We can bust bureaucracy but not hierarchy
‘Hierarchy is not to blame for our problems…Hierarchy has not had its day. Hierarchy never did have its day.’
Elliot Jaques, from ‘In Praise of Hierarchy’, Harvard Business Review, 1990
Organizational agility is easily conflated with ‘flat’ organization structures in which hierarchy is eliminated or minimized, and power is more evenly shared. There are widely differing views on this subject in the academic and business world.
In this post I will share a few thoughts on the issue of how much hierarchy is desirable in an organization.
On the one hand, the layers of management – the structural hierarchy – allow for increasing levels of job complexity, experience, and leadership accountability. This has many benefits, which might include effective ways of managing risk, as well as developing people gradually, promoting them to levels of seniority as they build their competence.
The alternative philosophy would be that in an agile, technology-enabled business that encourages flexibility, an organization is just a loose network of skills and capabilities. People can be allocated to various tasks or projects on a situational basis to work in temporary project teams. There may be some very loose hierarchy to manage these projects effectively. However, even this will be determined by the challenge at hand, not static or fixed.
This possibly moves closer to the model that some digital start-ups and newer boutique consulting firms adopt. In reality, I have not seen an organization yet which has completely dismantled all hierarchy successfully. Even those companies which one might assume to be the most customer or client centric, to have 'flattened' their structures in order to speed up their response to customers' needs, tend to have deeply embedded informal disparities in the way power and control are distributed. This isn't necessarily always a bad thing.
By way of example, consulting firms can be very responsive to clients and agile in the way they operate. The majority of consulting firms are also naturally hierarchical, structurally and psychologically. The most successful consulting firms use their hierarchy well. They are internal markets for talent. People compete for the internal sponsors, clients and projects that will propel them up the consulting ladder ever closer to the holy grail of being a Partner. Or they can leave after gaining the training and experience that they want, to work in industry or to work independently in the gig economy, form a start-up, or do something completely different.
The consulting industry I inhabited earlier in my own career was deeply hierarchical in every imaginable way, both formally and informally, in the subtle symbols and rituals through which Partners exerted their authority. And yet, it was also a great environment in which to learn because I was constantly thrown in at the deep end of a project, and expected to survive and lead the way for clients. At the same time, there was a great deal that I learned through being coached on the job, and vicariously, by observing more experienced people.
There is inefficient, ineffective and at times harmful use of hierarchy in all sectors. However, my strong hypothesis is that contrary to how organizational agility can be perceived, an agile organization still does not set out to eradicate hierarchy but uses it well. Hierarchy and bureaucracy are not synonymous.
Agility requires the use of hierarchy as minimally and optimally as possible. The intent is to ensure decisions are made in the right ways, and to maximise speed and responsiveness. What that looks like in practice at each stage in the lifecycle of a business is not something which can be easily prescribed. This is consistent with the notion of the ’requisite organization’ espoused by Elliot Jaques, an early and influential psychoanalyst and psychologist, and then further developed into a model for healthy organizations by Brian Dive twenty years ago. It is very unlikely now that Jacques’ or Dive’s theories are entirely fit for a digital era. Nevertheless, in principle, we cannot ignore their arguments or ongoing evidence, that many or most organizations depend on a healthy use of hierarchy, and probably always will.
Perhaps counter-intuitively, good examples of evidence-based and agile use of hierarchy to distribute decision-making authority and power to the right places at the right times, can be found in an 'old-economy' example - the grocery retail sector. Grocery retail must be highly disciplined, very fast-moving, and responsive to changing market conditions.
Grocery retailers are heavily regulated, and they require strong quality control across their retail channels. Tesco, or Waitrose, in the UK, or the French food retailer, Carrefour, are structured in a way that creates clarity around decision-making accountability at different organizational levels. Managers at store level, and frontline teams, are ‘empowered’ to make decisions within a clearly defined framework which ensures maximum efficiency, product availability, and a degree of freedom in the way local consumers' needs are met. Over the last two years, many food retailers have stood out in their agility in the face of a global pandemic. They have responded in creative ways to optimise their digital channels and delivery services, while ensuring abundant food supply.
The way that power manifests, and hierarchy is used are likely to evolve, partly due to generational shifts. In a digital economy, hierarchies are likely to move from a means to achieving control or functional specialism towards being a way to stimulate and sustain quality, adaptability, and innovation. With or without the aid of an organization chart, even in organizations claiming the absence of any hierarchy, there will very likely still be some hierarchy in one form or another. A political undercurrent – and therefore power dynamics - are very likely to be experienced to differing degrees in any organization, indeed in any human social group.
Hierarchy is in this sense quite natural and inevitable amongst people even if its extent, and how it shows up, differ hugely across cultures, and situations. People learn by working alongside and being coached by those with the right knowledge. Those who build up valuable skills, knowledge and connections are therefore always likely to have some degree of power vested in them in any system, whether they seek it or not.
There are proponents of leaderless organizations, ‘flat’ structures, or ‘inverted pyramids’, or structures that resemble a 'lattice' or a 'mesh' (or perhaps a 'mush'?) - a common line taken by consultancies and leadership gurus. Their suggestion is that hierarchy is somehow intrinsically unhelpful or obsolete in today's world, that we need to do away with it in the interests of democratizing the workplace.
However, my hunch is that organizations have designed and then used hierarchies in ineffective ways which can undermine agility, not that hierarchy is always a bad thing. A well-designed hierarchy with clear and healthy boundaries can actually enable adaptability - or 'self-organizing' capacity - at a local level. Sucessful global retailers are a case in point.
Delayering or restructuring efforts which focus on improving agility by reducing hierarchy must be handled with pragmatism, care, and cultural sensitivity, not with ideology and an axe. When we're removing fat, it is all to easy to cut into the muscle.
To what extent do you think your organization can and should eliminate or radically reduce hierarchy? How might you use hierarchy more efficiently and effectively?
See also -
Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and leadership. US: John Wiley & Sons.
Dive, B. (2002). The Healthy Organization: A revolutionary approach to people and management. London, UK: Kogan Page.
Jaques, E. (1998). Requisite organization: a total system for effective managerial organization and managerial leadership for the 21st century (Rev. 2nd ed.). Arlington, VA: Cason Hall.
Robertson, B.J. (2007). Organization at the leading edge: Introducing holacracy. Integral Leadership Review, 7(3). Available at http://integralleadershipreview.com/5328-feature-article-organization-at-the-leading-edge-introducing-holacracy-evolving-organization/.
My books are available on Amazon:
Strive: Unlocking agility and unleashing talent in a digital world
Change Agility: Leadership, transformation, and the pursuit of purpose