Flat will kill you, eventually: why every company needs structure

About a year ago at Flow, we had a big problem with how certain projects got done. Small projects were easy to handle: they’d come up, and then a small team would orbit around them, and get them done without much trouble. But whenever bigger, more complex projects would bubble up—projects that needed multiple opinions and specific requirements—progress would be unbelievably slow.

Sure, tasks would get doled out and properly assigned, but we’d miss deadlines, and requirements always seemed to be unclear. Even worse, nobody seemed particularly motivated to drive work home. And with nobody steering the ship, there was always a general sense of uncertainty about who should lead, and when. This resulted in things usually needing to float all the way to the top of the chain to get done.

Projects like this always seem to turn into an internal blame – or groan-a-thon. You’ll DM your co-workers complaining about… well, nothing. How it’s really annoying that this project isn’t done yet. About how you feel helpless and stifled. About how things aren’t working like they used to. But there’s a lot of other stuff to do, so instead of looking closer and figuring it out, you’ll focus on your work, be irritated, and then complain that evening over a few beers.

This vicious cycle at Flow was borne from a lack of structure, and a tendency towards being a flat organization—where anyone could chip in when they felt like it, but nobody ran the show. If we didn’t do something, this was going to rot us from the inside out.

New best thing ever, or novelty?

There’s an impulse among companies these days to differentiate themselves with new and daring practices at the organizational level. There’s unlimited vacations, the rise of remote work, or most recently and most astonishingly, raising your minimum salary to $70,000 per year.

Practices like this are usually an attempt at culture, not authentic structural or organizational change. It’s hugely important to know the difference.

If it’s the former, we’re throwing complex systems into our companies as nothing more than competitive hiring advantages: things that sound great, but aren’t installed at our companies professionally or correctly, or with any thought to whether or not that program will scale. This is scary, because as we all know, things only get harder to change as a company grows.

The flat organization, which was just starting to seep in at Flow, is perhaps the most beautiful and shiny of all your differentiators. Everyone hates managers, right? What is this—the 50’s? Well, let’s get rid of those. We’ll have a bunch of smart people orbiting around whatever needs to get done, and without middle managers, we’ll get rid of bottlenecks. Oh, and with the added responsibilities, people will make big mistakes and learn quickly. We’ll have a team of creative geniuses and everyone will feel like they own a piece of the product. Screw it. Let’s ditch structure. Let’s have fun.

Nice try, but there’s no such thing as no structure

While a structureless environment can succeed—people are indeed forced into a creative mindset in the absence of draconian middle management—the reality of human nature and the need for rules usually catches up with a flat organization. Chris Savage, whose company Wistia moved from a flat organization to one more traditionally structured, pointed out the following:

Early on, we were never super explicit about how we made decisions as a company, and that tended to work in our favor. It meant that everyone dabbled in every decision. Anyone could share their two cents on any project, and we were collectively on the lookout for opportunities to improve… This lack of clarity created an insane amount of chaos and allowed us to be more creative.

As your company gets bigger, responsibilities get chopped up into smaller pieces. The relationships between areas of ownership become exceedingly complex, which clouds the decision-making process. For us, it became hard to take risks—no one was clear on who was responsible for what. We moved more slowly, and it felt harder to learn and be creative.”

While a 10-person team with a flat structure might just mean trotting over to someone else’s desk to ask them for something or to check on the progress of a small piece, a larger company might require the involvement of multiple individuals working on multiple projects, and the sheer volume of projects means that opportunities for creativity get less consideration.

That’s all without mentioning that structure has a curious way of imposing itself within an organization. While the flat organization attempts to keep restrictions at a minimum in the interest of cultivating creativity, the same old structures tend to rear their ugly ogrish heads. Chris Savage again:

While people on the team made smaller decisions about their parts of the business, I ultimately acted as a bottleneck for major decisions. We began to realize that by building a company with a flat org structure, we had done the exact opposite of what we had intended. We had centralized all the decision-making, and we were relying on a secret implicit structure to make progress.”

Those bottlenecks you got rid of when you ditched middle managers? They’re replaced by an even narrower one at the top of the ladder. Remember what I told you about those Flow projects? Yup.

But instead of having this top-down system defined or at least acknowledged, an implied structure develops: one which is much harder to change, and infinitely more frustrating for the people working within it. Confused, directionless employees create a sort of ad-hoc system of self-management, which is catastrophically non-communal and ultimately results in some Lord of the Flies-level chaos.

Brian Robertson, co-founder of HolacracyOne, describes this madness:

We have leaders whose implicit expectations rule – we learn to figure them out and align with them first and foremost, and we look to these leaders to resolve other conflicts. As leaders, with others trying so hard to align with our expectations, we learn to temper ourselves and hold back, so we don’t accidentally create pressure or contribute to a disempowered culture. And across our peers we learn to engage in the process of building consensus or buy-in – a sometime-insidious political game to align expectations using personal relationships and force of character.”

Rather than communally working under an explicit system that we can choose to either like or dislike, we (leaders included) opt to work in chaos and individually figure out our own ways of getting things done. Law of the office-jungle. Yikes.

Holacracy: close, but not quite

Holacracy is an interesting antidote to the issue of implied structures: it aims to maintain the openness and creativity-fostering of a flat organization, while giving each role an explicit structure and authority. It gives organizations a good mix of central governance and autocracy, as you see in this image from Holacracy.org:

In a holacracy, employees get their managerial-ish decision-making authority, but within specific, defined boundaries. Holacracy.org also provides this helpful metaphor:

In football, you know to pass to the striker not because you’re friends with him, but because he’s in the best position to score. Even if you’re mad at the person playing the striker position, you’ll still pass the ball to that role because the strategy of the game suggests that you should. Similarly, in Holacracy, the roles are vested with authority, not the people.

In essence, holacracy makes a noble stand against the politics of our normal workplaces, and stops power-hungry sharks from stealing everyone else’s chow —something which can easily plague both conventional and flat organizations.

While an important step forward from the complete chaos of flat, there’s something critical that seems unacknowledged in the structure of holacracy: the vulnerability of working in the open. My personal experience in working in a company without C- or middle-level management (as Flow was in the beginning) was that it created a certain kind of idea paralysis. Every decision felt too paramount because there were too many eyes on every move, and not enough direct management about who should (or even how they should) make those moves. 

Sometimes, we just need a curtain

In Ethan Bernstein’s excellent Harvard Business Review piece, The Transparency Trap, he puts forth the idea that for the average worker, the ability to work in private can be just as important for productivity as openness and transparency; that a too-large working group or an excess of authority can leave people feeling exposed and vulnerable.

In his research, he describes the case of a mobile phone factory in China, one of the world’s largest of its kind. It was a factory of 14,000 workers, but a paragon of openness — a massive floor, without walls or dividers. Everyone was able to observe everyone else: it was a flat organization realized as a structure.

Interestingly, Bernstein observed that workers would often conceal better ways to work—from both their managers and their peers — because they felt it was “most efficient to hide it now and discuss it later. Everyone is happy: They see what they expect to see, and we meet our targets.”

Being part of a workplace with too few boundaries inhibited workers; the power to change everything for everyone was totally undesirable.

Bernstein asked the management to set up an experimental production line, and overheard an employee’s suggestion that their workstation is surrounded by a curtain. They tried it out, and to their amazement, productivity increased 15% around the curtained line. Here’s what Bernstein had to say:

By shielding employees from observation, the curtains supported local problem solving, experimentation, and focus. But within the curtains work became much more transparent. And over time the camaraderie within boundaries made the workers more likely to share—as a group—their privately worked-out solutions with other lines.”

The average worker at this factory was not interested in bringing forth changes too dramatic; but when it came to implementing ideas in their own enclosed team, enthusiasm jumped. Many of us, just like the workers in the factory, have anxiety about our ideas shaking things up just a little too much. We do better work in the womb-like confines of a small, trusted organization of a team, where we can observe and manipulate the change—ensuring that our idea will be properly understood.  

And sometimes we need yelling

Some of the best wisdom on running teams comes from kitchens, and recently, in Lucky Peach, chef Wylie Dufresne discussed his thoughts on running a great kitchen:

People don’t realize what they’re capable of; almost nobody realizes their potential. As coaches, we’re here to help you reach further than you thought you could—and sometimes, duress helps with that. It’s also part of life. People need boundaries; they need structure. Children need structure; grown-ups need structure. Do we need hitting or pot-throwing? No. Do we need yelling? Probably. Probably we do, at times.”

I agree with Wylie wholeheartedly—and I think he nails the only fundamental rules we need to follow when we’re trying to impose some very necessary structure on our team.

First off, everyone needs structure. Just acknowledge that. It’s a basic requirement of any good, comfortable work; very few of us are such consummate artists that we can draw genius from the most bare of requirements. Structure is what lets us focus on our work, rather than navigating the best way to accomplish even the easiest tasks. The path from beginning to end needs to be well-tread and obvious. Your team should not battle a non-existent system.

And sometimes, we need yelling — or more accurately, we need someone pushing us from behind into actually getting our work done. Someone who gives a shit about our careers and our sanity and our company, all at once. We need someone in charge. If we don’t have it, things stagnate, and work doesn’t feel that important. You can’t have 15, 20, or 25 people working in their own silos, emerging only when they feel like chipping in.

Meet in the middle?

While the aggressively structureless and lawless world of flat organizations provides neither structure nor yelling, and the holacracy seems to provide too much responsibility and expectation for the average worker, it seems that Wylie’s happy medium must lie somewhere between the two: an ideal balance of structure and hierarchy of people.

Is the answer simple conventional management, which brings in distinct departments and managers who prevent you from having bottlenecks? It’s entirely possible, and extremely possible that such a simple system isn’t as outmoded as it might sound (P.S., that’s how we solved our stagnating problem at Flow).

What’s important, though, is that we look beyond neon-sign benefits of things like flat organization (“We don’t have bosses here!”) and look at how this system will impact the work we’re doing, and how it’ll influence the unique people who make up our team—how it will give people the structure they crave.

Sometimes, we just need to find the easy answers. Maybe your team’s solution isn’t radical organizational change; maybe it’s just putting up a curtain to give your team some space, or giving your team a few managers to help get rid of their bottlenecks. Maybe we don’t need to do the sexy thing. Maybe that sexy thing is what kills you.

What’s your take on having a flat organizational structure? What structure has worked best for your team?

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About the featured photo:

Fabio Napoleoni’s “Welcome to the Unknown” is our feature painting this week. Many events influenced Fabio’s artwork but none more than the traumatic events that followed the birth of his second child. His daughter, born with major heart abnormalities, had to face several surgeries to correct issues that could prevent her from having a future. Through this experience, Fabio realized what was missing from his work: emotion.