3 Reasons to Eliminate Hierarchy in Your Company
Hierarchies seem like a logical way to structure a business. After all, if the initial idea was yours, why shouldn't you be at the top, telling everyone else what to do?
Actually, there are some very good reasons why a flatter, more democratic organizational structure is better for your business, says Tim Kastelle, a professor of innovation at The University of Queensland Business School.
Giving all employees power to make decisions can help drive innovation, which is why some of the most successful companies have adopted this model: from GitHub to Automattic, the firm behind WordPress, to W.L. Gore., which has 10,000 employees and elects its CEO democratically.
"There is a growing body of evidence that shows that organizations with flat structures outperform those with more traditional hierarchies in most situations," Kastelle writes in the Harvard Business Review. "There are sound business reasons for treating people with dignity, for providing autonomy, and for organizing among small teams rather than large hierarchies."
Here are a few reasons why your business may be better off flat:
You're more nimble.
If your business requires agile maneuvering, quick decision making, and even faster production, you need to trust your employees to do these things in order to be successful. You create a logjam if your team must await your approval on decisions. "Firms organized around small, autonomous teams are much more nimble than large hierarchies," Kastelle writes. "This makes it easier to respond to change."
You're more focused on innovation.
If your business requires fast iterations, teamwork around the clock, and autonomy, you need to be flat. A hierarchy is likely to get in the way. "Firms organized with a flat structure tend to be much more innovative--if this is important strategically, then you should be flat," he writes.
You have one shared purpose.
A flat structure encourages everyone to work toward a common goal--there is no need for a puppet master controlling people's behavior. If you hired the right people, they will be enthusiastic about fulfilling their shared commitment, Kastelle writes.