ‘barons’ ruled the roost. “There is actually a hidden layer of powerful management structure in the company…which made it feel a lot like high school.”

Here are some best practices that organisations can follow to reduce layers of management, while empowering employees:

  • As the organisation grows, it might be necessary to divide teams and functions into smaller modules. Once this is done, it’s key to create ways for these modules to cooperate and coordinate on matters that affect the whole business.
  • The Chartered Management Institute (CMI) in the UK recommendscreating a ‘flat culture’ where everyone feels comfortable asking questions and challenging the status quo, regardless of their seniority.
  • PeopleTacticsemphasises training managers to think as mentors or coaches versus traditional people managers, as well as reviewing the organisational chart to see where they can create cross-functional roles.

The elephant in the room is the employee who needs to adopt a culture of self-mastery and self-leadership. Much work needs to be done to ensure that those who would naturally be followers, and whom expect and need guidance, are given the right tools and development to be autonomous and to have the confidence to step up and step out. It can take a great deal of effort for some people to self-lead. It goes beyond the organisation’s culture and extends to the make-up of the individual. It is an observable reality that many people contend that they do not want to be micro-managed and yet, they are unable to fulfil their roles without guidance which in fact may be misconstrued as, micro-management.

Flat organisational structures are not easy to create and sustain; for some businesses, a world without middle managers may never become a reality. However, most businesses can take steps towards empowering more of their people to make decisions. Getting this right demands that the business has clearly defined goals and growth plans, as well as the ability to get people aligned behind the strategy.

References:

https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/the-organization-blog/fitter-flatter-faster-how-unstructuring-your-organization-can-unlock-massive-value

https://www.theguardian.com/commentisfree/2018/jul/30/no-bosses-managers-flat-hierachy-workplace-tech-hollywood

https://www.managers.org.uk/knowledge-and-insights/article/why-flat-structures-destroy-employee-retention/

https://peopletactics.com/rethinking-structure-benefits-flat-organization/