Twenty-first century organizations are flattening, but the change can’t happen quickly enough. Although the corporate hierarchy was invented to promote efficiency, it doesn’t work particularly well in a business world that moves at the speed of technology. If you’re holding on to the old, bureaucratic ways of doing things, you're hurting your business. Don't believe me?
1. Hierarchies Move Too Slowly
Organizations need to be able to adapt quickly to changing market conditions, but a complex hierarchy is like a lumbering giant. As Harvard professor John Kotter told Debbie Robins in The Huffington Post: “Put simply, a hierarchy can’t handle speed well. Rules and procedures that inevitably accompany hierarchies almost never change fast even if they are now irrelevant, overly burdensome, and the like. Hierarchies can’t jump to the left or the right easily, and over time it’s easy to keep adding levels and rules, to keep making silo walls thicker.”
2. Hierarchies Are a Game of Telephone
In order for communication to go from the top of the hierarchy to the bottom, it has to pass through numerous managers. Remember the childhood game, telephone? The message you ended up with was usually a far cry from the first one started. That’s a hierarchy for you. In a flatter organization, it’s much easier to promote a culture of transparency.
3. Hierarchies Impede Innovation
In a hierarchy, there’s a process for everything, and usually these processes are followed to the letter. Innovative organizations, however, are always questioning the status quo. They ask: “How can we do this better?” which often results in a sudden change in direction. Hierarchies simply aren’t built this way. If action is going to be taken, it has to be built into the plan a year ahead of time.
4. Hierarchies Discourage the Best Talent
Members of the current generation of 20- and early 30-somethings, otherwise known as the millennials or Gen Y, have made no secret of the fact that they dislike hierarchies. They far prefer to collaborate seamlessly across levels and value expertise over tenure any day. Because this generation will make up three-quarters of the workforce in the next 10 years, companies that stubbornly hold onto their hierarchies will be hurting for employees who feel their contributions will be leveraged better elsewhere.
5. Hierarchies Spell Distrust
In a hierarchy, power and decision-making reside in the hands of a few—presumably because the masses can’t be trusted. Employees are micromanaged to within an inch of their lives so that no unnecessary risks are taken, and over time, this is extremely demoralizing. Recent research has illustrated that employees are most engaged when they feel empowered to drive their careers and complete their responsibilities with autonomy.
Find the Happy Medium
Disjointed communication, clunky processes, boxed-in employees and flagging retention are the hallmarks of a dysfunctional culture, but do you need to abandon your hierarchy entirely? As I have written about before, this is probably not the right answer either. After all, there has to be some mechanism for employees to obtain consistent guidance, secure increasing levels of responsibility and grow in their careers. But there can—and should—be a happy medium.
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