Could a Flatter Organizational Structure Make Your Team More Productive?

Mar 1, 2016
5 Min Read
could a flatter structure make your team more productive

could a flatter structure make your team more productiveOn days when being a manager or dealing with a manager is making you tear your hair out, you might wonder how things have been going at Zappos in the two years since the company famously announced its transition to “holacracy,” a system without managers or titles.

But if you’re tempted to wonder if a flatter, manager-less structure might work in your company, don’t get ready to throw the managers out just yet.

The New York Times, which talked to Zappos employees last summer to see how the transition was going, reported: “Pressed for instances of Holacracy’s achievements at Zappos, employees could offer only pedestrian examples,” such as shutting down a bridge to a parking garage so everyone had to use the same main entrance but later reopening it, and requesting that employees not leave trash on the shuttle bus. “So far, however, no one could point to any innovations that have improved customer service or increased sales. Critical issues like how to hire, fire and pay people in a company with no job titles have emerged as sticking points.” In addition, “It’s taking time away from getting the actual work done,” reported one employee. “I have five hours of meetings today.”

Interestingly, one oft-noted critique of manager-less structures is that authority structures emerge anyway. Brilliant management thinker Bob Sutton points out that when organizations say they’re getting rid of management roles, authority structures tend to stick around anyway, but without a formal hierarchy, people can become “less productive and effective, dysfunctional competition for status emerges, and coordination and cooperation suffer … As you scale an organization, getting rid of the hierarchy – or even assuming that a flatter one is better – is the wrong goal. Your job is to build the best hierarchy you can.”

Moreover, what happens in hard times? Some types of decisions need to have a clear decision-maker at the top: budget cuts, layoffs, and what will happen in their aftermath.

Downtown Project, a Las Vegas urban-renewal project, dropped most aspects of holacracy after finding it was a distraction, especially during layoffs. Transportation startup Shift dropped the system after less than a year, finding that it led to too many meetings and unclear decision-making authority. And last month, the New York Times reported that Zappos is “hemorrhaging” employees, with 18% of the company having left since the previous March.

If you’re feeling like management in a given organization is getting in the way of better, more creative work and better results, that’s a flag to examine why. It might be something about the way management is structured, or how it operates, or it might be a few bad apples. But it’s probably not an indictment of management in general. When managers are working the way they’re supposed to, they’re the ingredient that builds strong teams, makes sure people have clear roles that they can take true ownership of, checks that goals and work plans collectively add up to the big results the organization wants, ensures that people get useful feedback that will help them deliver better and better work, thinks about how to retain strong people, and addresses and resolves problems forthrightly.

When managers aren’t doing that, the problem is that they’re not doing that – not that they exist in the first place. So don’t throw all the managers out just yet.

Learn how you can bring more visibility and transparency to your team by checking out "Understanding the Hidden Costs of Spreadsheets for Managing Projects."

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