The Org Chart Is Dead

The billion dollar opportunity that no one sees

Aaron Dignan
Feb 27, 2016 · 6 min read
The first modern org chart, designed by Daniel McCallum and drafted by G.H. Henshaw

If you work at an organization with more than a dozen people, you’ve probably got an org chart. And chances are, it’s tucked away in the recesses of your hard drive or file cabinet. How can it be that the org chart is so popular that almost every company in the world has one, and yet, it’s so unhelpful that we ignore it from the moment it’s created? And is there a bigger opportunity hiding beneath that asymmetry? To find out, we have to ask ourselves three fundamental questions:

  1. What is an org chart?
  2. Where did org charts come from?
  3. What is the future of the org chart?

What is an org chart?

Wikipedia says, “An organizational chart is a diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions.” I would offer that it shows the roles of an organization, how those roles relate to one another, the authority structure associated with those roles (who reports to who), and often, the individuals that fill those roles. If you imagine how that information might be represented, you could conjure up a lot of images in your head, but you’re probably just picturing this:

Software. Helping us think mechanistically since the 80s.

But of course, this is just one way to represent the information. The example above is a functional org chart — meaning that it divides the work of the organization into departments that operate as silos (at least according to the chart) from an authority standpoint. With a single change the chart above could also be a divisional org chart — meaning that each silo is a distinct division making and selling their own product or service.

In both examples, all decisions and disagreements flow upwards.

Interestingly, not that long ago we saw more creative manifestations of this information. For instance, the chart below from Walt Disney Studios reflects roles and departments, but focuses more on process than authority (although it’s clear that Walt has some outsized influence here).

1943 Org Chart from Walt Disney Studios

Regardless of the way the information is presented, all org charts have one thing in common: they are a snapshot in time… static.

Where did org charts come from?

The modern org chart came from the chaos created by the rapidly growing dynasties of the Industrial Age. The production power of industrial technologies created the ability to serve a national customer base, which in turn meant organizations grew larger and more unwieldy than ever before. Railroads — network businesses long before Uber and Airbnb — grew so large that it became virtually impossible to know who was doing what where. Worse, with no phones or email, there was no real-time way for these people to collaborate or align around a strategy. Data from the telegraph was flowing up, but one leader at the top simply couldn’t coordinate the effort alone. So, layers of management were introduced, and with them came organizational complexity.

The idea to document these relationships was overdue. But it wasn’t really a new concept. Large groups of people throughout history — from the Romans to the Egyptians — have committed to paper, papyrus, or stone a representation of their hierarchy. The difference now was the level of detail and individualization present in the chart.

The railroads were some of the first organizations to visualize their structure in this way, starting with the New York & Erie Railroad in 1855. Their chart, featured above this article’s headline was as beautiful and artistic as any to come after it, but more than a little difficult to read. Indeed, 62 years later, the company that would become IBM had started to perfect the pyramidal hierarchy we’ve come to know and love (or hate). From there, it wasn’t long until every business school in the country was teaching from the same paradigm — the functional or divisional org chart, made of boxes and lines.

The Tabulating Machine Co. (aka IBM) as of 1917

What is the future of the org chart?

The problem with the not-so-modern org chart is that it presupposes that people generally hold one role, have one boss, and that both of those states are semi-permanent, at least in-so-far as the chart is worth printing and distributing.

And yet, since its mainstream adoption nearly 100 years ago, what has changed? Everything. Business is dramatically faster, more dynamic, and more complex. The simple hierarchy has been replaced with a functional matrix where each employee can expect to have several bosses at the same time.

Office Space, 1999.

Our contention at The Ready is that the future of work will rely on self-organization, enabled by collaborative software like Slack and Ethereum. An empowered team of teams will carry out the important work of this century.

Even in a self-organized, decentralized, collaborative, and high-trust future (in fact, especially in that future), people will need to navigate their organization. Data will need to flow transparently and fluidly across the network. Roles and projects will need to be created, filled, and disbanded with increasing frequency. New employees will need a window into their organization’s current structure (however loose or ephemeral), so that they too can influence it and move toward its purpose. Now more than ever, we need the org chart to step up.

There’s a billion dollar opportunity in giving us what the org chart promised but never delivered. If Facebook is the social graph, we need an equally elegant solution to the organizational graph. This tool would be a living, breathing org chart — a dynamic network — combined with what I’m calling “GitHub for organizations.” What roles exist inside our companies? What rules? What policies? Who has authority? Even if the answer is “everybody” (heck, especially if it’s everybody) we need to know. We need a tool that helps us change those things, edit those things, and share those things inside and outside our companies— easily or automatically. Imagine if you could take your world-changing maternity/paternity policy and share it with a friend’s company with one click, like a developer sharing code on GitHub. Now imagine millions of companies sharing what’s working for them, seamlessly.

In five years a new employee is going to walk in for her first day, sit down in front of a screen (or HUD) and say, “Alexa, show me the org, how it’s changed in the last 6 months, how it works, and where I can help.” And then the screen (and her eyes) are going to light up.

Investor? If you are interested in joining a syndicate to fund exploration in this area, reach out to us using tools[at]

Did you know that I recently finished a new book all about how organizations can change the way they operate? If you’re interested in the future of work movement, the work we do at The Ready, or simply how to make your own organization better, then you should definitely order your copy of Brave New Work today.

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The Ready

Lessons from our quest to change how the world works. Topics include org design, self-organization, and dynamic teaming.

Aaron Dignan

Written by

Founder @theready, investor, friend to misfit toys. Author of upcoming book on self-organization and transformation:

The Ready

The Ready

Lessons from our quest to change how the world works. Topics include org design, self-organization, and dynamic teaming.

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