Organizations have for decades been founded and grown upon highly rigid structures. These have bred working environments with so-called ‘castle leaders’ at the top, imposing their power on those beneath them. But today, things are changing, and the age-old, top-down system of hierarchical management designed by the U.S. military is quickly becoming obsolete.
This is an idea that you naturally may not feel overly comfortable with. We have, after all, developed as a species alongside hierarchies. Social hierarchies have existed since the dawn of the earliest human civilizations, and have stood strong all the way through to the industrial revolution and the digital world we currently find ourselves living in.
What is an Organizational Hierarchy?
An organizational hierarchy, sometimes referred to as a “chain of command”, is an organizational system where instructions or information are passed down from somebody in a senior position to others occupying subordinate positions—for example, from an executive or a manager to supervisors and regular staff.
An organizational hierarchy tells employees in no uncertain terms who they should report to and when they should consult their supervisor or another manager for things like making decisions concerning projects and passing on information. An org chart, or organogram, is typically used to illustrate an organizational hierarchy—and, indeed, most organizational structures—and the lines of authority that flow within.
In a traditional organizational hierarchy, a single person sits at the top. This is usually a chairperson or Chief Executive Officer (CEO) who is responsible, overall, for the organization. You’ll usually find other C-level executives immediately below this person, with other high-level managerial roles below them.
As you move down the hierarchy, autonomy and decision-making power gradually fade. This top-heavy method for organizing power and decision-making assumes that each level of the organization is subordinate to the one above it, and that’s the level to which it reports.
Whether you love them or hate them, however, it’s hard to ignore the growing irrelevance of organizational hierarchies.
The Death of the Organizational Hierarchy
The tech industry is largely to, for want of a better word, “blame” for this. Long a catalyst for workplace transformation, big players within the tech space have been switching up their business structures for years, experimenting with flatter and more decentralised alternatives, with much success.
Add in the fact that tech start-ups nowadays also start out with flat and decentralized structures, and you’ve got the position we’re in today—more organizations outside the tech space are seeing how well these structures have worked in practice, and they’re taking note.
To understand why this has happened, you only need to look at the drawbacks of traditional organizational hierarchies. They simply don’t fit in with modern ways of working, thinking, and innovating. The nature of a hierarchical structure places the decision-makers, or the “thinkers”, at the top and entry-level “doers” at the bottom. You can think of it as a pyramid. This has the effect of a situation where the frontline “doers” have the knowledge and the context but none of the decision-making power to act; this is held by the “thinkers” at the top.
Although this can work for some organizations where information and communication flow freely and openly, this doesn’t always happen. Therefore, in organizational hierarchies, there’s usually a dividing line between these two groups, and this can lead to a wide range of problems and challenges.
This is becoming increasingly obvious, and companies that are stuck in the past with outdated, inefficient leadership structures will quickly find themselves losing out to the competition as employees flee for something better. In the post-pandemic world, as we’ve seen with the so-called ‘Great Resignation’ the best talent won’t wait around for employers that don’t create a positive working environment.
The New Era of Decentralized Orgs
These and other factors have led to a growth in the number of organizations opting to use decentralized org structures—a good example being the flat structure—whereby organizational decision-making is taken away from top executives and distributed among lower-level management and, in some cases, individual teams.
Silicon Valley has led the way here, with a new and more humble approach toward business which has influenced organizations worldwide. The humble leaders of these decentralized pioneers illustrated to everyone else how important it is for a leader to be prepared to take a step back and learn rather than imposing themselves on their subordinates for the sake of exercising power.
Leaders like this enable their teams to fulfil their own creative potential, express themselves, exercise initiative, and innovate without constraint or fear of repercussion. Respect, trust, openness, and the free exchange of ideas are the name of the game here—Silicon Valley’s bread and butter.
Breaking Down Hierarchical Barriers
As the world and attitudes to work continue to progress and modernise, it’s going to become more important for organizations to adapt if they want to survive. To become more adaptable, you need to create an environment where adaptability can occur, and this starts with creating the right ecosystem. Some of the key ways to do so and begin breaking down outdated hierarchical barriers include:
Trimming Down Layers
Less is more, as the saying goes. A decentralized, flatter organization has fewer layers of middle management, enabling employees to be powered and enabled by their bosses rather than micromanaged and unnecessarily controlled.
Focusing on Your Teams
Decentralized organizations tend to focus more on teams, with managerial responsibilities being dispersed among cross-functional teams. This type of team-focused organization helps to aid problem-solving, increases agility, and speeds everything up. It’s not unheard of for certain key teams to operate directly below executives.
Democratizing Information and Knowledge
In a traditional organizational hierarchy, a lot of information is locked away. However, equal access to information and resources helps all employees make the best and most informed decisions and is one of the core features of decentralization. As responsibility in a decentralized organization is spread more thinly, leaders must ensure that every employee has the right tools to work efficiently.