Breaking the Chain: The Benefits of Flat Leadership

Heather Baldry doesn’t have a formal job title. The veteran employee at GitHub, a collaboration software company based in San Francisco, said none of its 162 employees do.

“I get called ‘HR’ regularly, just because it’s a descriptive way for people outside of the company to understand some of the things that I do,” she said.

The no-job-titles approach is part of GitHub’s flat organizational structure, where aside from a small group that handles administrative and other broad companywide issues, there is no formal hierarchy. Instead, the company is composed of teams that prioritize different projects. Employees are free to join different teams, which is often based on interests and needs.

This horizontal approach to leadership and organizational structure has gained traction recently. With attitudes shifting in how work is done, even traditional top-down companies are making efforts to be more like startups.

In March, The Wall Street Journal reported that a number of large companies, including PepsiCo and Mondelez International Inc., a spinoff of Kraft Foods, have sent groups of employees to work at small media and technology startups to learn how smaller companies are successful.

A commonality among many such startups is a penchant for flat leadership — the idea that companies and teams can produce more effectively without traditional hierarchies — where ideas are invited to flow collectively instead of a more command and control style.

Some who operate in this style may begin with a clear and purposeful vision embracing the benefits of horizontal leadership. Others, busy getting a business off the ground, never get around to addressing how leadership will be structured.

Traditional companies are going to embrace some components of horizontal leadership sooner or later, said Mara Swan, executive vice president of global strategy and talent at ManpowerGroup, a human resources consultancy. She said the speed of the current business environment simply demands it (See sidebar).

Baldry said the no-bosses model has been in place at GitHub since the company was founded in 2008. Its flat leadership structure stems from its founders’ vision — a vision shaped by openness and transparency, characteristics typically embraced by the software development community.

“A lot of people in the company think of it as this grand experiment,” Baldry said. “From day one, when there was just the company’s founders, they said this was never going to work. At 25 people — which is when I came on — they said, nope, this isn’t going to work. Well, we’re at 160 people and it’s still working, and people are very excited about it. But it is a big experiment.”

Promoting Employee Ownership
While some horizontal models may appear too extreme for larger companies, some characteristics are transferable. The first is employee ownership or empowerment, said Allan Cohen, a professor of leadership at Babson College in Wellesley, Mass., and author of “Power Up: Transforming Organizations Through Shared Leadership and Managing for Excellence.”

Flatter organizations tend to impart more ownership to employees, Cohen said. Giving team members the ability to take ownership on a project with a certain level of autonomy provides more meaning to the work. It also aligns employees more closely with the organization’s purpose and mission.

Giving employees the autonomy to make decisions without superior approval can be advantageous in today’s fast-paced business environment. For instance, Cohen said instead of waiting for the chain of command to approve a decision, employees in flat organizations are often encouraged to make their own decisions, responding to business needs faster.

“The idea is to keep [formal hierarchy] at a minimum,” Cohen said, “to create an atmosphere where nobody feels prevented from saying what they need to say, where information flows freely to where it’s needed, where people cross job boundaries with no problem.”

The result is often greater creativity and innovation. Jay Friedlander, a professor of leadership and green and socially responsible business at College of the Atlantic in Bar Harbor, Maine, said leaders will get ideas from everywhere. “If you are telling people this is what you have to do, I don’t want any variation on this, I don’t care what you have to say, you’re going to automatically stifle creativity.”

Wistia, a 17-employee video marketing production company in Somerville, Mass., embraces this style. Chris Savage, the company’s co-founder and chief executive, said even new employees are encouraged to take ownership in a segment of the company or project where more initiative is needed, to make it their own.

Savage said the difference between taking ownership on a project in a flat organization and having responsibility for a task at a more top-down company is context. At Wistia, employees are not necessarily told what they should do; they are influenced by discussions and a constant flow of ideas and communication, much of which is facilitated through technology such as social media and HR collaboration software.

A Wistia employee, for instance, may decide to take ownership of the company’s video scripting process, Savage said. He or she would take a leadership role in the process, but the leadership role is project based and not a static managerial position.

At the same time, Savage said it is up to that employee to be proactive in getting feedback from other employees to ensure the process is aligned with other parts of the business.

Savage said that because most work decisions related to the creative process don’t have to be run up a chain of command, the company is better equipped to take risks — an important element not just for small companies but for larger ones as well.

He said accountability is also more organic in this situation, because the employee takes more personal pride in his or her performance managing that process.

More Mindset Than Hierarchy
Even proponents of horizontal leadership admit there are some shortcomings to the approach.

Babson College’s Cohen said the larger a company gets, the less sustainable wholly flat leadership becomes. He also said there are certain kinds of tough business decisions that do not work well in a horizontal structure, such as a company’s finances.

There also may be times when an organization intends to operate so flat on a decision that it gets stuck, said the College of the Atlantic’s Friedlander. Sometimes, there has to be some authority guiding a process or influencing the rest of the organization in a certain direction.

Another potential barrier is trust, said Dale Hamby, associate vice president for university centers at Harrisburg University of Science and Technology in Pennsylvania. Organizations that strive to operate within a flat structure must have a tremendous amount of trust for other team members, said Hamby, who teaches a course on leadership, organizational theory and economics.

Still, to Dan Pontefract, the senior director of learning and collaboration at telecommunications company Telus, flat leadership is more of a mindset than a strict hierarchical structure. Therefore, even the largest, most top-down companies should be able to embody a culture of flat leadership.

This is the main argument Pontefract makes in his book, “Flat Army: Creating a Connected and Engaged Organization.” “We tend to sort of look at history as command and control from war,” he said, referring to the leadership history he laid out in the book. “We tend to look at monarchies and how they ruthlessly led; we look at the industrial revolution and the factorization of workers; and we look at the single-room schoolhouse and the sage-on-the-stage model, and you kind of add that up and that how we learned to be leaders.”

This one-way approach to leadership is a flawed model, Pontefract said. It is also a large reason why employers tend to struggle with employee engagement — motivating employees so they are more willing to exert a high level of discretionary effort at work.

Instead, Pontefract said organizations should aim to create an “unobstructed flow of corporate commonality.” This means leaders should be more receptive to others’ ideas, collaborative, connected and participative. He said the concept behind “Flat Army” is “let’s get stuff done, but let’s do it with some common purpose,” rather than the more authoritative leadership model.

Making It Work
No large public company should be expected to eliminate its hierarchy entirely. On a business-unit or project-team level, however, some organizations have demonstrated the benefits of flat leadership — even in areas of the business typically perceived as naturally top-down.

General Electric Co., for instance, is in the process of implementing a more self-directed work structure at its aviation unit manufacturing plant in Lynn, Mass. The plant is one of many in GE Aviation’s supply chain that develops, manufactures, assembles, tests and repairs jet engines for the company’s commercial and military aircraft.

Denice Biocca, global human resources manager of supply chain at GE Aviation, said many of the other plants in the unit have been operating with a self-directed, or teaming, structure for years. But the plant in Lynn, at more than a century old, had developed an “entrenched work culture,” according to a Harvard Business School case study on the plant’s leadership shift. This culture resulted in lower productivity compared to other plants. Biocca said the Lynn plant is the last plant to make the operational transformation.

Meanwhile, the model the company has instilled in other plants reflects similar principles as those at companies such as Wistia and GitHub.

Instead of having a manufacturing project manager calling all the shots, Biocca said the structure gives more frontline workers a say in the daily flow of operations. This is done through a committee process where different teams are established for different areas of the manufacturing process — safety, policies and material flow. Biocca said these teams work together to come up with ideas to improve the manufacturing process.

Further, Biocca said instead of having a production manager guiding and ordering the day-to-day flow of the manufacturing process, a team takes over. Within that guiding team is a role called “coach.”

Unlike a production manager barking orders at the assembly team, Biocca said the coach is there to guide the teams and facilitate communication throughout the process. “That coach is really there to do less day-to-day direction and do more helping the teams to work on process improvement,” Biocca said.

According to the Harvard Business School case study, cycle time at GE’s Durham, N.C., plant — where the flat leadership model had been in place for some time — was nearly half that of the Lynn plant in 2011, before that plant’s culture shift in leadership began.

Anecdotally, the adjustment in leadership style has boosted employee engagement and motivation, Biocca said. Instead of plant workers going home physically tired from the day’s work, she said workers tell her they feel more of a mental drain. Biocca said one worker’s comments to her stood out:

“I ask him: ‘So what’s really different for you as a person?’ And he said: ‘You know, I used to go home and, because this operation is so grueling, my back hurt, my arms hurt, my shoulders hurt. Now I go home and, quite honestly, my head hurts, because I’m constantly thinking, I’m waking up in the middle of the night with these ideas, and I feel so much more valued. I don’t feel like a cog in the wheel of the operation. I feel like a valued member of this operation.’”

Embracing the Matrix

There’s the top-down organizational structure, the horizontal or flat structure, and then there is the “matrixed” structure, which is a combination of the two.

Tamar Elkeles, vice president of learning and development at technology firm Qualcomm Inc., said in a matrix organization employees have a direct manager they report to, and that manager determines merit and other performance-based measures. Employees also have individual project managers — people who manage employees’ performance and work on individual projects.

An employee can have one direct reporting manager and multiple so-called project managers, Elkeles said. This is the kind of management structure at work at Qualcomm. Elkeles said the matrix approach is a good balance for larger organizations wanting to promote some characteristics of horizontal leadership while maintaining some sense of a traditional top-down reporting structure.

— Frank Kalman

Preparing for Flatness

Organizations hoping to hold onto a rigid, top-down style of leadership may shift mindsets anyway.

For millennials, the common components to horizontal, or flat, leadership — transparency, collaboration, a penchant to break through hierarchy — make up the only way they know how to work, according to Mara Swan, executive vice president of global strategy and talent at human resources consultancy ManpowerGroup.

With Gen Y projected by many estimates to represent nearly half of the U.S. workforce by 2020, the shift in organizational mindset might be inevitable.

The reason horizontal leadership styles have gained traction in recent years has less to do with companies wanting to embrace the startup mentality, Swan said. Macroeconomic forces require companies to move faster, shift business models more often and keep the exchange of ideas flowing. As a result, sending every idea exchange through the organizational chain of command can be an unrealistic expectation, she said.

Further, millennials have never really lived in an era where that sort of structure was embraced. They often worry about getting the job done regardless of sensitivity to hierarchy. For them, collaborative decision-making and organizational inclusiveness come naturally.

— Frank Kalman