As more companies embrace agile frameworks or adopt lean six sigma models of continuous improvement, they are finding that their traditional organizational structure clashes with these workplace processes. In some cases, teams are restructured to improve processes, while other companies are looking at flatter, less hierarchical plans.

Switching to a flat structure used to be popular with young, lean companies. However, many have given up this model or adapted it to a hybrid system. Let’s look at what it means to embrace flat management and whether it is right for your organization.

Smaller Companies Tend to Become Less Agile With Growth

While smaller, younger companies feel more comfortable with flatter organizational structures, strict hierarchies tend to form as companies grow. There’s a big difference between making sure a few people accomplish their tasks and managing departments of several dozen employees.

Simon Hayward, author of The Agile Leader: How to Create an Agile Business in the Digital Age, says small, flexible companies often set rules and limits during growth until their original management structure is unrecognizable. This makes growth more stable and manageable, but it also makes companies less flexible.

Soon, managers reach a point where they are only enforcing the rules, rather than guiding and executing a vision.

A less polite term for an over-hierarchical management that Prevue HR uses is the “fun sponge,” or someone who enforces company hierarchy over new ideas and opportunities for employees. While a hierarchy is important — it acts as a skeleton for the company and enhances the decision-making process — it can also stifle some employees.

“Opportunities can be lost in rigid hierarchies when employees are repressed from expressing their concerns and ideas,” they write. “The lack of power over situations can disrupt employee experiences as they feel undervalued and unimportant.”

Hayward encourages companies to challenge rules and processes in order to maintain agility. This can prevent them from relying too much on rule creation as their main problem-solving tool.

Employees Feel Heard in Flatter Companies

The danger of forming strict hierarchies that come with growth is that employees feel less heard when they need to ask questions and report all ideas through a set funnel.

A flat management structure better connects employees with their managers, says John Pierce, head of advisor recruiting at Stifel Financial. Management can see the problems affecting team members because they work side by side. Additionally, lower-level employees can share their ideas and plans for improvement with their managers.

This prevents the vacuum of hierarchical companies, where employees send their ideas or issues “up the chain” and hope that they get addressed.

“Whilst some level of management might be necessary for a business to actually make decisions, when workers don’t feel empowered, when managers are ineffective, or when senior staff take credit for other peoples’ work, employee morale suffers,” Sarah Finch, editor of D/sruption Magazine, writes. “The benefit of flat businesses therefore lies in valuing workers as individuals.”

A flat organizational structure isn’t an absence of management, but rather an opportunity for employees to show that they can work without their boss hovering over their shoulder.

In fact, many employees are prepared to lead themselves, given the chance, notes William Craig, cofounder of WebFX. “Trust that they have the integrity and the creative intelligence you hired them for in the first place.”

If your employees have the skills necessary to do their work, they can also tap into their soft skills to move a project forward without micromanagement. This is empowering and creates a sense of ownership in the project and in the company.

Where Flat Management Goes Wrong

While there are many significant benefits to decreasing your company hierarchy to increase agility, managing a flat company isn’t easy. Several companies have given up on flat management after creating new and unexpected problems they couldn’t overcome.

The Power Dynamics Never Really Change

One of the biggest issues with flat companies is that employees hold on to power. Richard Bartlett, cofounder of the collaborative decision-making tool Loomio, says many companies use the phrase “non-hierarchical” as a badge of honor, when in fact this lack of hierarchy addresses the wrong issue. He emphasizes how the problem with hierarchy lies in power dynamics, not the shape of the organizational structure.

When too much power is given to a small set of people, it creates an unbalanced dynamic. Many flat organizations are just as guilty of having power imbalances as those with traditional management structures, which lead to the same issues.

Flat Companies Form Their Own Hierarchies

Too often, companies try to establish an absence of power and offer a completely non-hierarchical experience. However, this just means that power dynamics will take place in an uncontrolled environment. Unspoken rules, for instance, can form.

Ideally in a flat hierarchy, the best person for any given problem steps up and solves it, explains Jason Evanish, CEO at management education site Get Lighthouse. However, many leaders have found that as their companies grow, a core group of people form who become the decision-makers and a secret hierarchy forms. This is even more toxic for team members who are told they work for a flat structure when, in fact, they don’t.

Managers Lack the Skills to Lead in a Flat Environment

Additionally, some companies devalue management to a point where managers feel lost or powerless in their new positions. They weren’t given the onboarding and training necessary to be effective. A company still be flat and have managers, but those managers need to know what is expected of them.

Bill Hunt, chief enterprise architect at SBA, points to his field of engineering as an example of why management is needed. “Good engineers do not automatically make good managers — working with computers and working with people require very different skillsets. A company wouldn’t expect a business manager to write code, so why should the reverse be encouraged?”

In a way, encouraging every employee to take on management tasks is really just increasing their emotional burdens while devaluing everything that leaders bring to their organizations.

5 Ways Companies Can Avoid Common Flat Management Mistakes

It is possible to embrace agility without forming a completely flat company. You can take on the basic principles of flat structures and avoid common mistakes to increase the chances of a smooth transition.

Create Channels for Open and Honest Feedback

Honesty and communication are the key pillars of a flat structure. Bas Kohnke, CEO of performance management platform Impraise, encourages companies to create an environment where feedback is constant and welcomed — even expected.

Leaders can create a system where peers and team members provide feedback so employees don’t always need to rely on management to know if they’re doing well. Plus, your team members might see more than you do and have better advice for improvement.

Raffaela Rein, founder of CareerFoundry, says her company’s experiment with a flat hierarchy lasted for a year before her team decided to change their management structure. She is honest about their failures and what went wrong: Employees were focused on creating a friendly team atmosphere to the point where feedback and negative conversations were avoided.

“Difficult conversations must be had in order for people to grow and develop,” Rein explains. “One of the major perceived benefits of the flat hierarchy is that employees manage themselves.However, in reality, no one felt they could speak up against another team member’s performance.”

Without open communication, more was said behind the backs of other employees than to their faces and behaviors went unaddressed longer than they should have to the detriment of the organization.

Establish Rules and Hierarchies Where Needed

You don’t need to work in anarchy to have a flat organization, but you should be cognizant of which structures are needed and those that aren’t.

Consultant Doug Belshaw, Ed.D. points to a few success stories of a few companies that worked to make their teams flatter. One is Mozilla, which operates using a “minimum viable bureaucracy,” or the most basic shell possible to encourage autonomy and maintain flexibility. There is still a hierarchy and a process in place, but it is made to be flexible and adjusted as necessary.

Build Our Autonomous Teams Slowly

As you embrace a flat hierarchy, test the new structures and learn from your mistakes. Then expand from there.

Corporate Rebels’ cofounder Joost Minnaar encourages companies to introduce a few autonomous teams in the company. These teams have more flexibility and so can determine their own way of working to achieve those goals. From there, the autonomous teams can train other departments in the company to become flatter — so that they become the rule, not the exception.

Give Employees Opportunities to Grow Their Skills

The goal through this process is to empower your employees and show how a flat structure benefits them.

“In a flat structure, a person with no experience but talent can thrive and drive the business forward,” writes Vlad Dobrynin, CEO at human interaction platform Humans.net. “Lack of experience is always mitigated by the desire to achieve.”

These inwardly-driven employees will learn the skills they need to solve problems. They will want to learn what their peers are doing and build their skills toolbox. This makes them more of an asset to the company they work for because these added skills can be applied throughout various teams, projects and tasks.

Indeed, hierarchy leads to specialization, says Eric Dontigney at Bizfluent. When team members know what their role is and how their work contributes to the company, they can specialize in what they do and learn more to provide more value.

However, this specialization is something companies are moving away from with the agile framework — instead favoring team members who jump in to solve tasks whenever they have the ability.

Show How Managers Can Also Benefit from a Flat Structure

Finally, build manager buy-in by empowering leaders to succeed with the flatter structure. Leaders also need to be ready to change if you want this non-hierarchical model to flourish, Andrea Davis, cofounder of FlashPoint Leadership Consulting, writes. They need strong teamwork skills and will need to lead by influence, not by force.

“He or she should also be skilled in driving innovation and continuous improvement by promoting risk tolerance, having strong business acumen and judgment, and managing increasing levels of complexity and ambiguity,” she adds.

As teams embrace more agile frameworks or move toward the continuous improvement ideas of lean six sigma, flat leaders will specialize in guiding teams and facilitating change in difficult times.

Change in any form is difficult for companies. People are afraid of losing power and employees often worry about the future of their jobs. However, with a strategic, planned change process, you can transition your company to a less hierarchical model that allows for more agility and empowered team members.

How Flat Management Empowers Employees and Improves Agility