Companies that eliminate formal hierarchies must also transform the role of their senior leadership.
Zappos's decision to get rid of its management structures has rekindled interest in the concept of the flat organization. One recent article about the topic--a Financial Times profile of a small German tech company that similarly has decided to forgo traditional hierarchies--caught my eye for two reasons.
First, the company, 6Wunderkinder, has 60 employees, rather than the 1,500 of Zappos, providing a little more relevance to most startups. And second, rather than consider the absence of leadership, the article pays special attention to the importance of leadership in a flat structure.
6Wunderkinder was founded in 2010 as a small team (of six, as its name might suggest), but its headcount has grown 1,000 percent since. In an effort to reinject the entrepreneurial spirit of the company's early days, it has allowed its employees to follow their passion projects and build teams for them, drawn from their colleagues.
The overarching rule is that the project has to fit within the company's goals and objectives. It's up to senior leadership to define the parameters and decide whether or not a proposed project fits within them. In the absence of a formal hierarchy, long-term vision becomes key to keeping a smooth operation.
That's not where senior leadership's role ends, however. In fact, in the absence of middle management, their role starts to look a little like...well, middle management.
The executive team at 6Wunderkinder is grappling with how to best approach setting the kinds of ground rules they feel this structure requires. The Financial Times reports that the company is considering setting time limits to show whether employee-led projects are working, or calling projects off when the team around them starts to complain. Senior leaders also plan to take a more active role in coaching employees, the article notes.
What's the Difference?
It might sound as though middle management roles are simply being moved up into the executive team. If so, it's only in a few areas. For the most part, 6Wunderkinder's new system is designed to free and empower rank-and-file employees--by allowing them to pursue any project that isdeemed a fit, giving them leadership responsibility over it, and by "leaving team leaders to communicate what is going on rather than telling colleagues what to do," as the Financial Times's Jeevan Vasagar writes.
The 6Wunderkinder example stands as a reminder that going flat doesn't mean going rudderless. Instead, it puts an even greater premium on those who remain in leadership positions.