Have you ever heard the term ‘Chinese Whisper’? It is a game in which the message that is said by one person is distorted completely by the time it reaches the receiver.
This is what happens in most organizations. Many organizations, by design or by fate, have so many layers that they have stopped using alphabets to represent each layer and moved onto a decimal system.
A highly layered organization creates unwanted bureaucracy and takes too much time to make a decision. And the less we talk about the managers the better. A highly layered organization also hides inefficiency amongst people and processes. It also creates an unwanted overhead cost and certainly duplicates a lot of work.
HBR says that ‘Executives have trouble resolving the tension between employee empowerment and operational discipline.’ And I believe that many organizations tend to move towards a rigid hierarchical structure with several layers to bring in operational discipline at the cost of employee empowerment.
Many organizations do not want it, but it is a consequence they pay for trying to strike a balance between smaller teams, regional structures, and large4 number of people. It is what they pay for achieving economies of scale.
Simple organizations cannot have so many layers. It defeats the purpose of being simple. Simple organizations do not have more than five layers. OK, I can go up to six, though I still feel that is one too many.
Small organizations like start-ups do not have this problem It is the mid-size and large-size organizations that face this problem.
But large and simple organizations like Google and Nike have been able to show that a delayered organization is possible. Google has a matrix like organization structure which reduces the number of layers yet creates the capacity to achieve growth and innovate on a faster rate. The matrix structure, which divides their people into function and product teams also lets their people bypass their managers if they feel the need for doing so. Nike also follows a similar structure.
While a delayered organization will certainly improve decision making and innovation, some risks do abound. Communication may be lost in such a scenario. Confusion can prevail if things are not managed well. And more importantly, a flatter organizational structure will create even lesser number of opportunities for people to grow.
But the benefits far outweigh the drawbacks. So, go on and reduce the layers in your organization. While doing so, make sure you take extra focus in bringing further clarity to the employees about their roles and address their apprehensions on a continuous basis.