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business, deming, leadership, lean

The Case Against the Flat Organization

Since the 1990s, consultants and authors have been touting the benefits of the flat organization.  Among the advantages commonly associated with flattened organizations are improved innovation, empowered employees, and faster decision-making.  I’ve worked with many “flat” organizations over the years and, rather than improved flexibility and increased speed, found burned out managers, frustrated employees, and high turnover.

Removing layers of management downplays the importance of the coaching and development of future leaders.  When a manager has a large number of people on his or her team, it is not possible to spend the time needed to develop problem-solving or leadership skills of team members.  As a result, the manager resorts to directing and problem-solving, rather than coaching, and employees feel stuck and left out of the process.

Flat organizations utilize the sink or swim approach to developing people – something I’ve never seen work effectively.  When people are left on their own to develop, they will do so in their own way based on their own experiences without the ability to see themselves objectively.  As a result, the company can lose control over its culture and systems resulting in deterioration in customer service and long-term performance.

Understanding the Problem

One of the reasons often given for eliminating layers of management is that managers get in the way and slow down processes.  Although often a true statement, eliminating layers is not addressing the root cause.  The company can benefit more by understanding why its leadership is ineffective, and why its processes and systems are slow, and developing countermeasures that effectively address these causes.

Although there are many companies that do have too many layers of management, improving the situation requires identifying what the organization is trying to achieve and understanding and removing the barriers that are interfering with success – and this is not a quick process.  Firing several managers without addressing the real causes of poor performance can magnify the problems and, after a short-term improvement in results, end up in worse shape than doing nothing.

No Quick Fix

In spite of what many of those who tout flat organizations believe, managers do have a purpose in organizations.  Flattening the organization is a fad that ignores the importance of developing people and continually improving.  As companies like Toyota, Amazon, and Google have proven for many years, long-term success still comes down to effective leadership, respecting people, and a never-ending focus on improvement.

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About Gregg Stocker

Gregg Stocker is a lean advisor for Hess Corporation. He possesses over 20 years experience in a variety of disciplines including operations, manufacturing, human resources, quality, and strategic planning, and has worked in manufacturing, service, and oil & gas industries. He has extensive international experience, including successfully leading an $65 million business in The Netherlands. He authored the book, “Avoiding the Corporate Death Spiral: Recognizing & Eliminating the Signs of Decline,” (Quality Press, 2006) and was a contributing author to "The Lean Handbook," (Quality Press, 2012). Gregg is a frequent speaker and recognized expert in business and performance improvement having been interviewed on television, radio, and in a number of newspaper and magazine articles including The New York Times, Washington Post, BusinessWeek, and InformationWeek. Gregg has implemented change in organizations ranging in size from $10 million to more than $100 billion. He is a team-oriented leader who achieves results by improving teamwork, focus, and communication throughout the organization.

Discussion

2 thoughts on “The Case Against the Flat Organization

  1. Gregg, I beg to differ. Let me turn the argument on its head. GM, at one point had seventeen layers compared to five to seven at Honda and Toyota. GM was bureaucratic, slow to make decisions and slow to improve. Most of what managers did was check on checkers who were checking on checkers in a frenzy of control and budgeting. They added little value. They were not innovating, engineering better cars, or developing people.

    Of course, everything can be taken to excess. Yes, everyone needs coaching and development, and yes, there is a role for management. But that does not mean that there is a necessity for excess layers of management that add little value.

    So, it all comes down to what you define as “flat”. Organizational systems need to be designed intelligently to both reduce bureaucracy, empower employees, and provide for the development of people.

    Posted by Lawrence M. Miller | May 18, 2015, 11:49 am
    • Lawrence – I absolutely agree with you. My point was that flattening the organization without understanding the root cause of the problems you’re facing – or even clearly understanding what the problem really is – can be destructive. It’s a large-scale example of jumping to a countermeasure without understanding the problem.

      Thanks for the comment!
      Gregg

      Posted by Gregg Stocker | May 19, 2015, 6:18 am

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