We first became intrigued by the concept of a flat organization after reading a piece published by the Harvard Business Review entitled, “First, Let’s Fire All the Managers” (http://bit.ly/1cFP0Lo). The article focuses on a tomato processing plant named Morning Star that produced $700 million in revenue in 2010 and had no managers. Zero. Not a one. At this time, we were running a company called FetchBack, an online ad-tech business. We contemplated the endeavor of making our company flat as well; however, FetchBack had recently been acquired by eBay, and we ultimately decided that it would not be feasible given our new corporate overlords.
It’s a new day and we have a new startup called adhesive.co. adhesive is a new ad-tech company in a market that moves faster and faster by the day, and an industry in which if you’re not innovating, you’ll quickly become roadkill by those who are. The conversation internally was simple: Should we do this? Is now the time to put forth the effort to become a flat organization? It will be painful, and we’ll have to learn on the fly since there isn’t a lot of documentation on this.
The answer was quick and definitive: Hell yeah, let’s do this!
Our founding fathers didn’t aim to create a better monarchy; they sought to supplant the concept of a monarchy entirely. They wanted something more, something to replace the voice of few with the voice of all. They set the stage for what would become the most prosperous nation on the planet based on a core tenet: freedom.
We all want freedom and autonomy. We want to do the things we want to do, and we want to do them the way we feel they should be done. We want to do it our way. The ability (or lack thereof) to do so is arguably the most important factor when it comes to our workplace satisfaction. Why is it we feel that if we extend that level of freedom throughout the workplace the entire company will just fall to the ground? Surely nobody will show up for work and nothing will get done, says conventional wisdom. Letting employees dictate their own schedules, purchase resources from the company checkbook without approval, and taking unlimited vacation time is just a recipe for disaster. We must hire managers to babysit our adult workforce to keep order and productivity in line. Companies think they just can’t function without the typical command and control we’ve grown accustom to.
The world today creates more and more urgency for companies to move faster, adapt quicker, and innovate higher. Doing so is required just to stay alive, and multi-layered organizations are at a disadvantage based on their bloated structure alone. In today’s market, “A-Players” can go wherever they want based on who offers the highest compensation or the sexiest projects. The remote workspace is the new way to get things done. More people are working from home than ever and the numbers are rising (as may be the sales of sweatpants, but that’s a discussion for another manifesto). This all adds up to one thing: if you want to have an organization that dominates in its field, then you MUST provide a work environment that attracts — and keeps — top talent. The A-Players.
With near-ubiquitous access to technology, the new battle that our country faces to remain a competitive force hinges on creativity and innovation. Today’s most creative and innovative companies recognize this and have made a conscious effort to focus their cultures on freedom and choice as a means of fostering innovation. They’ve disregarded the top-down decision-making, micromanagement and clock-punching environment that was pervasive during the industrial revolution in favor of one that, well, works.
There are many components to running a flat organization, but making and keeping commitments is the heart. If the company cannot skillfully do this and confront those individuals who are incapable of keeping commitments, it will fail. Simple as that.
Responsibility is freedom’s twin.
Developing a direct sales staff has been at the core of both the existing and previous company. The information out there on companies that have developed a flat structure is scarce. It’s even more scarce for organizations that are prominently sales cultures.
“Managing” a sales staff is it’s own unique beast. FetchBack was a very successful business by most standards. We grew the business from zero to business that was producing more than 10 million in profit annually in a short 5-year span. That said, I would say some of the biggest issues we dealt was a management one. I believe that every business owner that’s developed a sales staff would agree that finding a good sales manager is one of the most difficult positions to fill correctly. We had it all. Sales managers playing favorites, protecting turf, driving good talent out, not holding team members accountable and the list goes on.
Let’s face it: managers are necessary to keep C- and D-Players in compliance. Their job is to fill the gaps, take on the load that someone else isn’t doing, herd cats, and complain when Bob doesn’t do what he should already know how to do.
For flat organizations like adhesive, the commitment loop (negotiating, making and keeping commitments) is even more important since there are no managers to fill that accountability void. Commitments must be asked for and kept between all members of the organization. There are no silos to hide in. There’s never a reason why you can’t ask for a commitment from someone else in an entirely different department.
Ultimately, our endeavor in creating and evolving a flat organization at adhesive is still a work in progress. We don’t have all of the answers yet, but we keep updating our blog with learnings and new data that we think are worth sharing.
That said, if you’ve made a breakthrough in your own company or found a new nugget of process wisdom, we would love to hear about! Send us your own stories and ideas, and we’d love to post them to our website. Our goal is to get the word out about the benefits of creating a flat organization, whether the ideas are our own or from folks like you, so please feel free to share this post and our free eBook to the far corners of your network as we continue to democratize the concept.