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The key benefits (and cons) of working in a flatter hierarchy

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Before embarking on the search for a new job, it’s important to take a step back and think about what you realistically want and need from your next opportunity – including your desired salary, benefits, progression, commute and boss. It’s also vital to consider the type of company you’d like to join, and whether a flat or hierarchical structure might suit you best. This is what I’m going to talk to you about in this blog.

But first up, what exactly is the difference between a flat and a hierarchical structure? Also, why is it so crucial to think about which would suit you best?

What’s the difference between a flat and a hierarchical structure?
There are five types of hierarchies, as described in a Forbes article by Jacob Morgan, author of The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization:

1. The traditional hierarchy is the most common way of structuring a company, based on a ‘chain of command’; indeed, it was a model quickly embraced by the military, and most organisations continue to use it. However, this structure has also become increasingly regarded as out of date, due to its high level of bureaucracy and perceived sluggishness. This, combined with the fact that managing directors and CEOs are becoming far more accessible than before, is rendering the hierarchical structure ever-more irrelevant, leading to a trend towards flatter hierarchies. As stated in a previous Hays Journal article, “there is a growing trend towards reshaping processes and structures to better fit those who will be at the front end of them, whether they are customers, employees or people who use your systems.”

2. Flatter organisations are based on fewer layers than traditional hierarchical companies, thereby opening up lines of communication and collaboration. Examples of companies that follow this structure include Cisco, Whirlpool and Pandora, and while some form of hierarchy does still exist within this model, this isn’t necessarily a bad thing. This structure represents the most common stage of flat hierarchies.

3. Flat organisations really are flat, usually lacking any job titles, seniority, managers or executives. The video games developer Valve – responsible for such classics as Half-Life and Counter-Strike – and multinational manufacturing company W.L. Gore & Associates are examples of companies based on flat structures.

4. Flatarchies sit somewhere between hierarchies and flat organisations, incorporating something of both structures. Organisations with this structure are highly dynamic in nature and can be thought of as not having any single constant structure at all. Lockheed Martin, Google, 3M, LinkedIn and Adobe are among the organisations to have used this structure.

5. Holacratic organisations have previously been described by the media as “bossless” organisations, with the basic goal of this structure being to enable distributed decision-making while allowing everyone to work on what they do best. Zappos and Medium are among the best-known organisations to have experimented with this model.

Big businesses are flattening out too
There’s a big movement towards the flattening out of organisations. In Jacob Morgan’s book, he talks about companies moving from traditional hierarchies to flatter organisational structures – and this transition is by far the most common, and thus the one you should be most aware of.

You might imagine it to be merely start-ups and not-for-profit businesses that would suit this kind of structure, but companies employing thousands of people are also going down this route.

Furthermore, a report published in April 2019 – entitled The Flattening of the Firm: Evidence from Panel Data on the Changing Nature of Corporate Hierarchies – has detailed that flattening is also happening at a corporate management level, with “layers of intervening management… being eliminated”, while the CEO is increasingly “coming into direct contact with more managers in the company.”

Key benefits of working in a flatter organisational structure
At their best, flatter structures are about taking out the layers, making things more transparent and allowing communication to flow seamlessly up and down. Therefore, the emphasis of such structures is less on command and control, and more on providing feedback and collaboration.

The various observed advantages of flatter organisational structures include:

 

What makes someone thrive in a flatter organisational structure?
Do you have the traits needed to succeed in a flatter organisational structure? This Forbes article co-written by Davide Casali of Automattic shares five leadership attributes or attitudes needed in flatter organisations – namely:

1. Act: “You already have permission” – in a flat structure, you don’t always need to get authorisation from someone else for every aspect of your work
2. Flow: “Every idea is playdough” – projects, proposals and ideas should be seen as mouldable, rather than concrete, fixed and immovable
3. Open: “Everything is transparent” – transparency allows for judgements to be made by everyone involved in a project, bringing new values and perspectives and improving quality
4. Accept: “It isn’t easy being green” – when everyone feels they have the ‘green light’ to give their input on your project, it can take a lot of confidence to present your ideas in the first place. However, the overall benefits for the project can be immense
5. Share: “Communication is oxygen” – getting the most out of a flatter structure also means being able to foster open conversations, so that blind spots can be avoided, issues caught earlier and the quality of work of every employee improved

If those working within a flatter structure are to be successful in doing so, they must also be comfortable with change, as well as able to embrace vulnerability, learn to be themselves and show emotion. The traditional notion of the more controlled and stone-faced manager or professional who refuses to show any emotional side so that they can project authority, for example, simply has to be abandoned in a flatter organisation.

The people who gain the best results from this organisational structure therefore tend to be those with strong soft skills, rather than necessarily always those who possess the most in-depth technical expertise in their field.

Does a flatter organisational structure mean flatter career prospects?
Unfortunately, there can be downsides with a flatter structure, such as the lack of supervision or a specific boss to report to. Nor are accountability, responsibility and potential progression paths as clear in such a structure.

Research from Gallagher, for instance, shows that career pathways become more opaque when the bureaucracy and hierarchical status associated with multiple layers of job and pay grades are removed. Sadly, this seems to have led to many employees believing they need to leave a company to advance their careers.

This comes on a backdrop of clear career progression becoming an increasingly important priority for many workers. Gallagher’s 2018 Organisational Wellbeing & Talent Insights Report cited research that found 91% of Millennials regarded the potential for career progression as a top priority when seeking a new job. Furthermore, while three-fifths (60%) expressed a wish for formal feedback on career and professional development every one to three months, nearly two-fifths (38%) only received it once a year or less.

So, if you’re attending an interview at an organisation with a flatter structure, you may wish to ask questions and do research to ensure they have the transparent career progression paths that you’re looking for. You can also conduct research online to determine how committed the business is to lifelong learning and the development of its people. Another good idea is to use the time in the interview to try to assess how committed your potential boss is to learning.

An organisation with fewer layers certainly has its benefits as I’ve outlined, but this structure might not suit everyone. So before you start your search for a new job, you should think carefully about what hierarchical structure might suit you best in an employer.

About the author

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Nick Deligiannis

Managing Director

Nick Deligiannis began working at Hays in 1993 and since then he has held a variety of consulting and management roles across the business. In 2004 he was appointed to the Hays Board of Directors. He was made Managing Director of Australia and New Zealand in 2012.

Prior to joining Hays, he had a background in human resource management and marketing, and has formal qualifications in Psychology.

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