GETTING BETTER AT FLATTER : a guide to shaping and leading organizations with less hierarchy

When should organizations think about adopting a flat structure? And what does it take to make it work? Is it even the silver bullet that we’ve been told it is? Often we have heard about how businesses should organize in non-traditional ways to succeed in today’s world: be ‘agile’, or adopt approaches such as ‘holacracy,’ ‘RenDanHeYi’ or ‘scrum’. But what do these concepts actually mean? Are they even helping us to custom-tailor flat structures to our needs? Leading expert, Markus Reitzig, provides a no-holds barred account of flat organizational structures, taking the good with the bad and asking the reader to balance the opportunities and challenges that come with less hierarchical structures. He explains that there are many types of flat organizations, and that they may only be better than traditional companies in some instances, and only when the company picks the right structure given its goal and its people. Taking an evidence-based approach to the advantages and disadvantages of decentralizing, this book offers a unique, practical guide for managers. You’ll learn how to formulate realistic goals with fewer hierarchical layers, where to decentralize, whom to recruit and how to treat your staff. This is an indispensable guide for anyone who wants to figure out how to work with flat organizational structures, and whether ‘flat’ may even be right for them. Preface and Acknowledgments 5 Praise for Get Better at Flatter 8 Contents 11 List of Figures 13 List of Tables 15 Introduction 16 Why Read this Book? 17 What the Book Does for You Exactly 19 How to Read This Book 20 Bibliography 21 Part I: Why Flat Structures Work at All 22 1: What Does It Mean to Move Toward a “Flatter” Structure? 23 Bibliography 37 2: What Managers Can Effectively and Efficiently Delegate 39 The Fundamental Problems of Organizing—The 4+1 Framework 40 Task Division 40 Task Allocation 41 Rewards Distribution 41 Information Exchange 42 (Where) Does Self-organization Work Effectively? 43 (Where) Does High Delegation Save Managerial Time? 46 Bibliography 60 3: Why Would Employees Ever Assume Extra Work in a Decentralized Organization? 63 How Exactly Autonomy Motivates Staff—Nailing the Psychological Mechanisms 64 Why and to What End Does Quasi-decentralization Motivate Employees? A Conceptual Map 67 Appendix 73 Bibliography 79 Part II: What Managers Can Do to Make Flat Structures Work Well 81 4: What Type of Persons Should You Take on the Journey? 82 Who Is Truly Willing to Embark on a Journey Toward More Decentralization? 83 Extraordinarily Motivated by Autonomy 84 Willing to Put Up with the Costs 86 And Who Is Capable (Enough)? 89 So, What’s the Practical Takeaway in Terms of Who We Should Bring to the New Structure? 91 Bibliography 96 5: How to Enforce and Foster Effective Self-organization? 98 Preventing the Breakdown of the Flat Structure 99 Ensuring Collaboration among Existing Staff in a Quasi-decentralized Structure 99 Providing Support 101 Access to Information 101 Psychological “Empowerment” 104 The Important Takeaways 106 Bibliography 109 6: How to Design the Playing Field for Efficient Quasi-decentralization? 111 Reducing Costs of Task Division and Allocation Through Modularization 112 Slack as a Means to Allow for Frictionless Autonomous Rewards Distribution 114 Structured Processes in Exception Management—Voting, Lateral Authority, and Arbitration 116 The Important Takeaways 118 Bibliography 119 Part III: When, Why, and How Flat Structures Can Beat Traditional Hierarchies 121 7: When Can Flat Structures Beat More Centralized Structures? 122 A Yardstick for Comparing the Effectiveness of Flat and More Centralized Structures 123 The Flat Advantage—When to Delegate Why, Where, and How Much 124 Finding Innovative Solutions to Business Problems 125 Increasing Speed to Market 127 Attracting and Retaining Talent 128 What to Take Away 130 Bibliography 134 8: Where Does a Flat Structure Reach its Limits? 137 Information Costs in (Quasi-)Decentralized and Centralized Structures 138 Information-Gathering Performance as a Function of Group Size 140 Information Assessment Performance as a Function of Group Size 142 Taking Action on Information 143 Additional Thoughts—Rethinking Hierarchical Structures 143 What to Take Away 147 Bibliography 149 9: The Guide(s) to Successful Decentralizing 151 Delayering to Become More Creative—When You Seek Ideas to Roll Out across the Company 153 Delayering to Become Faster—When Speed Depends on Finding Local Solutions Fast 153 Delayering to Retain and Attract Talent 159 Growing in a Flat Way 162 Takeaways and Outlook 166 Bibliography 168 Part IV: Test Your Understanding 169 10: Delayering the Hierarchical Firm: The Case of Borek 170 Part A: 1893 Until 2018 in Fast Motion 170 Why Reorganize in the First Place? 171 Part B: from 2018 Until Today 172 How Far Down Can We Go in Delegating Decision-Making Power? 172 How to Give Teams the Rights to Make Design Decisions Within the Scope of Their Projects? 172 On the Scope of Delegation to Operating Teams 173 Provide Managerial Guidance, Autonomy Support, and a Suitable Playing Field for Self-organized Work 173 Signs of Increased Motivations Through Autonomy: Self-determination, Control, Engagement, and Attachment 174 Changes in Behavior and Personality Traits Shining Through 175 Challenges Along the Way 176 Outcomes So Far and Opportunities Ahead 176 11: Flat Growth: The Case of wirDesign 178 Part A: 1982 Through 2021—Flat Back Then, and Flat Today 178 wirDesign’s Organizational Design During the Early Days 179 The People Behind the Early wirDesign 180 Success and Growth 180 Part B: What Happened in Between... 181 From 1982 to 1987 181 From 1987 to 1992 182 From 1991 to 1992 in Detail 183 From 1999 Through 2001/2002 183 From 2002 to 2010 184 From 2010 Through 2015 185 From 2015 to Today 185 Flat Growth? 186 12: Flat Fads or More? From a as in “agile” to z as in “zi zhu jing ying ti” ... 188 A Potpourri of Applied Approaches to Nontraditional Organizing—Why Did They Come About at All? 189 Why They Were Created in the First Place 190 Agile 190 Scrum 190 DAOs 191 Holacracy 191 RenDanHeYi 191 What They Actually Provide to Users 192 Agile 192 Scrum 193 DAOs 194 Holacracy 194 RenDanHeYi 195 Mapping the Approaches onto the Thinking Underlying and Developed in this Book 195 So What’s Really New? 196 How Would We Classify the Above Approaches? 198 Agile 198 Scrum 199 DAOs 199 Holacracy 201 RenDanHeYi 201 Important Takeaways 204 Concluding Remarks 205 Bibliography 207 Glossary 209 Bibliography 212 Index 214