Are Hierarchies a Thing of the Past?

Organizations have certainly become flatter over the years. But is that a good thing?
Business and Workplace Author, Speaker, and Consultant,
April 26, 2012

               Last month, I got two reader e-mails. One was from a 20-something marketing professional who was frustrated by the lack of an organized chain of command at her company. The other was from a 45-year-old who was thrilled that after more than 20 years in corporate America, he was at last working in a so-called “open environment.” No more offices, no more cubicles.

These messages really got me thinking: Are hierarchies dead?

Not exactly. Recent college graduates still know what an org chart is, and most corporate professionals are still promotion-focused, which wouldn’t be the case if there were no positions into which to be promoted. And at many companies, if you bypass your manager to share an idea with a higher-up, you’ll probably get in a bit of hot water.

However, organizations are certainly flatter than they were 20, or even 10, years ago. And research indicates that this is not necessarily a good thing.

Does flat equal stressed-out?

According to the Institute for Corporate Productivity (i4cp), the flattening of organizational structure doesn’t necessarily result in a competitive advantage. The reason for this? Organizational restructuring may lead to greater stress, disengagement and burnout among middle managers.

Middle managers are the hardest hit because expanding spans of control at multiple levels of the organization exponentially enlarges the number of people these managers are directly and indirectly accountable for supervising.

Also, doing away with a clear reporting structure can cause confusion when employees are unsure who to consult, when and for what. A flat organization may also be the kiss of death for those who are inclined to upward mobility. It’s not unusual for young professionals, for example, to languish for years in the junior ranks because their managers aren't moving, so neither are they.

Does flat equal empowered?

Not surprisingly, sources like Entrepreneur say that despite the drawbacks, doing away with traditional hierarchies is a must. Donald Todrin, president of Second Wind Consultants, argues that the flat organization allows managers to make operational decisions without going to senior leadership for every micro issue. In a flat organization, managers and team members are held responsible for success and are held accountable for their achievements or failures. Everyone contributes to decision-making and is in the same boat, pulling together to achieve the same goals.

A solution: a small circle of trusted advisors

Is it possible to have the best of both worlds? I say yes. As a small business owner, for instance, you can empower your employees while still maintaining some semblance of order by hiring a competent senior leader for each department whose judgment you trust as much as your own.  Each leader should have the authority to manage her team autonomously, which may include developing business, hiring staff and managing finances.

In order for this to work, owners and CEOs should make sure managers understand the big picture and direction of the organization, as well as meet frequently to ensure that everyone’s on the same page. They must listen to and support their leaders, fostering an environment where learning, innovation and professional development are rewarded. But while stepping back, they should know what’s going on. By constantly reviewing products and processes, they’ll be able to exercise the right amount of control.

Alexandra Levit is a former nationally syndicated business and workplace columnist for The Wall Street Journal and the author of Blind Spots: The 10 Business Myths You Can’t Afford to Believe on Your New Path to SuccessMoney Magazine’s Online Career Expert of the Year, she regularly speaks at organizations and conferences on issues facing modern employees.

Illustration by Russell Christian

Business and Workplace Author, Speaker, and Consultant,