Vertical management can stifle employees, but horizontal management boosts morale.
Employees are the lifeblood of any organization. They keep the company on course. Most CEOs don’t pay a lot of attention to what is going on below decks; they are busy plotting courses and steering the ship. There are levels of management tasked with managing those below.
This vertical management structure is commonplace. But do CEOs realize the cost for business? Many employees working in this structure are unhappy in their role, while business processes judder along rather than being fast and streamlined.
Why is this?
Narrow and tedious
The role of staff in a vertical hierarchy means they tend to work in narrow and tedious roles. They understand there is very little chance of climbing a career ladder, rather opportunities only arise when somebody leaves or gets fired. They feel like the archetypical small cog in the big machine. Their ambition is squashed; they go through the motions and end up playing the game for their paycheck. They don’t get recognition and on a scale of 1-10 their motivation is often below five.
CEOs and boardroom executives have little idea how this can stifle growth.
There are many layers between them and the real business. Executive level members are typically overloaded with meetings and "important" issues, but barely understand what a client or average staff member is going through.
Stifled and suffocated
Why should CEOs, presidents and vice presidents be concerned about this? If they look a little closer they’ll understand success comes from the ambitions of well-placed people in the organization. It doesn’t come from corporate straitjackets and rigid ways of working. Look at any organization and you’ll discover that often new business-growing initiatives are driven by the entrepreneurial spirit; by people who find ways to break free of constraints.
Of course, human resources will say the larger the organization, the greater the need for discipline and corporate rules. This is true to a certain extent, but the fire and ambition of employees needs to be fueled rather than dampened.
Have you ever seen startups with vertical hierarchy? No, because realizing the ambitions of people is the main goal of such companies. Of course there is the product or the service, but within this flat structure there is tremendous scope for employees to thrive and push the business forward, unhampered by restrictive rules that pigeon hole people.
Individual freedom leads to growth
People cherishing freedom and the opportunity for personal growth feel the most comfortable in horizontal management structures. If their financial stability depends on the outcome of their work, they simply become more driven. They pursue success, grow as individuals and make the business grow thanks to their ambition and endeavors.
In a flat structure, a person with no experience but talent can thrive and drive the business forward. Lack of experience is always mitigated by the desire to achieve.
In a flat structure, people do what inspires them within the context of the business. They practically work for themselves. They come to the office happy because they do what they love.
Compelling benefits for the business
Of course, these employees must be managed. Using a hands-off approach that allows them freedom, yet ensures they understand business objectives works for the following reasons:
Companies with a flat structure have a management team with different goals.
Within this structure, the best candidates for leadership positions are those who think outside the box.
Employees strive to pursue their ambitions and the more people there are like this, the faster the company grows.
Employees in leadership positions don’t need to be forced into a corporate box; in fact, these people shouldn’t be managed at all.
The only thing a leader has to do in a horizontal system is build an environment that motivates employees. There are three key areas that need to be developed:
Cultural: People must understand the objectives of the company, be proud of its values and relate to its culture.
Physical: People need freedom; they need different offices, communication tools of their choice and events that reflect their objectives within the company.
Communication: The more independent and unique the person is, the more problems they will have with the general goals of a company. Conflict minimization and creating the right atmosphere for communication are the main tasks of a leader and manager. This point is most important.
All of this may seem like a step too far for companies that have a long-standing tradition of vertical management. But even small changes can have dramatic effects.
Take this example. A company's management team got rid of all the coffee machines on different floors and established one "coffee point" for the entire office on the ground floor. After a short period of time, the atmosphere in the company completely changed; the number of horizontal bonds increased, and conflict between departments was brought to an end. People who rarely spoke got to know each other; they simply talked and discovered affinities with co-workers. The atmosphere was more harmonious, cooperation increased and the business thrived.
A flat company doesn’t need developmental limits. Managers don’t need to employ more staff. They simply outsource some tasks. Managers don’t need to create a vertical line underneath them. They have the minds of entrepreneurs; they hire resources, not employees. They strive to realize their ambitions and don’t seek control of people. They can deal with any process, regardless of the business area. They gain valuable skills and feel happy and fulfilled. As a result, the business grows and prospers.