5 Ways to Make the Shift to a Flat Structure

How to go flat without flatlining

It’s happening everywhere: Leaders opting to dismantle traditional structures of operational management in favour of leaner, less encumbered versions. But these flatter configurations don’t always deliver better results. Unless they’re rooted in fields of value, that is.

Flat is the new black

There are several reasons why business is embracing the idea of the flat organisational structure; also referred to as the flat structured leadership model. Together, these reasons comprise a kind of ideology; fed, on the one hand, by insights into the shortcomings of the traditional, hierarchical organisational structure, and fueled, on the other, by the demands for faster, smarter decision-making and agile development.

You need to look at these reasons, if you’re considering adopting a flat structure, or even just looking to transition to a flatter version of your current hierarchy.

Let’s start with the shortcomings of the traditional model. They’re obvious because they’re ubiquitous.

Delayed communication

Typically, in the top-heavy hierarchical structure, decisions made by C-suite executives are communicated to management teams, and from there downwards, often via internal communication channels, to employees at lower levels of the organisation.

Only, by the time information reaches employees in regions, or in the field and on the customer-facing frontline, the information is received as directives. Quite literally, orders from above. For employees, the experience is often one of disinvolvement, disconnection and exclusion. In culture terms, it spells disengagement.

Poor management

The saying, ‘People don’t leave companies, they leave managers’, is born of truth. In hierarchically structured companies, the problem has less to do with the existence of middle management, than with the quality of that management. Put simply, too many managers lack the skills needed to motivate, engage and reward people effectively. The result is demotivation, low morale and high staff turnover.

Lack of innovation

Without the freedom to operate autonomously and to self-manage, employees are more susceptible to boredom, drudgery and disillusion. ‘Do the bare minimum’ becomes the status quo, and proactive behaviour disappears. Also, without scheduled time for innovation and access to additional resources and systems that support innovation, the focus in hierarchical organisations remains on ‘business as usual’.

Let’s look now at the primary benefits associated with the adoption of a flatter structure, which help companies rationalise the decision to transition.

Lower costs to company

Management in all its levels – lower-tier, mid and upper – is a costly overhead. In a study conducted by Bain & Company’s Michael Mankins, of the cost of adding a manager, a key finding emerged: What Mankins and his team refer to as “the multiplier effect”. Essentially, that with the new addition to management, comes more work – and with it, the need for additional resourcing.

So, it’s not surprising that, in an effort to improve efficiencies, many companies choose to downsize their management tiers. Referred to as “delayering”, this downsizing is a significant step towards reorganising around a flat structure. However, to transition successfully requires that companies empower employees to self-manage. Key to this empowerment is training in higher-level management skills, effectively filling the gap created by the loss of management personnel.

Speed to market

It figures that with less people involved in decision-making, and less decision-making processes for people to follow, the faster products and services can make it to market. Also, with less layers between production and development teams and decision makers with the power of approval, more projects see their way to fruition. Growth becomes a by-product of proximity.

As attractive as these benefits are, there is still considerable risk involved in switching from a hierarchy structure to a flat one. Not to mention the time, energy, resources and costs associated with this type of transformation. A way to mitigate the risk – and to rationalise the cost of transitioning – is to determine where your organisation produces the most value, and from there, to assess which roles are critical for the continuance of value creation and production.

We met with a CEO recently, who involves himself in project development across all five lines of the business. He’s an advocate of the flat structure for the immediacy of innovation; also for the ability to fast-track projects deemed to be market winners. He refers to the high-value areas within the business as “pockets of excellence”. And sure enough, we observed a noticeable absence of managers in these areas.

At Humanist, we call these areas ‘fields of value’ for a reason; to flourish, they require certain prevailing conditions. For one, the creation of an enabling environment. This includes the provision of high-grade development hardware and software, as well as access to project support, in the form of agile scrum masters and agile project management tools, such as Wrike, Monday, Zoho and Trello.

Another key condition is effective communication; with access to real-time communication platforms that support rich content sharing and commentary, the value of the project is both apparent and prioritized.

So, what are the steps to ensure a smooth and successful transition to a flat model of operational management?

There are five steps, we think, are critical:

1. Go talent scouting

There’s talent to be found in every organisation; you just need to know where to look. And don’t assume it’s only in your higher pay grades. Instead, follow the trail of value from its presentation (usually by upper management), through the different layers of your organisation, to its source. Usually, you’ll uncover a core team that is working dynamically, and with dramatic results. Talk to them. Ask them what more they need. Then, provide it. Enable them every way you can.

Also, look among your people for signs of potential. This is your future talent, and it needs nurturing. Send out surveys to find out what people think about your organisation, its purpose and future prospects. Generate competitions that invite innovation and creative thinking. Start a think tank, and turn the learnings into workshops. Make your company’s value agenda transparent. Doing so frees people up to participate, and to unleash their full potential.

2. Identify your disablers

When last did you run an audit of factors disabling high performance in your organisation? If your organisation has a top-heavy hierarchy, there’s likely to be a high degree of control. Ask yourself, is this control inhibitive of innovation and fresh expression? Look for evidence of low energy, lack of collaboration and accountability. They’re telltale signs that your organisation is overpowered and obstructed.

Address these disablers by defining new roles within the company for value creators and value enablers. Task the people in these new roles with projects that can be easily shared and showcased across the business, as examples of innovation in action.

3. Create a platform for direct engagement

Typically, organisations with top heavy hierarchies share information with employees formally – at quarterly town halls, or annual roadshows. Circumvent the layers separating frontline employees from the C-suite by introducing a platform for direct engagement. With the ability to interact with one another in an open forum, knowledge and idea-sharing become daily practices, while decision-making is made visible.

4. Foster trust

If you’ve uncovered one or more fields of value within your organisation, you’ll know that a key characteristic of value creators, is trust. In the absence of a long chain of command, people come to rely on one another, directly and repeatedly. So, break down the long chains of command and communication between people, and hand over accountability, too. This helps people to adapt to a new way of working together, in which ownership is shared, and trust is fostered.

5. Show people it’s working

Like any change, the transition to a flat structure is likely to be met with some degree of apprehension, even aversion. That’s to be expected. Often, hierarchical organisations are perceived as solid and unshakeable. For many, there is security in this perception. That’s why it’s crucial that you demonstrate the success of going flat, quickly and repeatedly. They don’t have to be large-scale examples of success, either. Sometimes, the smaller stories, rich with human truth, are the most persuasive and compelling.

It’s clear that the transformation from heavy, hierarchically-driven structures of management to flatter, more inclusive and involving models is not an easy process. Change never is. But, as we’ve shared, the benefits can be plentiful. Most notably, the discovery of fields of value within your organisation. And the means of cultivating them towards an abundant future.