Imploding CRT photographed with high speed air-gap flash. c 2012 Niels Noordhoek (CC BY-SA 3.0) Via Wikimedia Commons

Why Flat Organization Implodes

E. Forrest Christian Organizations Leave a Comment

As Mark Nichols describes in “Flat Will Kill You, Eventually: Why Every Company Needs Structure“, flat seems like such a great idea when we start out. It works so well and things go so smoothly.

Then everything slides downhill on a runaway shopping cart into hell of recrimination, anger and mistrust.

What in the world just happened? Why did the Great White Flat become the Giant Ticking Timebomb?

Part of this is simply the issue of Maturity of Your Management Culture. According to the work of systems theory expert / psychiatrist / organizational guru / biotech entrepreneur / thinker, the management culture must mature through a set pattern. If you’ve been in a startup, you recognize the first stage: Pure Pragmatism. It’s all about “Get it done! Now!” Everyone is doing anything. In these places a hierarchy of any sort is pretty stupid.

And this pragmatic culture is exactly what Mark Nichols describes for FLow. Everything was just getting things done.

As time progresses, and you’re lucky enough that your hard work pays off, your company starts differentiating roles. Suddenly you feel you need someone who will be dedicated to doing this or that function. You start differentiating the roles of the company. Kinston called this the “Structuralist” phase because it is dominated by the Structuralist decision-making style. To get work done, we first have to make sure that we have everyone doing the right jobs.

This differentiating by job role is natural for any business, and maybe for any organization.

Kinston isn’t someone who is just a theorist. He saw this in his own work as a consultant to industry and government (including the UK National Health Service). He also saw it in the two Australian biotech companies he started. These were, he saw, necessary steps.

This isn’t the end, either. At least not if you’re fortunate to be able to continue to mature your management culture. Kinston saw that there were several more phases that you could progress through. Each one had a dominant style of making decisions coming to the fore.

You won’t see the end of “flat” organizing, either. If you continue to mature your management culture — which is no mean feat — you will come to a place where having fewer titles and more concentration on individuals will seem natural, the way that it should be. By that time you will have matured through several stages, with a very strong management culture. Many things will not need to be explicit in organizational structures because they have become the background assumptions of how things should be. As Nichols pointed out, they are very hard to dislodge.

You can grow out of this, too. I recommend Warren’s book, Strengthening the Management Culture, which you can get (free!) from his website for THEE Online. I also do a class on the 7 decision making styles and how they work in business.

Stated vs. Extant

Nichols also points out that when you have a flat organization, you don’t eliminate power hierarchies: they’re just not explicit. Social researcher Elliott Jaques called this the extant organization, the hierarchy which really exists versus the manifest organization, what you see on the organization chart. You can say all day long that you have a flat organization but when I come in and see how power is laid out, it usually has a particular structure to it.

This is similar to Chris Argyris’s ideas of an organization’s or group’s theory in use versus their espoused theory. Theory in use is how you really act, what you really use to understand the world and react. It’s normally hidden, even to you. Your “espoused theory” is the one that you use to explain your actions. This usually pretty easy to see in others, and almost impossible to see in ourselves.

The problem with flat structures is you don’t get rid of power hierarchies. As empowerment and community guru Peter Block points out, “Bosses have power over subordinates, and if you mask it you make it even more powerful.” Eliminating the “manager” title doesn’t eliminate power games. It simply makes it hidden and insidious.

Not that regular organizations aren’t masking power, too. As Jaques, Argyris and many others regularly discovered at their clients, the org chart rarely matches the underlying reality. Power politics continue to get played.

Jaques believed that there were natural structures based on adding value to the work being done below. I added that where there were no structures and you could enforce a “no assholes” rule, people would gravitate to those who add value to their work, giving them context. If people could self-organize, they would gravitate to the leaders who could give them these things. You would find yourself with a natural hierarchy of Value-Adding, instead of power.

This natural hierarchy is actually a form of network. It allows certain types of information to flow up and down, across and diagonally. This is not a static hierarchy. It constantly changes as people grow in their capability to unpack complexity. At some point this crosses a threshold, and they require a new type of thinking to provide them with context.

Unfortunately this also doesn’t recognize the importance of power. Sooner or later, those with top jobs will create shadow systems to aggregate more power and resources into their own hands, to perpetuate their power and earnings regardless of performance.

Strong Culture First

Companies that are strong advocates of self-organizing work not only attract people who agree with them. They also attract psychopaths.

The problem is that self-organizing advocates rarely understand the high need for a strong culture that will discover and destroy the psychopaths. Almost none of them have this. You find it in many pre-agricultural societies. They are strongly egalitarian. But the accumulation of wealth destroys egalitarian values and cultural power.

A truly republican culture may let you self-organize because it would provide you with the cultural subtext that you need to control man’s baser instincts. But not necessarily: the Kings Mountain massacre by the American “patriots” of the American “loyalists” comes to mind. The Patriot commanders put together a deadly self-organized killing force, the militia of Scots-Irish “over the mountain” men. The problem was that the commanders couldn’t get their troops to stop killing when the Loyalists tried to surrender. They were high-performing but ungoverned.

If you don’t have a strong culture already in place before you start the organization, your flat organization allows psychopaths to flourish. When everyone works out in the open, it’s psychopaths who are willing to break the rules and hide effort or lack of it. They are willing to construct fake data, build lies, and say that things are happening when they aren’t.

Traditional hierarchies aren’t any better. Because they become a game of “don’t hold me accountable”, where the higher you go the more you get out from under any form of accountability, they also attract psychopaths who can quickly climb the ladder.

Accountability and visibility help, but visibility has its own problems.

Working Out In The Open

Flat organizations usually advocate openness. The problem is that most people don’t want to always work out in the open. It also usually restricts productivity and improvements.

The famous example is a study done in a Japanese factory (if I have the story right). All the workers could see up and down the line. Everyone worked out in the open. Managers, who didn’t quite work out in the open — the common excuse of needing privacy for discussing personnel issues — loved the idea. Workers weren’t so keen.

A group of consultants came in, did some interviewing and believed that process improvement hinged on giving workers some privacy. Management took some convincing. They finally caved and allowed curtains to be installed around a couple of workgroups.

Turned out that these groups saw major productivity improvements. (No, it’s not the Hawthorne effect. Which is pretty much debunked, anyway.) The workers believed that they had more discretion to solve problems in novel ways, to use their God-given creativity to make work better.

Groups and persons like to figure things out on their own. They need to be able to create local solutions to problems, figuring things out within the boundaries of their work. Open organizations can prevent this.

Most people don’t believe this, so let me ask you a question: how well do you solve a novel problem when your boss is actually looking over your shoulder, reading your screen as you code?

When “openness” becomes a code-word for “micromanagement” productivity falls because all work is creative.

Imploding CRT photographed with high speed air-gap flash“. © 2012 Niels Noordhoek. CC BY-SA 3.0 Via Wikimedia Commons.

About the Author

Forrest Christian

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E. Forrest Christian is a consultant, coach, author, trainer and speaker at The Manasclerk Company who helps managers and experts find insight and solutions to what seem like insolvable problems. Cited for his "unique ability and insight" by his clients, Forrest has worked with people from almost every background, from artists to programmers to executives to global consultants. Forrest lives and works plain view of North Carolina's Mount Baker.  [contact]

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