Do we still need hierarchies in the workplace?

There is an antidote to over-complexity inside organisations, says Dr Simon Hayward, but it requires brave and unusual leadership

Most employees value clear direction from leaders, but they also value autonomy. In our modern, fast-moving world, the most successful organisations are those who are agile enough to adapt to changing circumstances with speed and focus. Hierarchical, command-and-control structures simply do not support these ways of working.  

For many digital native organisations such as Airbnb and Spotify, agile ways of working are very much the norm. However, for large, long-established organisations, achieving this can be quite a challenge. They are likely to be used to hierarchical structures, more traditional management practices, and legacy systems and processes – all of which can be barriers to agility.

Although this way of working requires discipline, it also requires very high levels of openness. Truly agile leaders set a clear framework and are skilled at devolving decision-making responsibility within agreed parameters, so they empower people and are also very clear about what those people need to achieve. They enable others to make things happen.

As organisations grow, they tend to introduce more processes and systems to coordinate the disparate parts of the body. As time goes by, this set of rules and procedures tends to become more complex, with more regulation and control adding extra layers to the labyrinth of bureaucracy. Eventually this becomes an industry in its own right, requiring an army to manage and maintain the rules and procedures. This all slows down the organisation, restricting pace and entrepreneurial flair. 

The need for simplification is clear, but the challenge is immense because the system is difficult to change. It requires leaders to take a brutal look at the organisation and get everyone to challenge every rule and process to see how it can be stripped back, pruned to within an inch of its life, so you reduce the burden of bureaucracy and ensure process simplicity. 

When researching my latest book, I talked to several organisations about how they have adopted less hierarchical structures in order to develop more agile ways of working.

Three UK has defined and embedded agility, customer centricity and collaboration as core behaviours. Together, these three behaviours give Three a competitive edge. The organisation has adopted a flatter, less hierarchical structure to support more customer-centred ways of working. This gives everyone a clear line of sight to the customer. It also means decision-making can happen closer to the customer, where it has greatest impact. 

Another large organisation we’ve worked with has reduced hierarchy in order to encourage team-working. Like many businesses today, the company has transformed its office environment to help make this happen. The walls have come down and open, collaborative workspaces are now the norm. Working environments are designed to encourage creativity, with social hubs and break-out areas. Seventy per cent of employees don’t have a permanent desk. There is a focus on output rather than hours worked. This represents a radical shift away from previous working practices and has helped to demonstrate to colleagues across the business the company is committed to change.

I have seen from my research that agile leaders create a climate of trust. People are trusted to do the right thing and take risks without the threat of punishment. Leaders are also good at letting go. I have observed real business transformation when leaders have broken the status quo of hierarchical decision-making, overcome a focus on optimising rather than innovating, and celebrated learning from failure. These changes typically lead to more innovative, customer-focused, high-performing organisations. 

Dr Simon Hayward is author of The Agile Leader, an honorary professor at Alliance Manchester Business School and CEO of Cirrus