Why the business world is moving to flatter, more agile organisations.

Flat organisational structures are the flavour of the day, but when it goes wrong, it can lead to diminishing responsibility and lower overall productivity.

However, when executed correctly, they provide a more dynamic, flexible, and less structured company that can unlock additional value.

While many organisations still use a hierarchical model, COVID has introduced a new wave of flat organisations that see the benefits of increased autonomy and speed.

The change is also partly a response to the changing nature of work, with more freelance and remote workers and an increasingly global workforce.

Flat organisations share some key characteristics. Below is an excerpt from an article by Bernard Marr & Co (https://bernardmarr.com) which explains them well.

Collaboration. In a flatter organisational structure, departmental boundaries are eliminated, and teams collaborate freely on projects that pursue the organisation’s strategic goals and solve its most significant business challenges. This may even involve pulling in external contractors as and when needed.

Teams. Teams are generally smaller. Amazon even has a term for this, referring to this as “two-pizza teams”, where it only takes two pizzas to feed the entire team. When teams need to scale up, they work together and combine resources to achieve larger goals.

Autonomy. Project teams work to specific requirements and goals, but they have the freedom to decide for themselves the best way to complete the project and deliver those goals. As a result, there is little or no middle management layer required to supervise employees – employees can interact directly with senior managers and executives.

Communication. Because there are fewer departmental boundaries, communication flows more quickly and freely across the organisation. Instant messaging apps are frequently used to ensure everyone in the business can communicate with everyone else.

Flexibility. In a flatter organisation, careers are flexible and dynamic. Remote work is common. Employees may even “float” from project to project and team to team, choosing which projects to work on based on their skills and interests rather than remaining in one defined role.

Decision making. Employees have more decision-making power and can proactively decide what needs doing and how, in order to achieve the organisation’s goals. For more strategic decisions, managers and executives may collaborate with employees to make decisions or at least solicit their feedback. Employees feel heard.

Speed and innovation. Because decisions happen fast, flatter organisations can innovate more quickly. Innovation is essential, and flatter organisations are often willing to self-cannibalise their most successful products rather than risk standing still and being overtaken by the competition.

McKinsey (https://www.mckinsey.com) presents the agile organisational structure as a living organism.

Agile is not just for technology teams. In agile organisations, the concepts apply to all departments, with smaller teams that flatten the structure and minimise layers of management. This flat structure encourages positive management practices, where managers are there to empower and enable their teams, not micromanage them. This accelerates decision-making, where the manager’s main role is to ensure their team knows what they need to do and keep them on track.

Employees are encouraged to voice opinions and get involved in ideation, not just execution. Successfully transitioning to an agile structure will require a cultural shift from a hierarchical organisation (where historically, lines of management safeguarded information and discouraged direct lines of communication throughout the layers).

An agile, flat organisational structure can only work with confident and strong leadership. Leaders must have well-defined objectives, clear strategic planning, and excellent resource allocation abilities and tools to measure productivity and results.

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