Flat hierarchies, or how to reduce productivity in a business
People who know me know that I despise management consulting firms. I have written before how in my view the process of benchmarking has done more to destroy innovation than probably any other practice promoted by both strategy consulting firms and investment consulting firms. Today, let’s talk about another bugbear of mine, the drive towards flat hierarchies.
Removing hierarchical structures in a business has become a mantra of the last two decades. The goal is to allow teams to work together and across teams without having to go up the flagpole to ask for permission before engaging with other teams or individuals. Removing middle managers and even team leaders is supposed to allow the team members to collaborate more effectively with each other without the need for cumbersome bureaucracy.
But flat hierarchies have been criticized from the outset as being vulnerable to making the wrong decisions by inexperienced or unmotivated team members. My classic argument against flat hierarchies was that there is one organisation where the result of inefficient decision-making becomes clear very immediately and drastically, and that organisation has steadfastly refused to implement flat hierarchies: the military.
Think about it. The military constantly has to deal with situations that are very fluent, that cannot be solved by some simple mechanical tasks and that requires a lot of teamwork. And: failures in decision-making can and will have deadly consequences. If flat hierarchies were so much better at coming up with solutions to complex problems, wouldn’t we see a trend towards flat hierarchies in the military by now? The military is famously conservative, but when it comes to improving battle efficacy, it is also famously open to experimenting with new methods. As long as they prove to be reliable, they will be adopted for tactical operators. That tactical operators still rely on hierarchical structures should give you pause.
If you want to dismiss the military as an organisation that should not be used as a template for civilian workplaces that is your right. I would strongly disagree with you, but I accept your opinion.
Maybe the following experiment can make you reconsider. A group of economists recruited more than 1,200 volunteers that were grouped together into 280 teams. The teams were then led into an escape room and asked to find the exit from the escape room within 60 minutes. Escape rooms have become mainstream in recent years, and they are good fun. Teams have to work together to find clues how and where to exit a room. The puzzles are not trivial, and it is virtually impossible to find the exit individually. So, you need to work together in a team to solve a complex problem.
The trick about the experiment with the 280 teams was that some teams were asked to nominate a leader for their team whose job was to either coordinate the different team members or to motivate the different team members. Other teams were not asked to nominate a team leader and were simply asked to solve the puzzle and find the exit within the 60 minutes allotted to them. Originally, the economists thought that there would be a difference between teams that chose a leader to motivate them and teams that chose a leader to coordinate them, but it turns out that there was no material difference between teams that had a leader to coordinate or motivate them. The only materials difference appeared between teams that chose a leader and teams that didn’t choose a leader.
And the difference between those two teams was dramatic. The teams that were asked to nominate a leader managed to complete the tasks in the escape room in 63% of all cases, compared to 44% of the teams that chose no leader. Furthermore, within the teams that completed the tasks, the teams without a leader took about 75% longer than teams with a leader. The gap between leaderless teams and teams with leaders started to widen significantly past the 45 minutes mark indicating that leaderless teams may be doing well at the beginning, but when they can’t solve a problem immediately, they lose motivation or perseverance.
And to top it all off, leaderless teams were not more creative than teams with a leader. Analysis of the originality of the solutions to the escape room problem showed that teams that were asked to choose a leader were no less creative than teams without a leader. Clearly, if you are managing a business, having a hierarchy and leaders for different units and teams instead of “empowering people” to figure out the best way to work for themselves is the better option, no matter what management consultants tell you.
There is no one size fits all approach. Flat hierarchies can be more efficient for less complex tasks; but for more difficult endeavors (45 minutes "benchmark" in the escape room experiment), having a leader can help coordinate tasks and avoid duplication of efforts or working at cross-purposes.
I had not read your article about benchmarking before - a very good read. This is not the first and will not be the last idea dreamt up by consultants to keep themselves relevant. I wonder if they actually implement these bright ideas within their own organizations or is it a case of "Do as I say, not as I do".
My first reaction is that technology is an omitted dimension. Work management platforms reduce the "work about work" that Asana claims can be up to 60% of knowledge work. In this traditional work, a key function managers in the hierarchy is to filter information. But in tech-enabled work, the optimal environment is (mostly shared) transparency such that a manager's job changes; less time spent amplifying/filtering environmental information. The escape room, to the extent all players have access to the entire internal environment, is nearer to to an information-transparent organization.
Viewed through the role of technology's impact on work, both dynamics make sense to me: the military's shift toward looser reins, as Thomas says. On the other hand, having played escape room, the research matches my experience. I did it once without any leadership and we were a chaotic mess (although I'm unclear what it means to "motivate" in an escape room!). In this way, I'm thinking that as the organization shifts toward information transparency, the nature of the old hierarchy changes but in some way that leadership and management still have a role.