In times of exponential change flatter organizations offer more agility
A quick skim through the annual report of any large global organization often reveals that the company earnestly aspires to have less bossy leaders. Talking up the empowerment of frontline staff is in vogue.
Flatter hierarchies are seen as a way for businesses to better cope with uncertainty. Research shows that the “frontline – middle manager – big boss” pyramid works well when life is stable. However, in times of exponential change flatter organizations offer more agility.
Not surprisingly, the Agile Methodology – a self-governing teamworking structure - is now being tried in around 70% of organizations. It’s believed, in more democratic organizations, middle managers are less likely to build empires and silos. As a result, there’ll be more collaboration, knowledge sharing and innovation.
In addition to the need to innovate, young people don’t seem to accept dominant bosses as easily as previous generations. Generation Zs lead the way. The proportion of 16-24 Americans who take the boss’s authority has significantly declined between 2016 and 2023, from 45% to 30%.
The Gap Between Empowering Rhetoric and Reality
In this context, it’s easy to see how platitudes about hearing the voice of staff have become a risk-free way to signal enlightened, attractive modernity. However, if you actually experience the culture within many organizations, you realize much of this talk of empowerment is hot air. Bosses still rule.
However, this gap between rhetoric and reality isn’t just social washing (when corporations wrongfully try to market themselves as socially conscious). Human psychology plays a critical role. We’ve evolved in hunter-gatherer tribes over millennia to feel more comfortable working in clear hierarchies. As the journalist Will Storr writes in his 2021 book The Status Game, we can’t help wanting: “…to seek connection and rank: to be accepted into groups and win status within them. This is the game of human life.”
We don’t just jealously defend our status, we also obsessively measure it against the progress of others, We look left and right at our competitors, like sprinters in a 100-meter race. This behavior was highlighted in a study on personal income. Surprisingly, it showed people don’t become any happier when their absolute income rises. Their sense of well-being only grows when their income relative to other people goes up. The writer Gore Vidal sums this up in his cynical quip: “It is not enough to succeed. Others must fail.”
It’s not surprising leaders like hierarchy. It offers alluring benefits: control, speed, and regular ego boosts. What’s less well understood is how it also benefits followers. A frontline worker gains much from a well-delineated hierarchy: guidance and direction, mentorship and learning, a defined role, and clear expectations. As well, of course, as the alluring possibility he or she might one day ascend the staircase of status to become the boss.
Take the London-based consulting firm that flattened the company's traditional hierarchy. Dani, an employee at the time, commented: “A real sense of chaos ensued…instead of creating a less competitive environment, it actually created a more competitive environment because people were desperate to prove their worth.” Many of Dani’s colleagues – especially younger employees who couldn’t see a clear path to seniority – quit.
Status games are also remarkably fluid. Researchers find, that even when there’s a lack of formal hierarchy, this leaves a vacuum for the emergence of informal pyramids. Humans don’t need titles to play status games, they creatively weave them into rungs of a ladder based on experience, talent, personality, or perceived impact. If we’ve learned anything from the echo chambers of our polarised social media, even the extremity and anger of an opinion can confer status in the right setting. This is why, despite billions of dollars invested in change programs to create flatter organizations, status-seeking is resilient. Like the carnival whack-a-mole game, if you smack it down in one place, it pops up somewhere else.
However, despite the challenges inherent in our human need for status, organizations should persevere in attempting to hear the voices of employees. The world is increasingly difficult to forecast and we need more agile organizations to succeed.
Changing the Leadership Mindset
Companies should start by addressing the mindset managers hold about what it means to be a leader. Confusion on how to empower can result in unhelpful mistakes. I’ve seen well-meaning leaders attempt to raise the status of those around them by lowering their own. The intention is noble. After all, nobody likes an arrogant big shot. However, this approach misses the point. Status is a constant because humans always create it. As such, it’s an infinite resource. With this in mind, a better approach for leaders is to consciously seek to dole out moments of prestige. Then they simultaneously raise their status and those around them.
When leaders understand this win-win mindset, we introduce them to many practical skills to offer status: asking questions, active listening, delegating authority, public acknowledgment of desired behaviors, sharing information, seeking feedback, and storytelling about the impact of others. These skills are relatively easy to pick up. It’s the mindset behind them that takes time and effort to shift. Becoming an empowering leader requires a level of self-awareness, empathy, humility, and wisdom not required by the middle management of previous generations.
This new status-offering leadership mindset is transformational when accompanied by culture change. The best approach is to avoid the trap of passing judgment on the human urge to seek status. It is, what it is. Instead, figure out how different types of status play can be channeled in your team organization. Here are a few healthy ways people should be able to earn status:
- By behaving in ways that support shared values and purpose
- By taking risks and occasionally failing, but with useful learning insights from the process
- By building networks that span the vertical silos in the business and connect the knowledge, people, and ideas
- By modeling a mindset that puts the objectives and purpose of the whole organization ahead of their objectives or silo
Humans always have, and always will play complex, dynamic, and evolving status games. Organizational leaders have two points of leverage. Firstly, change their mindset to figure out how to use their standing to offer prestige to others. Secondly, to change the rules of the status game itself. We don’t need to do away with the boss. We just need to help that person to become a more empowering leader.
