I recently had a conversation with a leader in a large technology company that transitioned to a flat organizational structure (and threw out the org chart) in order to create a hierarchy-free environment that would eliminate titles, reduce bureaucracy, and improve efficiency. He lamented that instead, the transition has created a dysfunctional environment stemming from unclear roles and responsibilities, poor accountability, and minimal unity of purpose. He likened it to a little league soccer game where all of the kids swarm to the ball and create a slow-moving scrum while losing sight of the goal.

Google tried a similar experiment in 2009 called Project Oxygen, which was intended to eliminate company hierarchy by proving that managers don’t matter. However, their research proved the opposite — that good managers actually perform a vital role in providing clear vision and strategic direction, creating cohesion and unity of purpose, advising the team on how to achieve their goals, and coaching team members in their professional development.

The fact that many organizations are currently considering a similar transition to a flatter structure due to downsizing pressures, employee demands for more autonomy, and other cultural considerations raises an important question: Is flatter better?

Research suggests the answer is yes and no. Organizations that are more operationally flat yet retain a functional reporting hierarchy are able to synergistically combine agility and accountability to create better performance outcomes. This allows them to respond quickly to changing conditions, while still ensuring that all employees embrace their functional roles and responsibilities.

When thinking about how to optimize this balance, here are three principles to consider:

1. Structure your organization around functional core competencies that are aligned with your strategic objectives

First, identify what functional core competencies are needed to achieve your strategic objectives. Then organize your administrative reporting structure around these competencies, and develop a plan to ensure you have the experience and expertise necessary to be fully competent in each function. Finally, hold functional leads accountable for the development and performance of their respective team members.

2. Create cross-functional teams that are task-organized around your operational goals

Once you’ve functionalized your organizational structure, next determine what operational initiatives must be prioritized to achieve your strategic objectives. Then identify what functional expertise is needed to drive the operational initiatives forward and create cross-functional teams with designated leaders to achieve your operational goals. Finally, maintain organizational agility by constantly evaluating when new cross-functional teams need to be created and which ones can stand down based on changes in your operating environment.

3. Cascade empowered execution throughout your organization by establishing clear roles, responsibilities, and decision authorities

One of the top causes of a dysfunctional team is unclear roles and responsibilities. To prevent this, empower those in functional and cross-functional leadership roles to execute toward your operational goals by clearly articulating your strategic vision, crystallizing their specific responsibilities and decision authorities in support of that vision, and decentralizing control of how the goals should be achieved, as well as the decisions they have the authority to make. As General Patton said, “Don’t tell people how to do things, tell them what to do and let them surprise you with their results.” Then provide your leaders the resources they need to accomplish their assigned goals, and reward them with the recognition they deserve when they achieve them.

Conclusion

When it comes to organizational structure, balance is better than flat. To create a high-performing organization that is both agile and accountable, build it around functional core competencies to establish accountability, and task-organize cross-functionally around operational priorities to create agility. By combining these two design approaches synergistically and empowering your leaders to execute, you’ll prevent your team from swarming the ball and enable them to adaptably perform with precision, speed, and eyes on the goal.

Sources

Introduction

• OliverWyman: Organizational Agility
• Forbes: The Nature of Leadership in a Flat Organization

Section 1

• Harvard Business Review: Design Your Organization to Match Your Strategy
• International Atomic Energy Agency: The Competency Framework

Section 2

• Harvard Business Review: 75% of Cross-Functional Teams are Dysfunctional

Section 3

• Harvard Business Review: Who Has the D?: How Clear Decision Roles Enhance Organizational Performance
• General Stanley McChrystal: Team of Teams: New Rules of Engagement for a Complex World
• Patrick Lencioni: The Five Dysfunctions of a Team