Flat Structures - Really?!

As Managers, what is our job? Once, many years ago, when I was promoted into a senior management role, my then boss informed me that “I didn’t have to ‘do’ anything”. It took me some time to realise what he meant. He didn’t, of course, mean that I sat around, drank coffee and read the papers all day! There were things to ‘do’ – but more in the sense of taking the lead, of helping others to 'do the ‘do’'.

At the end of the day, a Manager’s job is to create an environment which maximises what can be delivered from those components (people, money, capital items etc.) for which he is accountable, however it is appropriate to measure that delivery: profit, service, quality... Which is fair enough, isn’t it?

But often there are other criteria that, whilst we may not realise it at the time, cut completely across that ‘enabler’ ambition and can critically compromise what we can contribute – and therefore, most likely, what others can contribute too. Take the notion of the “flat hierarchy”.

Logically very sound: not too much management; clear line-of-sight between ‘top’ and ‘bottom’; people feeling ‘more connected’ somehow; less bureaucracy, and so on. But in practice?

If you accept the Manager’s role as an enabler, then this means that he or she has to have the time and capacity to help their team: to mentor; to suggest; to coach. Essentially, through the distribution of their experience and expertise, they must enhance what their direct reports can achieve. It fits with the maximisation of the delivery of the 'components' they have at their disposal. If we compromise that, then surely what a manager can contribute is diminished somehow – and if he or she gives less to their team, then those next down the line already start at a disadvantage…

So let's assume we have a flat structure with 111 people and just three layers, top-to-bottom. To achieve this, every one of the eleven managers (the top man and his immediate team) needs ten direct reports to create that organisation.

Perhaps you are one of those managers, and that you are lucky enough to work just a 40 hour week. Depending on your role, you may spend 50% of your week on projects, initiatives, administration. Then there will be the meetings you have to attend outside of your function or team, perhaps with customers, or Finance, or HR. Say another 15%. Then there’s that unplanable ‘stuff’ that crops up (usually from email!) that takes away another 10%.

Where does that leave us? 75% gone, 25% left. That’s just 10 hours in a week to share with your direct reports. If you have ten of them, that's just one hour per person, per week. Is that enough to help them, their teams; to mentor, suggest, and coach? Really? Not only are you stretched as an individual, your people don't start with the full boost you could be giving them.

There is a 'multiplier effect' at work here too. From the top manager to the middle management layer, and then - with those 'middle managers' being at less than 100% effective - down to the real 'doers' in the team.

But what happens if the 111 team has four layers? Then each manager might have just four or five direct reports. Suddenly those free 10 hours per week now gives you around 2 hours for each of your direct reports. If your input is of value (and you would hope it would be!) then all your people should benefit accordingly.

It would take a scientific study to prove the point, but I would be confident that the overall measurable loss of 'effective input' or productivity cascading downwards from management layers would be greater with the former case - two layers only, ten direct reports per manager - than with the second - three layers, more managers, but only four or five direct reports per manager.

You might object that in the 'fatter' organisation, there is a greater level of man management admin and/or non-productive time from a greater percentage of the 111 team (i.e. 21 'managers' vs. 11 'managers'). This ignores the greater effective loss from the flat organisation as suggested above. Also, the truth is that there is no reduction in man management admin delivered by the flat structure: for example, appraisals for all 110 people don’t just go away. They still have to be carried out, and with fewer people to execute them, those eleven managers can only be less effective in this area - and their output of poorer quality.

And it is worse than that of course. In the flat structure, bottom to top needs only 2 promotions – which effectively means that the top 11 positions are ‘blockers’, and the remaining 100 people are looking upwards, seeing no possibility of progression and advancement – unless of course you make the ratio of middle managers to the top guy maybe 1 to 12…

And don't forget, the extra time for managers offered in the deeper structure will more likely be ‘quality’ time. And the “dead man’s shoes” scenario in the second organisation isn’t quite so prevalent.

Are you working in an organisation that's 'too flat'? Of course, you can go too far the other way. A 111 team with six levels of management would clearly be inefficient. There is a reason that 'best practice' suggests the optimal number of direct reports for any manager is between four and seven.

In any event, don’t assume that a flat structure is a good structure; it may not always be the case…

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About the author / copyright

Ian Gouge is widely experienced in business-driven Information Technology, culminating in significant achievements majoring on organisational and process change, and with a proven track record in turning around / re-engineering IT functions. He possesses in-depth experience of change, transformation, IT delivery, customer and supplier engagement, and broad International exposure. Also the author of management books on the topics of IT Strategy and Project Management, the impact on IT of e-Business, and the IT Organisation.

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