Organizational Structures Going Flat

What is the flat organizational hierarchy and how is it used in management.

Every successful organization functions on some form of structure. The traditional hierarchy has long been the management strategy, with the staff being at the bottom supervised by managers who in turn are supervised by executives. However, that is changing, with many companies now converting to flat hierarchy instead of the tall top to bottom management. A memo titled “This is a long email” was how Tony Hsieh CEO of Zappos, an online shoes retailer, made his company to go flat (Greenfield, 2016).

In his memo, Hsieh announced that there would be no more managers, and gave all employees equal roles in decision making, following a self-management approach goes in line with the company culture, “create fun and a little weirdness” is one of its values (Guzman, 2016). The conventional hierarchy is essentially pyramid shaped, with the CEO high on top of the many managers who in turn are on top of the base of employees. However, in the new flat structure, all these layers are flattened into one, making everyone equal. No titles and no higher ups, everyone is expected to lead.

That might sound hectic to you, but it has proven to be effective. According to research, employees in a flat workplace are “way more innovative and their performance is better” (Lemons, 2015). Valve Corp is a successful video game company that has been “manager-free” since 1996. Employee affairs, such as pay or promotion are determined by their coworkers. All 300 of them have their desks on wheels because this flat way of management requires them to move around a lot for meetings and collaborations (Gotkin, 2012). Still, a flat hierarchy can still be adopted with some degree of power given to a manager. Google, for example, hosts a flat workplace but with some degree of power given to managers (Lemons, 2015).

Some companies apply the flat hierarchy by allowing the team to be completely self-managed, while the role of the leader rotates among the members on a weekly basis (Fried, 2011). This tactic helps employees be more empathetic to managers, and managers to employees as they have been put in the position of that responsibility (Fried, 2011). More and more companies adopt the flat hierarchy as it contributes to team building, and the communication is deeper, which results in a decision that is based on a well-informed discussion, instead of giving and taking commands (Schonfeld, 1994). The flat hierarchy is best applied when exhibiting traits such as listening actively for what people are trying to say, and for the manager to use persuasion instead of commanding (Schonfeld, 1994).

Corporations, big or small, ought to try the flat approach in management. You can go as flat as you think suitable for your kind of business, you can even start slow to test the waters. Employees can work to their fullest potential if involved in decision making. Also, if you think about it, you can save up money for the managerial position that is no longer necessary. A founder can do away with managers, executives, and even CEOs, and just directly deal with the working employees.

References:

Greenfield, Rebecca. “Zappos CEO Tony Hsieh: Adopt Holacracy Or Leave.” Fast Company. Fast Company, 24 June 2016. Web. 25 Apr. 2017. <https://www.fastcompany.com/3044417/zappos-ceo-tony-hsieh-adopt-holacracy-or-leave>.

Guzman, Zack. “Zappos CEO Tony Hsieh on Getting Rid of Managers: What I Wish I’d Done Differently.” CNBC. CNBC, 15 Sept. 2016. Web. 25 Apr. 2017. <http://www.cnbc.com/2016/09/13/zappos-ceo-tony-hsieh-the-thing-i-regret-about-getting-rid-of-managers.html>.

Fried, J. (2011). “When the only way up is out: I’ve always run a flat company-no hierarchy, no managers, just smart people focused on their work. Then a prized employee said, ‘I want a promotion’”. Inc, (3). 35. Business Insights: Essentials. Web.

Schonfeld, E. (1994). “Communication Goes Flat.” Fortune 130.5 (1994): 16. Business Source Complete. Web.

Gotkin, Zev. (2012) “America’s Innovative Companies Are Going Flat.” The Huffington Post. N.p., Web. 11 Apr. 2017. <http://www.huffingtonpost.com/zev-gotkin/corporate-hierarchy-work_b_1962345.html>.

Lemons, Jane .(2015). “Flat Management.” SAGE Business Researcher. N.p. Web. 12 Apr. 2017. <http://businessresearcher.sagepub.com/sbr-1645-94858-2644624/20150202/flat-management>.