Hierarchy a phase-out model?

03/11/2020 2020/11

How do you lead?

Stiff models are obsolete, because what we need today are flexibility, courage and creative solution ideas. The one who pulls out the right method case from the drawer at the right time to ensure the continued existence of individual projects or entire companies is ahead of the pack. So is it still appropriate to distribute this pressure to find solutions or for the successful management of the company to a few individual managers or in some cases to leave it to the managing director alone? 

From a psychological point of view, it makes perfect sense to clearly define responsibility. Phenomena such as the diffusion of responsibility are also evident in the corporate context. Sociologists have found out in studies that tasks that are recognized or classified as necessary by employees are nevertheless not performed by them. Why? This is due to a missing link between their own role in the company and the task at hand. The sense of responsibility is therefore largely based on concrete attribution. Another reason is a hierarchically superior role, because this role always carries more responsibility, at least with regard to the position in the company. So why not also for all unloved tasks.

In addition to this phenomenon, it is especially complex and time-consuming processes, slow decision-making processes and a lack of flexibility that causes growing companies to question hierarchies. But what does this mean exactly? What distinguishes the "no hierarchy" approach from top-down or bottom-up management? Where are the possibilities and where are the limits?

If we are all leaders…

Imagine, all of a sudden, everyone is working at the same level, maybe even at the same eye level, everyone has the status of an employee or the other way around, everyone becomes a leader. This trend topic has already become reality in some organizations. It is commonly claimed that this only works in start-ups or IT companies. How does Daimler boss Dieter Zetsche's plan to build a swarm organization fit in with this assertion? As we know, the automobile manufacturer is neither a start-up nor a pure IT company. At the same time, Daimler has undertaken a reorientation that should lead to a changed structure and corporate culture - collective thinking instead of silo work. 

However, simply abolishing leadership or simply removing the level of middle management is not the right way to go about this. This vacuum leads to chaos, conflicts or even disorientation. Instead, the roles of managers can be redefined, patterns broken and ways of thinking changed. As part of the team, the former manager no longer has a controlling function; communication now takes place on the same level and not vertically. Daimler, too, has recognized that it is no longer about the career ladder, but rather about the sense and enjoyment of work, which is the main focus. For all other employees, this change means that their commitment in particular is just as important as their own initiative. They take on leadership as experts in a project team that was created for a specific customer request or an individual project. 

What the various approaches have in common is that there may be a basic set of rules. Guidelines, which regulate both the cooperation and decision-making situations or even how to deal with conflict situations. Every employee knows his or her role and area of responsibility, so it basically makes no difference who is acting in the team. Having reached this stage, who needs hierarchies?

The difference to Top-Down

Top-Down first describes the direction of action of processes. In the corporate context itself, this is often equated with a strict top-down hierarchy of instructions. Here the following applies: leadership takes the form of authority. Ideas about future strategies and goals are given by the superior so that process conformity or the provision of the necessary resources can be delegated downwards. Essential cornerstones of this management style are fast and effective decisions in line with the company's goals and objectives.

These include concrete process requirements, assignment of tasks and responsibilities, which should prevent distractions from the assigned work tasks. Employees are not expected to make independent decisions or set their own goals. Hierarchical companies, where decision chains play an important role because they must be retraced at all times, use this method. After all, regulation and standardization are still regarded as efficient, promising instruments for achieving goals.

Consequences of this approach are particularly evident in dynamic times. Even if there is a corresponding representation rule within the management floor, the structures and processes are strictly regulated and intervention in the area of another manager is viewed critically. Even if this could avoid a delay. Furthermore, employees are not authorized to give instructions, so important and company-relevant topics are left until the decision-maker is available again. As a result, speed is lost, competitors pass by or the new customer is immediately lost again. At the employee level, innovative ideas or proposed solutions have no place or are undesirable, even though they can provide constructive assistance during a new type of problem or expand the scope of action based on their experience. The leap from this system to self-organization or a company without hierarchies can only work through radical changes in structure, mindset and corporate culture. Similar to the way Daimler has initiated it, and addressed 17,000 employees alone to join this path, a committed mass of employees is needed to question and turn the previous approach upside down.

The difference to the bottom-up approach

The bottom-up model offers a different form of work design. In this model, the management encourages its employees to play an active role in shaping the company and processes. In this way, decision-making and directive powers are distributed throughout the company. In a mature form, employees set their own goals and milestones for work in coordination with the manager. The choice of methods and tools is left to the employees. The aim is to develop them into independent entrepreneurs within the company, who will advance projects themselves, develop creative and practical solutions and directly feel the principle of self-efficacy. Because success is based on their own contributions. With the experience, which effect the own work supplies for success, the efficiency of the entire team can be strengthened at the same time. This form of work also challenges the managers, because despite the fast pace of life, they must not take decisions from their employees or prescribe solutions. Their task in the role of mentor is to transfer the responsibility for finding solutions to the employee. This also and especially applies in stressful situations. In this way, employees learn to make self-confident and independent decisions during these times or when the manager is absent. In the future, modern employee management will decide on employer attractiveness, employee loyalty and the overall success of the company.

In contrast to the organization without hierarchy, managers can still have an effect here. They accompany and give security, especially in challenging times, employees have the feeling that they still have a back-up behind them. In addition, the sovereignty over feedback talks and salary negotiations remains in a central position. The bottom-up approach can be seen as an intermediate step towards the radical abolition of hierarchy. There is still room for further development to become a manager. At the same time, such difficult issues as transparency in salaries can be circumvented, as these are still regulated by the executive. The necessary change towards a customer-oriented, self-organized and flexible process landscape is still made more difficult by this intermediate level.

A requirement for the equality is a change in thinking

The change towards an organization without hierarchies not only requires a rethinking of collaboration, but also presents companies with completely new challenges in the area of employee management and team building. Former managers are rethinking and redefining their roles. Who am I without this status, what performance do I achieve in and for the company. The ability to control or give instructions is no longer sufficient without the mandate to do so. To win colleagues for a cause, empathy and appreciation of the strengths of team colleagues play a much greater role. The development of an organization without hierarchies begins with each individual. With the individual maturity for self-organization, reflection and flexibility, it is possible to react to dynamic requirements. In contrast, stability and routines slow down or even hinder the progress of the organization. Such an approach promotes the motivation of the individual employee and the development of a cooperative team structure.

If the company is willing to break up old structures and introduce new management methods, the support of an expert or coach is advisable to enable a successful change towards a future-oriented corporate structure and culture. After all, old patterns are like bad habits; it is very difficult to get rid of them. We as ARTS currently live in a hybrid model. We don't work entirely without managers, but self-organization and lateral leadership in individual projects are extremely important to us. Our managers can draw on the experience of all and empower every colleague to make their own decisions, put together flexible teams and drive innovative ideas forward. With the help of our own experience, we successfully support clients in the realization and implementation of future-oriented leadership methods.

Where the journey goes

In practice, a mixture of different management styles is often practiced in order to create an appropriate balance between hierarchy and creativity depending on the industry. This often results in unique business solutions that are both efficient and well structured. In general, companies today are increasingly developing into network organizations or even social entities with various formal levels. In order to be able to react to ever new, unpredictable situations, not only the managers but also, and increasingly, the acting employees are in demand. Which leadership approach is the right one for a company, whether leadership is needed at all or whether the expert takes on a leadership role depending on the situation, depends on numerous factors. Often a view from outside helps. According to the goals, the values and the wishes with regard to cooperation, it can be determined together which gap prevails. Afterwards, small adjustments offer room for optimization. Recommendations for the realization and implementation of new strategies also support the achievement of the goal.

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