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Money and Wealth

The Benefits of a Flat Organizational Structure and How to Make the Switch

Rhea Ong Yiu

Traditional hierarchical structures aren’t cutting it in most companies, which is why flat organization is becoming more popular in the business world. With a flat organizational structure focused on human-centric leadership, you can prioritize adaptability, empowerment, and open communication within your team. As a result, you’ll reap a number of benefits, including increased innovation and revenue.

Our company is a flat organization, but don’t assume it’s one-dimensional. Like all businesses offering truly flat organizational structures, it’s incredibly complex and constantly evolving. Those qualities are what make it nimble — although it might seem strange and unconventional to those unfamiliar with the concepts of operational flatness and human-centric leadership.

Fortunately, we’re not the only business that’s found success in running a flat company instead of a tall one. Accenture findings from 2019 revealed that around 8% of leaders had already adopted flat-friendly mentalities, and more than four out of five said they planned to do so by the end of this year.

What is causing this trend in moving away from traditional hierarchical setups? When leaders understand and see the benefits of flat organizational arrangements versus tall ones, they’re more open to considering flat structures. At the same time, they realize the value of human-centric leadership models in an increasingly diverse, volatile world.

Advantages of Human-Centric Leadership and Going Flat

Human-centric leadership doesn’t have to be difficult to implement. It simply involves a willingness to unleash the potential of every human in a company. For instance, leaders focused on the human experience at work create protected spaces so individuals can freely express their feelings, needs, goals, and challenges. At the same time, they tend to concentrate on achieving both individual and collective impact, growth, and innovation.

It’s easy to see that the only way to achieve success as a human-centric leader is to embrace something other than a tall organizational arrangement. Tall organization companies are simply too siloed and slow. Though the organizational style works well for establishing daily tasks, it doesn’t offer the necessary sparks to fuel nimbleness, accountability, entrepreneurial thinking, and fast action.

This is where flat organization companies excel. Because flat organization prioritizes collaborative interaction and purpose realization over strict protocols, team members can adapt rapidly. An employee doesn’t have to wade through bureaucratic bottlenecks to get approval to implement a new initiative. Instead, the employee feels empowered to make choices that push the corporation’s overarching goals forward.

As we’ve seen, the end result of full-fledged flatness is a high degree of co-creation, trust, and inclusion and an equally high amount of leanness thanks to lowered operating costs. The aforementioned Accenture research supports our findings. Accenture found that a human-centered approach correlated with an average 22% revenue growth over three years.

How to Join the Ranks of Flat Organization Companies

When it comes to becoming flat and engaging in human-centric leadership, you can expect to take a holistic approach. Applying the following strategies will help your team make the evolutionary leap with more intuition and less friction:

  1. Align all activities with overarching goals.
    When everyone in your company knows your purpose-driven North Star, they can move toward it. This ensures alignment. It also enables decentralized decision-making, more autonomy, and increased accountability without fear of retribution.

    If you haven’t defined your purpose, now is the time to start. That way, you can build a human-centered organization where everything converges at the intersection of the leadership, customer, and employee experience.

  2. Model empathy and vulnerability.
    You can’t be a human-centric leader without the soft skills of being able to empathize and remain open. The more you show your “human” side to your colleagues, the more psychological safety you’ll foster, and the more likely your employees will show up ready to give their best work.

    Begin by listening to the people around you — from coworkers and clients to vendors and other stakeholders. Aim for deeper dialogues that allow for different perspectives, biases, and circumstances. Additionally, emphasize the learning potential of setbacks through constructive feedback and constant reflection based on openness, not control.

  3. Invest in healthier, equalized relationships.
    Strong hierarchies are unnecessary in flat structures. To thrive, you need robust networks that encourage people to leverage each other’s strengths. In other words, favor abundance over scarcity; you’ll net a real impact.

    Here’s an example of how we do this at our company: We have moved away from job descriptions to roles, such as “strategic pathfinders.” People can share roles, which creates guardrails for execution. They also can find “sparring partners” to play advisory roles. There’s no need for authority figures since everyone is authorized to react.

  4. Allow innovation to flourish.
    Employees and leaders who view challenges as fertile ground for ideas aren’t afraid of different perspectives or hurdles. On the contrary, they become fastidious about exploring out-of-the-box solutions.

    As part of your human-centric leadership strategy, encourage experimentation and hypothesis validation. Help your team learn to identify needs, fail rapidly, and move on. Let go of the need for permission; that’ll only hold you back.

Flat organization companies are well-positioned to stand out in today’s disruptive marketplace.

If the culture of your business isn’t two steps ahead of the capability curve, consider flattening your structure. You might be surprised at just how beneficial it can be.

Written by Rhea Ong Yiu.
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CEOWORLD magazine - Latest - Money and Wealth - The Benefits of a Flat Organizational Structure and How to Make the Switch
Rhea Ong Yiu
Rhea Ong Yiu is a partner and management consultant at LIVEsciences, an experienced consulting startup with the vision to catalyze the success of its customers. She’s a synergy igniter, community builder, and real enabler.

Rhea Ong Yiu is an opinion columnist for the CEOWORLD magazine. Connect with her through LinkedIn.