How flat should organisational structures be?

April 30, 2022

In March, the results of Google’s annual employee survey, known as Googlegeist, were issued to its employees. These were promptly leaked to Business Insider, with the headline statistics centring on employee dissatisfaction with their pay in comparison to other tech companies. However, one further notable point of dissatisfaction was revealed to be bureaucracy at Google, with fewer than half of employees (46 per cent) responding positively to a question about whether their work is slowed by unnecessary hierarchy or bureaucracy.

In response, Senior Vice President Prabhakar Raghavan said that “we need to bring more attention to busting bureaucracy and ensuring we can act quickly when needed”, while the CEO of Google’s Cloud division Thomas Kurian said that “barriers to decision-making” remain.

Is there merit to ‘flatter’ organisations?

The idea of flatter organisational structures is not new. Back in 2011, influential business thinker Gary Hamel spoke of the need to ‘fire all the managers’ in a bid to greatly improve the efficiency of businesses. Such an approach to removing layers of bureaucracy was elaborated upon in Brian Robertson’s 2014 book Holacracy, and Professor Julian Birkinshaw of the London Business School (see this month’s In My Opinion) feels that such self-organisation has always been seen as a desirable way of working.

Removing layers of bureaucracy and decision-making at a company like Google could be of benefit. Google’s very centralised structure and chain of command is seen by some to make it less agile when it comes to responding to market changes.

Can we really dispense with management?

Despite flat organisations being the current trend, not everyone is keen to jump on the bandwagon. The Economist’s Bartleby column feels that “organisations embrace flat hierarchies at their peril”, as getting rid of management simply results in informal hierarchies emerging, and that layers of bosses bring essential structure. Professor Steve Andriole feels that this essential structure is key for implementing performance metrics for employees, something even more crucial to have in the era of hybrid working. Even in startups, where flat structures are increasingly popular, managers should in place to prevent a chaotic work environment, and Saerom Lee of the Wharton School (see this month’s interview) argues “there are many cases where startups fail simply due to the lack of management structure.”

A compromise for those seeking less bureaucracy without forgoing all aspects of existing management may look to organisations with decentralised structures. Here, mid and lower-level managers have the majority of decision-making power meaning, according to Stephanie Burns, those closest to ongoing projects are the ones with the most say.

A decentralised structure means you don’t have a situation where 100 engineers are reporting to one manager. Instead, the 100 engineers are running their own empowered teams of, for example, 5 to 10 engineers, each without necessarily needing too much command and control hierarchy to manage their performance. They are empowered to manage their own performance, and as long as everyone can access the information flows, and the relative performance of each sub-unit the need for command and control is reduced

The agility of decentralised organisational structures has been on show over the last couple of months, without many people realising it. The war in Ukraine has seen a large Russian force taking on the comparatively modest Ukrainian army, yet consistently coming out second best. New York Times columnist Thomas Friedman argues that the centralised nature of Russian forces is a key reason behind why so many generals have been killed, and that Ukraine’s units have not been impacted by Russian cyber-attacks due to the decentralised nature of their operations.