Mireia Las Heras, a professor, and José Pérez del Valle, a research assistant, at IESE Business School, explained that the traditional corporate hierarchy is facing a reckoning.
Writing for Forbes, they said that in 2024, so many companies eliminated middle managers, leading to the coining of the phrase “the great unbossing.”
It’s important to acknowledge that self-managed companies, often referred to as “flat” because of their lack of hierarchy, are not new. They have been gaining momentum recently, partly due to economic difficulties. By eliminating middle managers, these firms can cut costs since those positions are paid more than lower-ranking employees.
Other firms, however, become flat (or flatter) for more mission-driven motivations, thus creating “a more egalitarian, flexible and fair” work structure where workers gain increased autonomy while feeling a sense of belonging.
However, implementing a flat model is not a one-size-fits-all approach. The specifics of how that structure is established will depend on the firm’s individual needs, the authors explain. It does not always mean going “full flat,” either. Firms can be anywhere between a traditional hierarchy and no hierarchy at all—a firm doesn’t need to be a “flat” firm to have flat characteristics.
After months of researching self-managed organizations, both authors compiled five tips to make companies flatter or less hierarchical without undergoing a complete transition.
Foster transparency. Transparency is vital for a flat organization to work efficiently. it is essential to ensure employees make well-informed decisions, which they will have to do more frequently given that they take part in making major decisions for the firm. This includes hiring new workers, evaluating colleagues, negotiating salaries and integrating new recruits into the firm. In this situation, transparency means that information must be disseminated timely and efficiently across the whole company instead the traditional way of staying in the hands of senior leaders. Relevant data has to be available to all workers since they need it to make important decisions.
Cultivate healthy communication. A flat organization requires, and simultaneously, encourages open communication. Since workers are not limited by the barriers of hierarchy, they are more inclined to share ideas, collaborate across teams and offer feedback to their coworkers. They also seek information more enthusiastically and more frequently since it’s key to making crucial decisions. This reflects the “flat” aspect of these work models with the equal standing that the workers in the organization have. While a culture of open communication can be more challenging, people feel comfortable sharing their ideas even if they do not agree with their colleagues. To mitigate disagreement among employees, flat organizations usually uphold non-violent communication methods or hire consultants to assist in conflict resolution training.
Delegate decision-making to teams. In flat organizations, responsibility is shifted away from senior leaders and delegated to individual teams of workers who are closest to the task. The idea behind this structure is that every position is important with each team working independently but coordinates with each other to make sure that their projects are aligned. This offers workers more autonomy in their work while making them fully responsible for their goals. By delegating authority to teams, companies limit bottlenecks in the decision-making process and boosts efficiency and commitment. This system eliminates the concept that senior leaders are the most experienced and smartest parts of the firm and shines a spotlight on the nuance of workplace dynamics. Additionally, this approach can make employees feel more connected to task outcomes, enhancing organizational morale and engagement.
Rethink the hiring process. Hiring people who fit a firm’s culture is top priority, but it is even more key for flat organizations, which have very distinct work structures. With fewer management layers, each hire has a more direct effect on the workplace dynamics and the ebb and flow of tasks.
Create a culture of purpose. For some firms, adopting a flat structure goes beyond efficiency. Conscious capitalism refers to the idea that companies must go beyond profit-making and consider the well-being of stakeholders, workers and the society. Defining a purpose beyond the firm’s bottom-line is an important move. Additionally, workers are usually more engaged in their work and incentivized around the organization’s goals if they feel that what they do has a greater impact on the overall structure. Fostering a sense of purpose can encourage productivity as it lets employees align their personal aspirations with the firm’s goals.