8. Primary Research
Methodology
To obtain an inner vision on this topic, primary research was conducted in the form of interviews with employees that considered themselves as working in flat organisations or being part of a self-managed team. Leaders that implemented a flat structure in their company and field researchers were also interviewed to gain multiple angled insights.
The interviewee was a person who believed they work(ed) or implement(ed) a system with self-managed teams whereby the presence of one or more of the following points were present
- Organisational structure with low or minimum hierarchy levels;
- Company with mixed structures (eg: hierarchical structure but with flat groups);
- Leader as a coach and not a decision-maker;
This section will support the work with an industry point of view and actual experience within flat structures. Since the flat organisation is employee-centred, it is important to have this vision and not only base the outcomes on a secondary research.
Interviewee’s background
Employees
LA — works in a remote flat company in the UK
KS — works in one of the biggest technology companies, and is based Asia (it is a hierarchical company but his team works in a flat structure)
RE — works in a flat company in the UK
EC — works in a flat company in the US
Leader
GL — implemented a flat structure in his previous company (UK).
Researchers
DW — Democracy at work (UK)
GK — Cooperative organisation (Latin America)
Primary Research Outcomes
Advice before starting the process
GL implemented a flat structure in his previous hierarchical company and gave valuable advice for businesses that want to switch from a hierarchical system to a flat structure “If you haven’t started a transformation process you can decide not start, but once you started you can’t stop”. This is because all the people involved engage with the change and turning back can cause an irreversible impact on the company. At the same time, he thinks that companies should start the process of implementing a flat structure. “In the case of flat structures, you don’t have a choice about starting. You have to start, otherwise, sooner or later competitors will catch you.”
When asked about why a flat structure seems to works better than a hierarchical system, GL said that the pyramid with the king on the top and everybody else below does not fit the talent-knowledge based economy and it was necessary to go for a different path. A flat structure is the most efficient way to build a company around talent. Consider what the employees want to achieve and what they think is the best way to switch from a hierarchical system to a flat structure should be primordial in the process. In GL’s opinion, this is the best way to design a flat system since it is through individuals.
Holacracy on the other hand, first thinks about company structure and the need to find people to fit it. The structure is established regardless of the company’s employees opinions. For him, “Culture [created with the individuals] eats strategy and structure for breakfast.”
Challenges
Challenges when implementing a flat structure
One of the most challenging steps to switch from a hierarchical system to a flat structure according to GL, is to change behaviours in order to remove the traditional mindset. The difficult part of changing people’s habits is that it can be seen as a threat to people’s self-identity and challenging the very fundamental self.
GL thinks that leaders are the most resistant stakeholder to embrace the change process inside the company. Considering a structure with less or no levels of hierarchy, senior managers should be seen and treated the same way as everybody else within the enterprise. “Taking away the privileges of the senior guys was hard. But if you have worked for 25 years in the industry to get on the top it can be quite hard to give up on the privileges.”
The individual decision-making process can be another challenge for people to adopt. Since individuals have to make decisions by themselves and they were not used to do it before, GL said that people still want confirmation or validation that they are taking the right action on the early stages. One of the methods used by the leader was to ”test and develop people to become self-sufficient enough to make their own decisions, judgments and get their needs mapped as often as possible within the team so that they could do the best work”. Another initiative was to encourage people to talk to each other to have other perspectives.
The only time GL interfered in the process was when an employee requested to spend a significant amount of resources on a task and if the individual would permanently damage company or personal development. Sometimes not giving advice that would influence people’s decisions — even in these scenarios — helped people to fail and learn with their mistakes. After the failure, GL always asked “What is the lesson that we are going to learn from that” encouraging people to share their learnings with the group.
Challenges of working with a flat structure
One optimal value that was commonly observed in some of the interviewee’s flat companies was that all the voices should be heard, but sometimes this can have one of the most challenging consequences when working in a flat structure. “Sometimes there are so many voices going around that it takes much longer to make a decision, especially when half of the team disagree. It’s like an endless loop” said LA.
Another mentioned challenge was the lack of supervision and direct management if compared to a self-managed system. According to RE “obviously you will have less supervision when you are doing your work [compared to a hierarchical system] so if you start something wrong, you are more likely to go wrong for a longer period than if you are more closely supervised”.
At the same time, self-management was seen as a challenge for one of the employees, it was seen as one of the best benefits of a flat structure according to LA. “[being self-managed] helps you to, first of all, do things you like because nobody is telling you what to do and I think that is the best benefit but also learning how to be more responsible and in a way disciplined”.
Communication was pointed as the biggest challenge to KS. Since his team is formed by people in different locations in Asia, the communication can be “chaotic”. The bad communication can make people work on the same project, and the consequence of this is duplicate work. Communication is a problem that is already being addressed by his team, and they are thinking about a new structure. The solution would be a place where people can present the ideas among each other to centralise the communication.
Since LA’s company started as a remote team and all the members work in different locations, they already notice the importance of the communication between the team “being remote it’s all about being transparent and trusting because you can’t see what other people are doing. That is why they have to communicate and say what they are working on regularly”.
KS also commented that he feels a lack of mentorship in his team. He compared his situation to a hierarchical structure where the leader is responsible for the employee’s mentorship and coaching. He would like to have someone that could teach him “how to do project management or do self-negotiation or any skills that the job might require”. When you have a flat structure people focus on their tasks and lose the ability to help others out in a proactive way. “everyone at every level would be happy to have a mentor for career discussion or worries, It’s always good to have someone giving you guidance and perspectives” .
For EC, one of the challenges of working in a flat structure is that some companies say they are flat, but in practice they work in a hierarchical system. For instance, in one of her past experiences in company that was supposed to be flat, she experienced a CEO that tried to manage everyone. In her opinion, the problem was that the CEO himself did not really understand the meaning of a flat structure.
EC thinks that companies that implement a flat system need to deeply understand what a flat organisation and respect the “rules”. She also believes that it is a process that needs a lot of effort and senior leaders have to want to participate into the process and she does not see that alignment in her current job.
Another challenge highlighted by EC is that sometimes ego can be a big barrier in flat companies. The main reason is because people need to listen to others, independent on the level. Moreover, EC thinks that another problem that can be related with ego is that her company is not diverse in terms of gender. She believed that due to gender inequalities in the workplace, many men did not listen to the points certain females raised. Diversity for her is essential in flat structures and if it is not celebrated, a functioning flat structure is not possible.
Benefits of working in a flat structure
All of the interviewees prefer to work in a flat structure when compared to previous experiences at hierarchical companies. Even with the challenges that they highlighted, the advantages of working in flat structures were more important. The benefits of working in a flat structure are listed below:
Self-awareness and Self-development
According to LA, working in a flat structure allow people to understand themselves better. People can understand their strengths and what they enjoy doing. This is only possible because a flat organisation creates an environment that encourages people to discover their potential. For instance, challenging people to develop and manage their own time and tasks.
Transparency and Trust
LA’s company provide weekly status on the financial situation and employees can access the data at any time. For her, this is crucial since the company’s transparency creates trust between the team members. “I would say that both [trust and transparency] are extremely important but the impact of having a whole team trusting you actually builds your self-confidence and it’s just a great thing to have”. Another example of transparency is how the salaries are formulated “as a team member you make a salary proposal and you have to justify it somehow to the team…you write in google docs what your expectation is and then the team can read and if they don’t any objections they don’t do anything. If they have, they need to bring it up and say why and the person who made the proposal”
Less Competition and More friendly
Hierarchical systems can be related to competitive environments for the employees. This is because the vertical system stimulates people always to desire to go one step further until they achieve the top levels of the pyramid. Whereas competition can be seen as good for business (Forbes.com, 2016), for RE one of the advantages of a flat structure is the feeling of a less competitive environment. “I would always prefer to work in a flat structure because I would not like the feeling of competition between me and other people, people who maybe would want to fight with me to get my position”.
Bureaucracy
Flat structures are seen as less bureaucratic, with fewer levels of “power”, decisions can be taken faster. According to GK, “the flatter the company, the more efficient and the more innovative the company is. That is why all the start-ups and technology companies are adapting their structures, trying to implement a flat structure. Why? Because in a vertical system, you need to ask ten levels of people for approval to test something new. A flat structure is much faster and efficient”
Motivation
GK thinks that in the flat organisation’s people have more ownership of the company which is directly related to being more motivated if compared to a hierarchical system. “If you feel that the company belongs to you in a way, you engage more and you become more efficient. If it’s your company, you will put more effort. Your interest will be higher compared to a company that doesn’t belong to you. It’s like the company’s speech of saying that the employees should wear the company’s T-shirt. You will never feel owner if the only one that is making a profit is the one in the top.”
For LA, having access to the financial data on her company helps everyone to understand better what is happening and to have more ownership of the business which contributes to motivating and to stimulate people to be more proactive when they see a problem. “Having that information can be a bit scary because when things go bad you know, but then when you see it, everybody is motivated to improve things. We say “ok, we need to change this and that” and it’s a team effort and it’s not a surprise”.
Collaboration and Knowledge Sharing
Cooperation in the workplace can be described when “one individual contributes time, information, or other resources to assist another person, trusting that the favour will be approximately returned at some future time. Norms of reciprocity often make it likely that the favour will, in fact be returned, even when it is not in the economic interest of the recipient of the favour to return it” (Luft, 2016). To RE, flat structures stimulate collaboration between the co-workers because of the less competitive environment. “You are more cooperative because you are not trying to keep things for yourself to drive personal gain”.
Everyone is seen as equal and Open environment
EC thinks that one of the advantages of a flat structure — when implemented in the right way — is an open environment, where people care about what you think and feel and truly value your ideas. Additionally, the biggest advantage for her is that people are seen as equal and all the voices are taken in consideration. EC stated that “if you do it right [flat structure] everyone is seen as the same important […] It is very important to see that everyone has value and everyone is heard. That is one of the biggest advantages to me”.
Leadership
Leadership was the main topic that most interviewees expressed different opinions. Since flat structures imply a less vertical system and leadership is most of the times related with subordination, leadership was seen by some interviewees as something negative and that can go against the values that flat structures should have. On the other hand, leadership was recognised by other respondents as necessary in a flat structure but with a different role when compared to a hierarchical system. Leadership in that sense could be seen as a coaching system or a facilitator role instead of a decision-maker agent.
Structures without any leader were approved and encouraged by one of the interviewees who was also a researcher in the field. DW argued that by having a leader in the structure, even as a coaching role is directly related to the dependency of the members on someone else which is the same thing that happens in a hierarchical system. An external leader, on the other hand, was something seen as positive. “What always end up happening is that a coach is a coach forever, they will never give that up. Not only because they want the power but because other people look at him as a coach. They will always go for them “how should we decide this”, “what is the tool”, “how do we look at this […] that is why an external coach can work really well […] If you have a coach in a team, that person would be there forever […] always a magnet for questions, solutions, etc.”
DW was also against fixed structures such as Holacracy because knowing how to implement a structure implies that one person may covertly retain more power. According to him, Holacracy is an example of a bureaucratised and rigid system in which the individual who knows the process may become the most powerful. Power arises because “anything they say about how things are going or how they should be done or who should talk next it is instinctive that is the right thing to do.In any situation you haven’t defined the rules by yourself, the person who knows the rules is the most powerful person in the room. It just happens, it’s human.”
The other interviewed researcher (GK), considers it important to have a leader in the structure at least at the beginning of the process’ implementation. He argues that after some time working in flat structures, teams can start to understand more how to be self-managed and then, the leader’s role is no more needed. At that point, leaders should be extinct from the structure since the team would be able to execute the leader’s tasks without mentorship. Based on the researcher’s opinion, the leader’s role is also different from traditional structures “The leader needs to have responsibilities but more related with aligning the team’s goals and individual’s maintenance. They need to guarantee that the group’s values are being executed and that people have space to participate. In the beginning, their presence should be strong but with the time the best case scenario is that their role is becoming unnecessary [the group can be managed without a leader.”
RE thinks that if there is any formal leader in the structure, a leader will arise naturally but since this role was not previously aligned with the team, it can cause relationship clashes within the group. “If there are no defined roles, sometimes there will be people that will try to elevate themselves into a position that is non-flat […] they will take that role [as a leader] because there is no role set up for that […] this can cause problems such as relationship between the employees. If no one said formally that a person should be a leader, other people that are in the company for a longer time can start to question themselves why this person is in charge and not themselves, once they are more senior”. In alignment with this thought, EC stated “I don’t agree with democracy as a whole, I think that people naturally gravitates towards a leader […] and I don’t know if having no leader whatsoever is always a good thing.”
KS and RE do not have a leader as a coach in their structure. As a consequence, they feel the lack of mentorship and being a self-managed employee as challenging. There are leaders at KS’s team, but they are only responsible for defining the strategy and not to support employees to improve their self-manager skills — even that employees are responsible for setting their KPIs and taking important business decisions. RE struggle with the same problem since there are no leaders to support with the self-managing challenges.
In LA’s company, everyone is officially on the same level, where all are referred to as “designers”. The company has an owner, but he has no more power that anyone else in the team, even that he is seen as a someone with more experience. “The founder of the company doesn’t like to be referred as a boss but he is still seen as somebody that has a lot of experience and because of that, we often turn to him when it comes to something a bit more complicated and we know that he has a lot of experience which makes more sense to ask for his advice […] many times he says “this is what I think” but you have to make your own decision”. According to LA, the owner can be considered as a coach.
LA also added that even that he is seen as someone with influence — his opinion counts a lot because he has more experience — more people in the team are taking responsibility of coaching and supporting the team so the team is not dependent on him. “He has that role, but I think it’s a role that more and more people will get in the team. Especially if he travels, for example, or if he takes a break. It doesn’t mean everything needs to fall apart because he is not there. We should be able to learn from him and take over.
