Build Your Business Faster Flatter

‍"We hire highly educated, trained people, and then we put them in these environments with rules and procedures and eight layers of hierarchy. Then we wonder why big companies are so lame most of the time." – Bill Anderson, CEO, Bayer.

Legacy layered hierarchies, mimicking the military, enabled the construction of mass manufacturing plants. Traditional growth adds layers, managers have narrow spans of control, units are siloed.

"We need to do some bureaucracy busting" – Bill Anderson, CEO of 90k+ "#TeamBayer" employees.

Today, digitalized businesses integrating AI need flexible, dynamic growth frameworks and strategies. Fixed isn’t flexible, layers aren’t lean, and (rigid) structure isn’t speedy.

Your ecosystem and digitalized operations are distributed and interconnected. You need to make quick decisions close to the frontline and respond rapidly to changing customer demands.

STAYING FLAT as you scale to maintain agility requires an intentional digital-first approach, empowering employees and decentralizing decision-making:

• Large agile organizations should have less than six layers, truly agile ones often have only three [McKinsey].
• More employee “self-direction” increases agility, learning velocity, and resilience [HBR];
• Expanded accountability for managers often increases ratios to 1:30 [BCG];
• Semi-independent corporate incubator units drive innovation and growth [bundl].

“I’m probably the least powerful person in Spotify and I probably make the least amount of decisions in Spotify.” Daniel Ek, CEO, Spotify.

FASTER FLATTER strategies depend on what suits your business, growth paths, and workforce. These companies prioritize flat and decentralized organizational structures using different models and scaling methods:

Flat organizations in non-tech heavy sectors include:

• ​Bayer: a pharmaceutics conglomerate with a Dynamic Shared Ownership model to “reduce hierarchies, eliminate bureaucracy, streamline structures," and speed up decision-making.
• ​W.L. Gore & Associates: a multinational manufacturer has a flat lattice structure with an inventive approach focused on discovery and product innovation.
• ​Morning Star: a global tomato processor uses a self-management model with a collaborative culture. Employees use a system of self-governance and mutual agreements.
• ​Buurtzorg: a Dutch healthcare company where nurses operate in self-managing teams, tech-supported self-monitoring performance. Regional coaches promote best practices.

Issues to uncover: Are your managers overseeing fewer than 5-8 direct reports? Can new teams form without bureaucracy? Do leaders act as facilitators or gatekeepers? Are decisions bottle-necked at specific layers? How many approvals are needed for frontline decisions? Do employees feel informed about strategic priorities? Are roles defined by outcomes or rigid job descriptions?

Immediate actions:

• Build Trust – Nurture trust as the foundation and glue. Train leaders to coach not control. Example: 3M’s “15% Rule” lets employees pursue passion projects without oversight.
• Delayer Management – Expand each manager’s number of direct reports. Remove redundant tiers such as merging current/future Senior Manager and Director roles. Organize teams around missions. Example: Spotify limits layers using tribes and squads.
• Decentralize Decisions – Define decisions--e.g. budget approvals and hiring--at the team level to streamline approvals and improve responsiveness. Example: GitLab’s TeamOps principles and tenets.
• Increase Transparency – Centralize documentation to reduce hierarchical gatekeeping. Use collaboration tools to enable horizontal information flow. Example: Atlassian’s public playbook.
• Rework Jobs/Careers – Enable non-manager careers as individual contributors to retain talent without adding layers. Deemphasize titles to focus on skills and tasks. Example: Whirlpool scrapped job titles to match employees to one of four leadership roles.
• Reward Outcomes: Focus on results by setting clear goals, empowering teams to organize projects enabled by recognition, continuous feedback and iteration. Example: Zappos’ employees set their own goals fostering sustainable, self-driven progress.

“In many ways, we are organized by output. This way we can ensure that responsibilities don’t overlap. We also ensure every division has a clear priority.” – The GitLab Handbook.

🗞️ Flattening the Curve: The Rise of Flat Organizations by Faster Capital.

📕 Maverick by Ricardo Semler how flexibility works in manufacturing cos.

📹 Why FUTURE SHOCK?! A video about futurists Alvin and Heidi Toffler.

🎶 Work by Alessio Cappelli – I love techno. High energy music to work to?!

If you are interested to get tips and takeaways tailored to your specific company, business issues, workforce and growth dilemmas, I offer targeted individual executive coaching for leaders focused on scaling through change. To book one of the limited slots, click here.

Keep tuned in for regular data insights and modern work tips from the field.

See you next week!

Sophie