Total Business Magazine

Are Hierarchies Still Necessary in the Workplace?

Most employees value clear direction from leaders, but they also value autonomy. In our modern, fast-moving world, the most successful organisations are those who are agile enough to adapt to changing circumstances with speed and focus. Hierarchical, command-and-control structures simply do not support these ways of working.

Dr Simon Hayward, author of The Agile Leader, is an Honorary Professor at Alliance Manchester Business School and CEO of Cirrus. Here he explains to Total Business why there is no longer a place for hierarchies in businesses.

For many digital native organisations such as Airbnb and Spotify, agile ways of working are very much the norm. However, for large, long-established organisations, achieving this can be quite a challenge. They are likely to be used to hierarchical structures, more traditional management practices, and legacy systems and processes – all of which can be barriers to agility.

Although this way of working requires discipline, it also requires very high levels of openness. Truly agile leaders set a clear framework and are skilled at devolving decision-making responsibility within agreed parameters, so they empower people, and they are also very clear about what those people need to achieve. They enable others to make things happen.

As organisations grow, they tend to introduce more processes and systems to coordinate the disparate parts of the body. As time goes by, this set of rules and procedures can become more complex, with more regulation and control adding extra layers to the labyrinth of bureaucracy. Eventually this becomes an industry in its own right, requiring an army to manage and maintain the rules and procedures. This all slows down the organisation, restricting pace and entrepreneurial flair.

Risk aversion is one of the biggest barriers to success in a digital age. An aversion to risk is one of the main reasons that layers of hierarchical decision-making build up. This slows organisations down and stops them adapting, innovating and evolving.

The need for simplification is clear, but the challenge is immense because the system is difficult to change. It requires leaders to take a brutal look at the organisation and get everyone to challenge every rule and process to see how it can be stripped back, pruned to within an inch of its life, so that you reduce the burden of bureaucracy and ensure process simplicity.

When researching my latest book, I talked to several organisations about how they have adopted less hierarchical structures in order to develop more agile ways of working.

Three UK has defined and embedded agility, customer centricity and collaboration as core behaviours. Together, these three behaviours give Three a competitive edge. The organisation has adopted a flatter, less hierarchical structure to support more customer-centred ways of working. This gives everyone a clear line of sight to the customer. It also means that decision making can happen closer to the customer, where it has greatest impact.

Haymarket Media Group has reduced hierarchy in order to encourage team working. Like many businesses today, Haymarket has transformed its office environment to help make this happen.  The walls have come down and open, collaborative workspaces are now the norm. Working environments are designed to encourage creativity, with social hubs and break-out areas. 70% of employees don’t have a permanent desk. There is a focus on output rather than hours worked. This represents a radical shift away from previous working practices and has helped to demonstrate to colleagues across the business that the company is committed to change.

In recent years, Shop Direct, the home of Littlewoods and Very, has transformed from a catalogue company into one of the UK’s leading digital retailers. Leaders in the business have very deliberately flattened hierarchy and removed silos in order to create a more agile organisation which thrives on change and collaboration.  Colleagues work cross-functionally. This has created a leaner, more responsive organisation, better able to adapt and pivot.

I have seen from my research that agile leaders creates a climate of trust. People are trusted to do the right thing and to take risks without the threat of punishment. Experimentation is encouraged and learning from failure is celebrated.

I have observed real business transformation when leaders have broken the status quo of hierarchical decision making, overcome a focus on optimising rather than innovating, and enabled more self-managing teams. These changes typically lead to more innovative, customer-focused, high-performing organisations.

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