Companies that scrap management tiers tend to find that getting rid of a formal pecking order results in informal hierarchies taking hold instead
Vice-presidents, area supervisors and other department heads were once the corporate machine’s central cogs. Now such middle managers are derided as pound-shops, there largely to organise and attend pointless meetings. A few modish startups bill themselves as having no administrative tiers at all, leaving independent employees flitting between tasks as they see fit. Such holacracy, as it is dubbed, clearly won’t do for a Unilever or Goldman Sachs.
Several factors contributed to the “flattening” trend. Businesses discovered that having lots of mini-barons could lead to stultifying silos. New ways of working—starting with modern technology—mean that executives can manage more subordinates, including some far away. Add enough direct reports to each supervisor, and the number of rungs between the chief executive and the graduate trainee shrinks accordingly.
Clearly there are limits to how far one can go. Not every Tesla factory hand is going to seek their annual appraisal from Mr Musk. In fact any amount of delayering hacks away at what it means for an employee to be part of a company. The key corollary—indeed the enabling factor—of flat organisations is for each employee to have less boss. That will sound appealing to some workers.
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