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Will Adopting a Flat Organizational structure Be Effective or Fruitless?
According to Mercer’s Global Talent Trends Study 2017*, 93 percent of companies are planning an organizational redesign in the next 2 years. Many of those organizations will be shifting from a traditional, hierarchical approach to a flatter management structure.
The flat organizational structure has fallen in and out of favor over the past few years as a solution to some of the problems that organizations face in today’s quickly changing business environment. The shifting business landscape shows a trend toward more decentralized authority, as well as more independent and inter-dependent teams. Mangers and leaders will need to rely on influence and collaboration to get results instead of a hierarchical “chain of command” approach.
If your organization is considering adopting a flatter management style, it’s good to consider these advantages and disadvantages of flat management:
Advantages of flat management
Flat management, or even a network-based organizational structure, can provide multiple benefits for organizations at a time when the number of decisions is increasing and leaders must focus on strategic issues more than the day-to-day work. We often see organizations shifting from a hierarchical system with a top-down chain of command to a flatter structure in an attempt to become more efficient.
Flat management advantages include:
- improved decision-making
- encouraging more collaboration
- increased speed of innovation
- reduced costs
These flatter organizational structures allow decisions to be made where the work happens and by those with expertise in the specific technology, techniques, challenges, and skills in the business area. Leaders then can be focused more on strategic issues and supporting their employees versus doing as much of the daily work. Reducing the amount bureaucracy allows organizations to be more nimble and thus, more competitive.
Disadvantages of flat management
While this could sound like all organizations should just become flatter, the reality is that it requires a different brand of leader for a flatter structure to be successful. Organizations without the right kind of leader will not find flat management to be a quick-fix solution.
These leaders will be tasked with more responsibility and face new challenges, requiring new skills to succeed. It can be a challenge for employees who lack the necessary skills to keep pace to deal with change and ambiguity unless they are provided training for the skills and competencies they need to master.
Of course, without the proper implementation and communication, flat management can also lead to role confusion for employees and a lack clear opportunities to progress through the organization.
What does a leader in flat management look like?
He or she must be flexible and agile, think strategically, promote clarity, inspire a vision, and provide direction. It is critical for these leaders to have strong teamwork skills–the ability to build and align teams for competitive advantage, to drive results through influencing others, and to keep people connected and engaged. He or she should also be skilled in driving innovation and continuous improvement by promoting risk tolerance, having strong business acumen and judgement, and managing increasing levels of complexity and ambiguity. Of course, the characteristics of an admired leader (like forward-looking, honest, and supportive) are good indicators as well.
Though this could be the wave of the future, it is not a turnkey solution. Organizations will not be able to simply switch their structure and be instantly successful. To adequately utilize the benefits of a flatter structure, businesses will have to focus on the leaders that make that structure functional and effective in the changing business conditions we encounter today.
*Mercer Global Talent Trends 2017 can be found here: https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html