Is ‘Career’ The Reason Why Employees Want To Work In Hierarchical Organizations?

It is the start of 2022 and by now you’d have to imagine that most practitioners of human resources, organizational development, business consulting and even scientific studies suggest that organizations with flatter structures and more horizontal movement are better performing than their traditional bureaucratic and hierarchical counterparts.?

We know that flattening organizations yields multiple benefits to both the company and its employees: better communication and information flow, faster decision-making, empowerment, more innovation, and even better productivity - and obviously quite some downsides if not implemented properly or only half-way.?

We also understand that there is a global trend of organizations shifting from hierarchical to flatter structures, even if some do it gradually or only adopt certain flat characteristics.?

So, why do companies persist with hierarchical structures, when evidence is mounting that this is no longer the way to go? Could employees be benefiting from the markers of vertical organizations, like clear progression paths or clarity and rigidity of roles and functions?

The Spectrum of Hierarchies

Before we try to answer that question, we should first clarify that there is a lot of gray area between the black and white of vertical and horizontal structures. Jacob Morgan, in this Forbes article , describes five different types of organizational structures. In between the rigid traditional hierarchy and boss-less holacracy that Morgan describes, there are organizations that can be more or less flat but that retain vertical characteristics.?

After all, flattening your organization can be as simple as opening up more lines of communication and collaboration between different employees and units, or allowing more innovative and fast-moving units to adopt flatter structures where their employees can make meaningful decisions more quickly.

Clearly, if many organizations are opting to blend the characteristics of vertical and horizontal organizations rather than going all-in on either side, there must be good reasons for employees and companies to prefer some amount of rigidity and hierarchy.?

One indicator of flat organizations is increased horizontal movement of employees. Like the shift to horizontal organizations, employee movement between teams and departments is an emerging trend.?

Working on different teams and filling in multiple roles can allow workers to develop a more varied skill set (e.g. t-shaped profile) and can help become more invested in the success of the company. Promoting more horizontal movement in a company can help employees find opportunities to grow in the future, while also saving companies money on training and hiring.?

The Challenge of Flatter Structures

With more and more companies adopting flatter hierarchies, employees are increasingly expected to move sideways and work in different capacities, rather than aim to climb the corporate ladder into executive management ranks.?

Of course, when companies reduce or eliminate managers and bosses, that could run the risk of obscuring workers’ paths of progression within the organization. Horizontal moves will help employees learn new skills, but they don’t necessarily come with increased responsibilities or better compensation packages - and certainly not with the traditional career we all know.?

While obviously worse at promoting, agile decision-making and empowering employees at the bottom of the ladders, vertical organizations do boast a clear path to progression for employees in regards to autonomy and accountability. Is this enough though?

One can also imagine that a sudden switch to a flat structure after a career spent following a rigid chain of command could lead to hesitancy when faced with newfound empowerment.?

Strategies for Adopting a Horizontal Structure with regards to ‘career’

If these factors lead to employees thinking twice before joining horizontal organizations, or to the organizations themselves preferring to stay mostly hierarchical, then we can present some solutions.

First, and as we observed many organizations are already doing, you don’t have to make a sudden switch to a holacracy (or the like), or insist upon adopting every characteristic of flat structures. Organizations can use the plethora of qualitative and quantitative data they possess to choose between horizontal and vertical characteristics .?

For example, it’s important to understand how much more difficult it can be to transition to horizontal structures the larger and more complex the organization is. In this case, it might be useful to single out specific departments or business units that would benefit the most and suffer the least from a change.?

In many cases, a hybrid system might make the most sense, and we can apply this line of thinking to the problem of employee progression and careers. While we established that flattening the hierarchy might lead to fewer clear career paths, organizations can certainly go horizontal without falling into this trap.?

Instead of maintaining the managerial system of vertical organizations, companies can flatten hierarchies while still using job titles to reflect employee seniority. Senior employees may not have anyone reporting directly to them, but with the right culture in place, these experienced members of the team can help mentor and coach less seasoned colleagues.

Another strategy is to use a hierarchical system only when human resources matters are involved. Job titles can be used to delineate compensation and seniority, while day to day operations ignore them completely, the teams are working role-based really, and interactions between coworkers determine who become mentors and leaders situationally. This way, you don’t completely lose the career track and functional salary levels of vertical structures.

One more option, and perhaps the most radical and truly holacratic, is to empower employees themselves to delineate their roles and responsibilities. This is part of what has made the California tomato processor Morning Star such an innovative and successful company. Gary Hamel and Michele Zanini, in their wonderful book Humanocracy: Creating Organizations as Amazing as the People Inside Them, discuss how Morning Star team members write contracts (so called ‘CLOU’s) with one another that identify their roles within the company. CLOUs are commitments they each give to one-another and also base their compensation on it.

As we have explored above, flat hierarchies offer the most promising opportunities for upskilling and empowering employees. But, not only is it challenging to make the shift from a traditional structure, team members may miss the benefits of clearly defined roles and paths of progression, especially if you look at ‘employability’ outside your own organisation. At the end, there’s not the one right system or solutions; It’s up to each organisation to find the best mix of different structures for them.