Lonely at the top: Should we be removing corporate hierarchy?

by Cameron Edmond25 Nov 2013
Hierarchical organisations date back almost as far as recorded human history, based on the notion that there needs to be one individual – or a small number of them – making final decisions to ensure clear progression.

One could be forgiven for feeling that annihilating this system would result in anarchy, which is why this set-up has endured throughout time, finding its way into the corporate world well before the white collars. However, Tim Kastelle of The University of Queensland Business School believes that “making everyone a chief” will benefit organisations more than damage them, and that it is time to rethink management.

“There are sound business reasons for treating people with dignity, for providing autonomy, and for organising among small teams rather than large hierarchies,” he wrote in The Harvard Business Review.

Kastelle listed a number of organisations that adopt exceptionally flat management, such as NFP Second Chance Programme, internet start-up WordPress, and gaming innovator Valve.
Kastelle also mentioned manufacturing firm W.L. Gore, quoting CEO Terri Kelly as stating: “It’s far better to rely upon a broad base of individuals and leaders who share a common set of values and feel personal ownership for the overall success of the organisation. These responsible and empowered individuals will serve as much better watchdogs than any single, dominant leader or bureaucratic structure.”

A fear of change is what is holding many organisations back from adopting a flatter structure, with even those who believe in it unable to imagine a workforce without hierarchy and bureaucracy due to it being engrained in the system for so long.

Kastelle stated that flat structures work best in organisations with rapidly changing environments focused around small and autonomous teams, as well as those who strive for innovation and differentiation. A shared purpose, commitment and belief across the organisation is also important.

While attractive, the necessary steps to ensure a less bureaucratic but still functioning workplace may appear elusive to many employers. Valve’s employee handbook – given to employees when they begin work at the company – makes it known to staff that the company thrives on flat organisational structure, and views hierarchy as a roadblock to innovation. This also acts as a reminder to new employees that they have a large amount of responsibility coming into their role.

The handbook goes on to describe the decision making process in what projects should be worked on, which essentially boils down to an employee deciding on a project and then asking others to get involved. If others in the organisation believe in it and become involved, then the project will come to fruition.

“There’s no secret decision-making cabal. No matter what project, you’re already invited. All you have to do is either (1) Start working on it, or (2) Start talking to all the people who you think might be working on it already and find out how to best be valuable. You will be welcomed—there is no approval process or red tape involved. Quite the opposite—it’s your job to insert yourself wherever you think you should be,” the handbook states.

The handbook also proclaims that “structure happens”, indicating that internal structures will form in teams working on projects that will suit a group’s need, but these are ad hoc and do not result in fixed job descriptions or managerial roles.

“Valve is not averse to all organizational structure—it crops up in many forms all the time, temporarily. But problems show up when hierarchy or codified divisions of labor either haven’t been created by the group’s members or when those structures persist for long periods of time,” the book explains.


  • by kevin 25/11/2013 2:55:47 PM

    it is interesting to observe that the heirachial managment structure is an attempt to model business after the miliary.

    What is interesting is the whilst the management structure continues to change the military model has remained basically the same.

    I always find structure a critical issue because if you get that wrong then everything else tends to follow and you fail.

    I don't believe one size fits all and applaud exploring new models but as always whilst a flatter model may have some appeal it also means much less opportunity for advancement.

    Getting roles and responsibilities well defined is the basic ingredient to what the structure should be and I would love to hear commentary on this subject.

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